Indian consumer electronics market is anticipated to reach USD 118.4 billion in 2025, as per a new paper by Grand View Research, Inc. Growing disposable income, accelerated urbanization, as well as the introduction of innovative products in the market, is assumed to further contribute to the market growth.
The requirement for flat washing machines, refrigerators, and TVs are increasing with a decline in the infiltration of products vis-à-vis global levels, urbanization, and rising disposable income of customers. There has been an improvement in imports from regions such as South-East Asia, and China considered to be low-cost regions, owing to several free-trade agreements, and availability of low-priced products, in relation with prices about local manufacturing. To appropriately suffice the rising domestic demand, and the export requirement to the neighboring regions and the Middle East and Africa, global market participants, are planning to develop their local manufacturing in India, therefore making it an export center.
Nonetheless, presently the Indian manufacturers are confronting challenges such as, inverted duty arrangement due to free trade treaties, which makes Indian manufacturing uncompetitive for white products, including refrigerators, ACs, and washing machines. The non-applicability of Modified Special Packages Scheme (MSIPS) in numerous consumer durables; increased excess duties, under-developed and inadequate local supplier base; and high-cost of production and capital costs because of constantly changing energy productivity requirements also add to this scenario.
The factors contributing to the growth of this business include enhancing levels of income and urbanization, increased affordability of goods, product innovation, access of newer variants of products, simple consumer financing, and growth in the share of organized retail. Developing local value addition levels and growing ventures will recognize a manifold jump, as an expanding number of OEMs are predicting the localization of their commodities in India.
Development in the Indian consumer electronics market can be associated with increases in demand from households, shifting lifestyles of individuals, more accessible way to credit, and increasing disposable incomes. Deliberate reduction by the Government in the import bill, copulated with government and corporate spending is expected to complement the positive interest in this market. The Indian consumer electronics sector has brought several significant investments in the structure of merger and acquisition strategies practiced by significant participants of the global market and additional FDI inflows.
According to the Make in India initiative, Electronic Development Fund Policy has been approved, to justify a transposed duty structure. Another purpose, such as the Modified Special Incentive Package Scheme (M-SIPS) has been included to provide a capex subsidy of approximately 15 – 20 percent. Consumer electronics manufacturers are placed to elevate investments in stock, distribution, and R&D in the next several years. With the growing appearance of organized retail, the market has undergone the emergence of fashionable, durable retail chains, which comprise e-retailers such as Reliance Digital, E Zone, Tata Croma, to name a few.
The Indian market is one of the biggest growing electronics markets in the world and stands on 5th position globally. India currently has been increasing at an average rate of 15 percent per year. Digitalization is transforming the means consumers discover, judge, and purchase the products. The sector over some point has also attracted increased investment, which has pointed to a strong focus on production, distribution, and R&D. Among numerous reasons that have accelerated the demand increase, some key trends that encourage disruption to Indian Markets incorporate:
Enhanced affordability of the products
Competitive price points, all year long discounts, be it celebratory or e-commerce push along with many technological trends has transformed the market dynamic. Standardized Tax Rates with GST and government promoting Make in India, the industry has developed durable traction on manufacturing. Several Chinese names, as well as domestic brands, have set up assemblies and also are massively investing in India. Lastly, with a mighty push towards manufacturing, products are assumed to become cheap, which is additionally expected to reduce the prices of the merchandise.
Attraction towards premium rroduct
The danger to global technologies and lifestyle has built a perception shift, and consumer durables are not just observed as utility products anymore. Consumers are now well aware and adorned with information that helps them understand how choosing more conventional technologies will result in better usability. Customers are seeking powerfully designed and better technology products for both luxury and convenience. And they are ready to pay for it as well. The fascinating fact is that even tier II and III markets have been showing a sizeable desire for premium products. On the other hand, brands are now attracting consumers for premium products at further affordable pricing.
Augmentation in new segments
This is not in reference to geographical expansion, but the increasing ‘new’ consumer base. Today the advent of a new age generation called the ‘millennial generation or Gen Y’ is the one who determines what kind of products and what technology to look at. This new section shall open new avenues in the market.
Cross-channel purchasing and the continued growth of discounters
The consumer who buys at only one type of store is growing a rarity. Consumers are obtaining purchases from various retail banners, formats, and courses. Furthermore, shoppers are also transferring towards discounters and aside from local retailers. Discounter businesses are growing at around 5 percent per year, bringing stagnancy to retail arrangements.
Moreover, India is the home of occasions and festivals. Therefore, consumers are offered great deals. For example, the prices of merchandises during Diwali, Holi, New Year, etc. go down, and customers are presented with great deals. Such occasion based procedures shall maintain the goodwill amongst buyers.
Move to alternative sources
Almost 50 percent of the Indian families do not have access to electricity, and neither the potential to pay high power bills. So, the future policies need to look at alternative sources to cover these markets. Also, a transformation towards Eco-Friendly products will encourage the future too.
Filed Under: Blog entry, Tech Articles