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.(Source:ibef.org)
Consumer durable products are those kinds of products which do not deteriorate within a short period of time. It can just give you many benefits and utilities over a very long span of time. Instances include automobiles, books, household goods, sports equipment etc.These are all high-ticket items.
India is a fastest growing economy of the globe where this industry is probably taking the world by storm with the help of two big shots like Samsung and LG extremely famous for their product innovations and lifestyle features. Due to a huge population, the Indian rural market is now having better growth prospects than urban.The blue ocean rurban (i.e.rural plus urban) market of the country is also giving huge profits when it comes to FMCD sales and occupies a large market share in the overall dynasty.The Television segment is probably biggest contributing segment in the pie chart of sales.
This segment is dominated by key drivers like Videocon, BPL, Blue Star, Panasonic, Haier, Toshiba who have gained tremendous fame in the rural areas in spite of low penetration level. Few Chinese players are also giving strong challenges to Indian and foreign counter parts due to their inherent cheap instincts. But smart innovations have always become the name of the game-if a purchaser sees a real value for money, then he buys.
Rural India seems to be getting more serious about consumer durables. Analysts opine that near about 50 % of the rural population prefers to own a TV set, 8 % owns freezes and approximately 1 % owns washing machines.But since they rely heavily on solar or wind power or in many cases on generators,the consumption of all these products is getting affected and this rural style needs to be taken care by the manufacturers.
Consumer durables profits have been growing at a healthy pace. Let’s analyse few points taken from Google:
- The consumer durables sector revenues reached US$ 9.7 billion in FY15 and is expected to reach US$ 12.5 billion in FY16
- Consumer durable market expected to grow at CAGR of 13 per cent from FY05 to FY20
- Around two third of the total revenue is generated from urban population and rest is generated from rural population
- Samsung has emerged as the market leader in the consumer durable segment followed by the Indian giant Videocon
All the above points point out that the industry has got tremendous growth opportunities as far as GDP of our country is concerned. Moreover, we need to understand the challenges of Industrial as well as Agricultural belts of India. Based on the findings of this research, the manufacturers need to adopt a differential marketing strategy in order to please the Indian mindset.
Before we conclude we need to analyse the Indian mentality regarding consumer durables:
- The consumers want to own a product with a brand name
- Urban market wants costlier but latest products but rural demands cheap and durability,good after sales services,offers and discounts.
Hence we cannot adopt a universal strategy to unlock the Indian skies. It has to be area specific.Few suggestions are listed below:
While creating STP model,we need to pay attentions to attractive offers,gifts,coupons for village melas and exhibitions along with tailor made collaboration and customization to enhance the demand. An alignment with reasonable pricing, handiness, recognition, suitability,media triggered idiosyncrasy will be the next big thing for all fast moving competitors in the ages to come. Himalayan blunders in a dark civilization!
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