Summary

The home appliance segment is one of the fastest-growing industries in the Indian market. Home appliances in India have been increasing at a steady pace, driven by both large appliances and small appliances; in 2018, large appliances have slightly higher growth than small appliances. Most categories within home appliances saw both retail volume and current value growth in 2018. The sector has a vast untapped market for appliances, like air conditioners (AC), washing machines, and fridges. The air conditioner has a penetration of 4% in India as compared to the global average of 30%. The emerging economy and changing lifestyles of Indian consumers have been leading to growth in the number of working people, nuclear families, single-person households, and the migrating of the job population. Therefore, these developing households have an increasing need for accessibility and are looking for products that offer convenience and considerably reduce the time and effort spent on everyday chores. The main growth drivers for this industry are increased affordability, focus on energy-efficient products, increasing digital penetration, and the rise in aspiration. India has seen significant changes in its policies, especially those related to the regulatory and business environment. The appliances sector and the upcoming national policy for electronics (NPE) may bring about significant policy changes for the industry. The burgeoning middle class in urban areas and aspirational demand from rural India, coupled with government reforms in the form of GST, are making the appliances industry look positively toward the next phase of exponential growth. This growth in India's consumer market demand is driven primarily by rising disposable incomes in Indian households and easy access to credit, which induces growing purchasing power. Increasing the electrification of rural areas, along with the rising influence of social mass media and the popularity of online sales, is also likely to increase the demand. Two-thirds of the total revenue is generated from the urban inhabitants, and the rest is made from the rural inhabitants.

Key Market Trends

Offline Distribution Channel to Observe High Growth in Indian Home Appliance Market

The online channel registered significant growth in 2018 across the categories in-home appliance sector and is currently being viewed as one of the important channels to operate in the market. An increase in the sales for refrigerators, washing machines, and air conditioners is being witnessed through this channel. This is unique and new, as consumers may not buy without the touch-and-feel experience of the product in the store. Apart from changing lifestyles and working styles, urbanization has led to growth in this sector, which, in turn, has led to a change in consumers' buying behavior. In particular, the decision-making process before buying something has been significantly affected. The rise in urbanization in India has also led to its people having more additional disposable income than before.

Urban Areas Account for Majority of Sales in Market

The urban area accounted for a major share in total revenue in the home appliance market in India. There has been an increase in spending capacities of urban Indians who have been opting for products and services that act as a style statement or status symbol. The mounting need to reverberate with the products has accelerated the demand for personalized appliances that compliment the overall theme of the house and suit the utilitarian requirements of the household.

Basic household appliances, like washing machines, refrigerators, and mixer grinders, that are found in every Indian household have also been witnessing a high demand for the latest and advanced features. Interestingly, the demand for built-in appliances has been gaining thrust due to the perfect amalgamation of cutting-edge design technology and high functionality.

It is expected that an increased supply of electricity, coupled with rising disposable income, may increase the demand for other basic appliances, like mixer grinders, air coolers, and televisions. It may also see an increase in demand for direct cool refrigerators and eventually room air conditioners.

Competitive Landscape

The Indian home appliance market is highly competitive and moderately consolidated, as top players have a high market share in the industry of big and small appliances. Consumers have been becoming more technical understanding, and the manufacturers should be able ready to offer the best technological advancements to the users, thereby, increasing the investment into R&D. According to a source, in 2018, over 34% of the Indian population lived in an urban area, which is expected to rise in the coming years. This creates an enormous opportunity for the smart home market players.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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