The industry is expected to grow around 10% in 2024 as players offer more premium products, cater to rising demand for smart appliances and make more investments after significant business tailwinds this year
New Delhi: The country’s appliances and consumer electronics industry is expected to grow around 10 per cent in 2024 as players offer more premium products, cater to rising demand for smart appliances and make more investments after significant business tailwinds this year.
Consumers are now looking for a “better total cost ownership” of products leading to a rise in demand for smart appliances, inverter ACs, heavy top-load washing machines, double-door frost-free refrigerators having over 300 litres capacity and large screen 4K LEDs, in which 51 inches screen is seeing the fastest growth in terms of sales, according to industry leaders.
Premiumisation, where users are not shying away from paying extra for a better experience, convenience, connectivity and energy efficiency, will be the key proposition for the industry as it seeks to consolidate growth after double-digit value-based growth in the festival season and encouraging business in the wedding season.
The industry, currently estimated to be around Rs 1 lakh crore, grew between 7 to 9 per cent in 2023, and is expected to rise around 10 per cent in 2024 gaining momentum on the back of under penetration and higher disposable income, the analysts opined.
According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the industry is also hopeful of robust sales of cooling products such as ACs and refrigerators, given predictions of high temperatures in the coming year.
“The consumer durables industry can witness huge growth in the coming years on the back of low penetration levels and rising aspirations of people. While the industry witnessed a ‘strong’ festival season, a huge potential for growth remains. The industry is expected to grow to Rs 1.48 lakh crore by 2025,” CEAMA President Sunil Vachani told PTI.
The industry is investing to upscale capacity and to create an ecosystem of domestic manufacturing of components with the government’s support to reduce its dependency on import-based foreign supply lines, which would help them to be more competitive in global markets.
“On the investment front, our industry has started a strong investment cycle with the PLI (Production Linked Incentive) scheme catching pace, significantly in mobiles, AC components, lighting and IT hardware,” he said.
South Korean manufacturer LG Electronics said there will be an increased demand for energy-efficient products apart from the growth in premium products such as bigger screen TVs, big capacity washing machines, and large-size refrigerators.
“Overall consumer sentiment has been positive and we expect this momentum to continue. India is a growing economy and consumers are early adopters of technology. Premium products will continue to grow. We will continue to grow in 2024,” LG Electronics India Senior VP Ashish Agrawal said.
On premiumisation, Vachani said this trend is going to stay here helped by factors such as rising disposable incomes, urbanisation, growing middle class, exposure to global trends, and changing consumer preferences.
“Businesses are adapting to this trend by introducing premium products and services to cater to the evolving tastes and preferences of consumers who are willing to pay a premium for quality, exclusivity, and an enhanced experience,” he said.
BSH Home Appliances, which operates in India with brands such as Bosch, Siemens, Gaggenau and Neff, said 2023 was a “challenging and yet dynamic year” for the industry.
“Premiumisation has been a noticeable trend in 2023, with consumers spending more to get innovative features and aesthetics. Growing emphasis on energy-efficient appliances with intuitive features, integration of artificial intelligence, smart connectivity and superior performance have redefined the industry landscape,” BSH Home Appliances India MD & CEO Saif Khan said.
Cautiously optimistic, Khan expects the industry to clock 7-9 per cent growth.
Sony India Managing Director Sunil Nayyar said the premium market in India has evolved and finally matured.
The premium television category comprising screen size of 55 inches and above along with audio products would be the “key growth drivers” for Sony India, he said.
Panasonic Marketing India Managing Director Fumiyasu Fujimori said the consumer durables industry is growing at a “steady pace” and the company continues to be on the growth track riding on the premiumisation wave, which is going to stay.
“Growth continues to be in the value-proposition and premium appliances. Consumers today are looking at appliances that offer a better, total cost of ownership,” he said.
Godrej Appliances Business Head and Executive Vice President Kamal Nandi said there is a slowdown in rural India, and even in the mass segment of urban India, which has almost been a continuing trend post-Covid.
“This year, the overall consumption of the mass segment in small towns and rural areas was impacted due to inflation and erratic monsoons, even as the upper segments continue to buy into premium products,” he said.
Nandi expects that once the economy recovers and purchase sentiments improve, the penetration of consumer durables in rural India will rise further.
In 2023, Super Plastronics Pvt Ltd (SPPL) said demand has been great but the challenge has been the revenue and bottom line as major brands in consumer durable, had decided to burn price to capture market share in their respective categories.
SPPL has licences for international brands, including Blaupunkt, Thomson, Kodak and White-Westinghouse, in the Indian market.
“I think a lot of brands which have burnt (prices) might give a second thought in 2024. Two major smartphone players have exited the TV category. I will not be surprised if we hear more names,” SPPL CEO Avneet Singh Marwah said.
Haier India President N S Satish said it is aiming for a 35 per cent growth next year as it is gearing up to introduce more innovative products in its portfolios of air conditioners, LED TVs, refrigerators, washing machines, water heaters and kitchen appliances.
