5 Trends Driving Disruption in the Indian Consumer Durable Market
Indian market is one of the largest growing electronics Market in the World and ranks on 5th position globally. India currently has been growing at an average rate of 15% per year. Digitalization is transforming the way consumers discover, evaluate & purchase the products. The sector over a period of time has also attracted increased investment which has led to strong focus on production, Distribution and R&D. Among many reasons that have accelerated the demand growth, some key trends that drives disruption to Indian Markets includes
Increased Affordability of the Products: Aggressive Price Points, all year long discounts be it festive or ecommerce push along with several technological Trends has turned the Market dynamic. Reduced Tax Rates with GST and Government encouraging Make in India, the industry has built strong traction on Manufacturing. Several Chinese Brands as well as Domestic Brands have set up units and also are heavily investing in India. Lastly, with strong push towards Manufacturing, products are expected to become cheap, which is further expected to reduce the prices of the product.
Premiumnisation: The exposure to global technologies and lifestyle has created a perception shift and consumer durables are not just viewed as utility products anymore. Consumers are today well aware and equipped with information that helps them understand how opting for better technologies will result in better usability. Consumers are seeking better designed and better technology products for both comfort and convenience. And they are willing to pay for it as well. The interesting fact is that even tier II and III markets have been showing a sizeable appetite for premium products. On the other hand brands, are now enticing consumers for premium products at more affordable pricing.
Expansion in new segments: We are not referring to the geographical expansion, but the widening NEW consumer base. Today we have a new age generation called the ‘millennial generation or Gen Y’ which decides what kind of products and what technology to look at. This new segment shall open new avenues in the market.
Cross-channel shopping and the continued rise of discounters: The consumer who shops at only one type of store is becoming a rarity. Consumers are making purchases from multiple retail banners, formats, and channels. Furthermore, shoppers are also migrating towards discounters and away from local retailers. Discounter sales are growing at approximately 5 percent per year bringing stagnancy to retail formats. Also, India is the land of occasions and festivals, therefore, customers are offered great deals. For instance, the prices of products during Diwali, New Year, etc go down and customers are offered with great deals. Such Occasion based strategies shall maintain the goodwill amongst buyers.
Shift to alternative resources: Almost 50 per cent of the Indian households do not have access to electricity and neither the capacity to pay high power bills. So, the future systems need to definitely look at alternative resources to cover these markets. Also, a shift towards Eco-Friendly products will drive the future too.
Director - Aisen India