November 28, 2012
Growth in consumer durables is likely to accelerate as disposable incomes and adoption of plastic credit rises. Additionally, increasing electrification of rural areas would augment demand. This Sector attracted significant investments even during global recession. Rural markets is expected to grow at a compound annual growth rate (CAGR) of 25 per cent from US$ 2.1 billion in FY10 to US$ 6.4 billion in FY15.
100 per cent FDI allowed in the electronics hardware-manufacturing sector under the automatic route. The consumer durables market recorded revenues of US$ 7.3 billion in FY11. During FY03-FY11, the industry expanded at a CAGR of 12.2 per cent.
Urban markets account for the major share (65 per cent) of total revenues in the consumer durables sector in India. Demand in urban markets is likely to increase for nonessential products such as LED TVs, laptops, split ACs and, beauty and wellness products. In rural markets, durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years.
Industry analysts expects the sector to post a CAGR of 15.0 per cent over 2010-15. Growth in demand from rural and semi-urban market to outpace demand from urban market for consumer goods.
Consumer durables market expected to expand at a CAGR of 14.8 per cent to US$ 12.5 billion in FY15 (from US$ 7.3 billion in FY11). Rural and semi-urban markets are likely to contribute a majority of consumer durables sales.
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