Indian Consumer Durable Industry Analysis

                                Indian Consumer Durable Industry Analysis

India is expected to become the fifth largest consumer durables market in the world by 2025. The consumer electronics market is expected to increase to US$ 400 billion by 2020. The production is expected to reach US$ 104 billion by 2016.

The sector is expected to double at 14.7 per cent compound annual growth rate (CAGR) to US$ 12.5 billion in FY15 from US$ 6.3 billion in FY10. Urban markets account for the major share (65 per cent) of total revenues in the consumer durables sector in the country. Demand in urban markets is expected to increase for non-essential 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 as the government plans to invest significantly in rural electrification.

The Government of India has increased liberalisation which has favoured foreign direct investments (FDI). Also, policies such as National Electronics Mission and digitisation of television and setting up of Electronic Hardware Technology Parks (EHTPs) is expected to boost the growth of this sector.

The consumer durables market is anticipated to expand at a CAGR of 14.8 per cent to US$ 12.5 billion in FY15. Also, the demand from rural and semi-urban areas is projected to expand at a CAGR of 25 per cent to US$ 6.4 billion in FY15, with rural and semi-urban markets likely contributing majorly to consumer durables sales.

With buyers loosening their purse strings amid rising income levels, the consumer durables industry appears to have cashed on the opportunity in 2014 despite tough overall economic conditions and expects even better times ahead in the new year.

The industry, which had suffered due to a slump in the economy and remained flat in the past two years, started looking up this year and even high-end products like ultra high definition TV, refrigerators and air-conditioners with newer technologies found traction in the market.