Overview
● In the Indian market, the home appliance segment is one of the swiftest growing industries. The emerging economy and developing lifestyles of Indian consumers have increased demand for convenient appliances. This sector has a vast market ranging from air conditioners, washing machines, refrigerators, etc. Both large and small appliances have increased at a steady pace over time and are estimated to rise with the growing Indian population. Indian appliance and consumer electronics (ACE) market touched Rs 76,400 crore (US$ 10.93 billion) in 2019. The appliances and consumer electronics industry is assumed to double to Rs 1.48 lakh crore (US$ 21.18 billion) by 2025.
Source: Grandviewresearch
● With the increase in the supply of electricity in rural areas and awareness for brands, the demand for home appliances is also expected to increase. Demand for appliances like refrigerators and consumer electronic goods are expected to witness increased demand, especially in rural areas as the Government intends to invest significantly in rural electrification. Two-third of the total revenue is produced from the urban inhabitants, and the rest is made from the rural inhabitants.
● In the fiscal year 2019, electronics hardware production in the country increased from Rs 1.90 trillion (US$ 31.13 billion) in 2014 to Rs 4.58 trillion (US$ 65.53 billion). By 2024, the demand for electronics hardware in India is anticipated to reach US$ 400 billion. The National Policy (DNP) plans to produce one billion mobile handsets by 2025.
● In the washing machines and refrigerator segment, the top five companies have more than 75% of the market share, while in the air conditioners and fans segment, it is nearly 55-60%. However, the kitchen appliances segment is fragmented with the top five companies having a 30-35% market share. The air conditioner has an entrance of 4% in India as compared to the global average of 30%. As per the Department for Promotion of Industry and Internal Trade (DPIIT), between April 2000-March 2020, FDI inflow in the electronics sector stood at US$ 2.79 billion.
Air conditioner
● In the fiscal year 2020, the electronics, domestic appliances, and air conditioner market in India were expected to be approximately Rs 5,976 crore (US$ 0.86 billion), Rs 17,873 crore (US$ 1.80 billion), and Rs 12,568 crore (US$ 2.56 billion), respectively. As per a report of 6Wreaserch, India Room Air Conditioner Market is predicted to grow at a CAGR of 14.2% from 2020 to 26.
Source: Grandviewresearch
● The strengthening of the residential sector with the growing purchasing power of the consumer, rising hospitality sectors, and encouraging construction activities have led to the steady growth of the Indian room air conditioner market. Further, the increase of development projects to metro & tier-2 cities along with increasing government initiative towards public infrastructures would enhance the demand for room air conditioners in India. With the presence of domestic, international, and other market participants, India’s room air conditioner market has become extremely competitive.
● However, due to the covid-19 outbreak, there has been a loss in this sector. The closure of commercial places and offices with air conditioners have not been able to generate profit. In fact, the manufacturers have also been severely impacted due to the availability of high inventory and no sales.
Source: Livemint
● Motilal Oswal Research predicts a 20% decline in AC industry sales in 2020, due to sales hit during the June quarter. The decline in sales has impacted the entire supply chain including retailers, distributors, brands, and suppliers. The research analysis implies secondary sales may fall 30% in the June quarter and another 10% in the September quarter. On the other hand, primary sales dropped 40% for brands in the June quarter and another 10% in the September quarter.
● There has also been input cost pressure due to the disturbance of currency movement and import duties. As per the previous year, nearly 7 million units of ACs were sold in the country in a market growing at 10-12%. Along with a low AC penetration of 7–8%, the long-term prediction remains accurate. In January 2020, the Bureau of Energy Efficiency (BEE) made it compulsory for all room air conditioners to have a default temperature of 24 degrees Celsius.
Television
● The television industry in India achieved Rs 787 billion (US$ 11.26 billion) in 2019 and is expected to reach Rs 955 billion (US$ 13.66 billion) by 2021. From 2017 to 2018, the television market witnessed a 7.5% growth is recognized as one of the fastest-growing consumer goods in India. Also, the shipment of televisions in India increased by 15% yearly and reached the highest level of 15 million units in the fiscal year 2019. The market for the television industry in India has flown at a steady pace with the increased consumer affordability and the evolving technological innovations and development over the years.
Source: GlobalData
● The Indian television market includes television sets fused with light-emitting diode (LED), liquid crystal display (LCD), high definition (HD), and ultra-high definition (UHD) technologies. With the shifting consumer preference towards flat-panel TV’s in India, the flat panel television (LED, LCD, HD, and UHD) market was estimated at INR 690.16 billion in 2018 and is foreseen to reach INR 1,238.33 billion by 2024. On the other hand, the smart TV market is accountable for more than 70% of the total share.
● Foreign companies like Xiaomi, OnePlus, and Motorola have interrupted the smart TV segment in India with the launch of its extensive range of reasonable goods. Domestic companies are reducing product prices to survive in this competitive market.
Source: Counterpoint
● Further, the value of India's television industry is estimated to reach 13.6 billion U.S. dollars in 2021 and is projected to reach $13 billion by 2023.
● As per the Broadcast Audience Research Council, regional content had helped to encourage the whole television consumption in the country. Amongst the broadcast channels, the Hindi language took the prime spot and is the most preferred one in India.
Refrigerator
● The India refrigerator market is predicted to grow with a notable CAGR of 9.3%. Increasing family income, changing living standards, accelerated urbanization, increasing the number of nuclear families, widely untapped market, and environmental changes are essential operators for the refrigerator industry.
● The major companies are reducing their prices and launching new models with advanced features and new designs. The hot and humid weather situations have affected consumers continuously concerned about food decomposition and have created the demand for refrigerators. Consumers widely purchase home appliances as they give convenience and decrease manual efforts.
Source: Livemint
● This section offers up to 27% of the consumer appliances market. The market share of direct cool and the frost-free segment is 75% and 25% respectively. The evaluated market size in value for refrigerators in India is expected to be Rs 195 billion (US$ 3.02 billion in 2017 and is expected to reach Rs 344 trillion (US$ 5.34 billion) by 2022.
Source: Theeconomictimes
● In February 2018, Whirlpool Corporation invested in its Pune, India production facility which manufactures refrigerators. The investment was done to develop the refrigeration manufacturing potential and to achieve the best products for the Indian customers.
● In April 2019, Samsung launched the SpaceMax series refrigerator in India which stores more food without increasing the external dimension that came with a suitable kitchen interior and an all-round cooling system.
Summary
The home appliance segment in India has an enormous growth opportunity with the rising population in the country leading to increasing demand for consumption. The middle-class households having increased purchasing power and the willingness to adjust to new modified technologies have also driven the market growth. Both the local and international home appliances products are being manufactured in the country. As per the Euromonitor research, the Home appliances market as of the year 2017 is 900 Billion INR, which is anticipated to grow at 9% and by 2022 it is anticipated to reach 1400 Billion INR. It depicts a huge potential for growth possibilities in the future ahead.