Indian Consumer Durables Industry Analysis

Indian appliance and consumer electronics (ACE) market reached Rs 2.05 trillion (US$ 31.48 billion) in 2017. It is expected to increase at a 9 per cent CAGR to reach Rs 3.15 trillion (US$ 48.37 billion) in 2022. Electronics hardware production in the country reached Rs 3.88 trillion (US$ 60.13 billion) in FY18, growing at a CAGR of 26.7 per cent between FY14-18. Demand for electronics hardware in India is expected to reach US$ 400 billion by FY24.

There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of brands increases. Overall consumer durable exports reached US$ 0.78 billion in 2017. Consumer electronics exports from India reached US$ 362.12 million in FY18 and US$ 267.15 million between Apr-Nov 2018. Also demand for durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years in the rural markets as the government plans to invest significantly in rural electrification. The S&P BSE Consumer Durables Index has grown at 16 per cent CAGR between 2010-18. The consumer durables sector in India is expected to grow 8.5 per cent in 2018-19. Consumer durables index under the Index of Industrial Production (IIP) has grown 5.0 per cent year-on-year between Apr-Nov 2018.

White goods industry in India is highly concentrated. In washing machines and refrigerators, top five players have more than 75 per cent market share, while in air conditioners and fans it is around 55-60 per cent. On the other hand, kitchen appliances segment is fragmented with top five players having 30-35 per cent market share.

Under Budget 2018-19, the government retained its focus on rural economy by continuing the pro-poor and pro-farmer schemes.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the consumer market. The Government of India's policies and regulatory frameworks such as relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers for the consumer market.