Indian Consumer Market

India’s consumer durables industry's market size is expected to reach US$ 34 billion by 2025.

Advantage India

Growing
Demand

* India’s smart TV market grew by 74% YoY in the second quarter of 2022, with Xiaomi being the leader with a 13% market share, followed by Samsung at 12%.

* The dishwasher market in India is expected to surpass US$ 90 million by 2025-26, driven by rising demand from metro cities such as Mumbai, Hyderabad, Delhi and Bangalore.

Opportunities

* Tech players are focusing on tapping the Indian consumer electronics market by developing an electronic components manufacturing base in India and encouraging exports.

* Consumer electronic brands are focusing on expansion in the Indian smart wearables market.

Policy
Support

* 100% FDI allowed in the electronics hardware-manufacturing.

* In July 2021, the government approved 14 companies under the production linked incentive (PLI) scheme for IT hardware. Over the next four years, these companies are expected to fuel total production of US$ 21.64 billion.

Increasing
Investments

* In FY23, Godrej Appliances announced plans to invest Rs. 200 crore (US$ 25.11 million) in the capacity expansion of its premium range.

* Between April 2000-June 2022, electronic goods attracted FDI inflows of US$ 3.68 billion.

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Last updated: Dec, 2022

Consumer Durables Industry Report

Nov, 2022

Introduction

The Indian consumer durables market is broadly segregated into urban and rural markets and is attracting marketers from across the world. The sector comprises of a huge middle class, relatively large affluent class and a small economically disadvantaged class. The sector includes consumer electricals such as fans, kitchen and cooking appliances, lighting devices, as well as white goods such as washing machines, televisions, refrigerators, and air conditioners.

Market share in the consumer durables industry is moving from the unorganised to the organised sector. According to estimates, 30% of the total market is still unorganised, which provides listed Indian players with a significant opportunity to further increase their market share going forward. Artificial intelligence and manufacturing automation will be important future trends as consumer awareness increases regarding technology advancements and their applications across multiple sectors. In order to increase production efficiency of various consumer durables, Industry 4.0 will stimulate investments in R&D, technology infrastructure, and manufacturing processes.

Global corporations view India as one of the key markets from where future growth is likely to emerge. The growth in India’s consumer market would be primarily driven by a favorable population composition and increasing disposable income.

Market Size

Indian appliances and consumer electronics industry stood at US$ 9.84 billion in 2021, and is expected to more than double to reach Rs. 1.48 lakh crore (US$ 21.18 billion) by 2025. Electronics hardware production in the country stood at US$ 63.39 billion in 2021.

In FY21, the television production in India stood at US$ 4.24 billion. The total active DTH subscriber base stood at 67.04 million in June 2022.

As of 2021, the refrigerator, washing machines and air conditioner market in India were estimated at around US$ 3.82 billion, US$ 8.43 billion and US$ 3.84 billion, respectively. The market size of air conditioners is expected to grow to 165 lakh units by 2025 from 65 lakh units in 2019, while refrigerators’ market size is expected to grow to 275 lakh units by 2025 from 145 lakh units in 2019.

India’s smartphone shipments witnessed YoY growth of 11% in 2021, with 169 million units shipped. India’s smartphone market revenue crossed US$ 38 billion in 2021 with a 27% YoY growth, with the leader being Xiaomi with a 24% shipment share.

Investments

According to Department for Promotion of Industry and Internal Trade, between April 2020-March 2021 (FY21), exports of electronic goods from India stood at US$ 11.1 billion. In May 2022, US$ 1.34 billion worth of electronic goods were exported.

Between April 2000-June 2022, electronic goods attracted FDI inflows of US$ 3.68 billion.

Following are some recent investments and developments in the Indian consumer durables sector.

India’s wearable market registered another record quarter, shipping 37.2 million units in the third quarter (July-September) of 2022, a growth of 56.4% YoY.
According to a report from Counterpoint's Make in India service, shipments of "Made-in-India" smartphones increased 16% YoY in the second quarter of 2022 to reach over 44 million units.
In September 2022, monthly mobile phone exports from India crossed the US$ 1 billion mark for the first time ever.
According to a report by Counterpoint Research, India’s smart TV market grew by 74% YoY in the second quarter of 2022. Xiaomi stood as the leader with a 13% market share, followed by Samsung at 12%.
As per TAM's latest AdEx report, television advertising for the durables sector has grown 2.5 times during January-May 2022, as compared to the same period in 2021. The sector grew 23% YoY in January-May 2022.
Electrical appliances maker V-Guard Industries has announced plans to invest in new manufacturing plants. Over the next 12 months, the company will open four additional factories: two in Hyderabad, one in Vapi, and one in Uttarakhand.
In FY23, Godrej Appliances announced plans to invest Rs. 200 crore (US$ 25.11 million) in the capacity expansion of its premium range.
In November 2021, Tata Consumer Products (TCPL) signed definitive agreements to acquire 100% equity shares of Tata SmartFoodz Limited (TSFL) from Tata Industries Limited, for a cash consideration of Rs. 395 crore (US$ 53.13 million). This move was in line with TCPL’s strategic intent to expand into value-added categories.
In September 2021, Blue Star Climatech, the wholly owned subsidiary of Blue Star, announced its plans to invest Rs. 550 crore (US$ 73.45 million) over the next few years to set up a new manufacturing facility at Sri City in Andhra Pradesh’s Chittoor district.
In September 2021, US-based consumer electronics brand Westinghouse Electric Corporation, forayed into the Indian market by launching a range of TV sets. The brand collaborated with its Indian licensing partner Super Plastronics Pvt Ltd (SPPL) and signed an exclusive licensing agreement with it.
In September 2021, Airtel Digital TV, the DTH arm of Bharti Airtel, introduced Made-in-India high-definition set-top boxes for customers. The boxes are being manufactured in Noida, Uttar Pradesh, by Skyworth Electronics. Airtel plans to fully transition to Made-in-India set-top boxes, including the high-end Airtel Xstream 4K Android TV box, by the end of 2021 and contribute towards local manufacturing and the Government of India’s Atmanirbhar vision.
In August 2021, Lenovo announced that it is considerably expanding its local manufacturing capabilities in India across product categories such as PCs, laptops and smartphones, to satisfy rising consumer demand.
In August 2021, Philips announced an investment of Rs. 300 crore (US$ 40.41 million), and plans to recruit 1,500 employees in India. The company announced plans to expand its Pune operations to increase manufacturing in India.
In July 2021, Godrej & Boyce announced their entry into the dishwasher market and the aim to capture 15% market share by FY22. The company is focusing on key markets such as Mumbai, Hyderabad, Bengaluru and Delhi, and plans to expand to tier-II cities.

Government Initiatives

The Ministry of Consumer Affairs has asked top consumer durables companies (such as LG, Samsung, Havells, etc.) to share data in order to create a common repository of information on their service centres and repair policy in an effort to protect customers' rights to repair and maintain home appliances.
In November 2021, 42 companies were selected under the PLI Scheme for White Goods with a committed investment of Rs. 4,614 crore (US$ 580.6 million), which is expected to create additional direct employment for 44,000 people.
- In April 2022, 19 companies filed applications for the PLI Scheme for White Goods in the 2nd round of applications, with committed investments of Rs. 1,548 crore (US$ 194.79 million).
- As part of the PLI scheme, 61 companies have established component manufacturing facilities in 111 locations throughout 14 states and UTs, creating jobs across India.
In November 2021, Flipkart signed an MoU with the Ministry of Rural Development of the Government of India (MoRD), for their ambitious Deendayal Antyodaya Yojana – National Rural Livelihood Mission (DAY-NRLM) programme, to empower local businesses and self-help groups (SHGs) by bringing them into the e-commerce fold.
In July 2021, the government approved 14 companies under the production linked incentive (PLI) scheme for IT hardware. Over the next four years, these companies are expected to fuel total production of >US$ 21.64 billion.
In June 2021, the government extended the production-linked incentive (PLI) scheme for large scale electronics manufacturing by a year (until FY26), giving a boost to the industry.
The Indian government has been encouraging consumer durable brands in India to ‘Make in India’, thereby expecting they should be self-reliant for the future; consumer too are showing an affinity towards homegrown products.
The National Policy on Electronics 2019 is targeting production of one billion mobile handsets valued at US$ 190 billion by 2025, out of which 600 million handsets valued at US$ 100 billion are likely to be exported.
The Government of India has allowed 100% FDI under the automatic route in electronics systems design and manufacturing sector. FDI into single brand retail has been increased from 51% to 100%; the government is planning to hike FDI limit in multi-brand retail to 51%.

Road Ahead

According to a number of consumer durable businesses, rural India presents the next significant growth potential for the industry, driven by increased penetration. The government's effort to electrify rural areas has improved power supply during the past few years in tier 3/4 towns and villages, paving the way for the use of electrical products.

According to FICCI, India’s TV production is expected to reach US$ 10.22 billion by FY26 at a CAGR of 20%. The headset market revenue in India is projected to reach US$ 77 million by 2027 at a CAGR of 4.7%, driven by rising adoption of wireless headsets among consumers. The dishwasher market in India is expected to surpass US$ 90 million by 2025-26, driven by rising demand from metro cities such as Mumbai, Hyderabad, Delhi and Bangalore. According to India Cellular & Electronics Association (ICEA), India has the potential to achieve a value of US$ 100 billion in manufacturing of laptops and tablets by 2025. The Indian mobile phone market is predicted to generate Rs. 2.4 trillion (US$ 29.38 billion) in revenue by FY26.

The Indian appliance and consumer electronics (ACE) market is expected to increase at 9% CAGR to reach Rs. 3.15 trillion (US$ 48.37 billion) in 2022. Demand growth is likely to accelerate with rising disposable income, easy access to credit, and wide usability of online sales.

References: Media Reports, Press Releases, Press Information Bureau (PIB), Boston Consulting Group, International Data Corporation