According to the latest report from Crisil, the Indian consumer durables sector is poised to grow at a steady rate of 15-18 percent to Rs 1 trillion this fiscal year, with a volume increase of 10-13 percent. This represents a jump in pre-pandemic volume by around 3 percent, driven by improved consumer sentiment and a boost in urban income. With India’s first fully open festive season coming up, it is anticipated that the consumer durables segment will do particularly well, with many anticipating as much as a double-digit growth. Although the jury remains out on exactly which goods will be bought where and at what prices, we can certainly expect premium consumer durables to have a field day this Diwali.
The consumer durables segment includes goods like microwaves, air-conditioners, televisions, washing machines, vacuum cleaners, mobile accessories, and more. Most of these entail large sums in expenditure, which many were hesitant to undertake during the pressures and job uncertainties of the pandemic.
The Premium Trend
Now that things are heading back to normal, though, buyers feel less financially burdened and are willing to splurge on large electronic goods. In particular, one can take note of the trend shift towards buying premium consumer durables, a sub-segment that is likely to grow much faster than entry-level goods. There are two main reasons behind this.
For one, now that most people are working from home, they are keen on investing in appliances that go the extra mile and make their home feel more luxurious, such as ‘smart’ ACs and washing machines, large-screen televisions, microwaves with gourmet food preparation options and so on. The work-from-home culture has also boosted the consumer accessories space. Power Banks, smart watches to monitor general health, headphones and earphones have penetrated the market as “must-haves” for home offices. Companies have also identified these trends and have brought out quality products at affordable prices for home office needs employees in almost all sectors.
For another, it has long been a tradition to buy new products for the house during Diwali. Added to this is the growing demand from Tier-II cities as their disposable income goes up, internet penetration improves and their aspirations start mirroring those of their Tier-I counterparts.
Festive Season Gifting To Boost Growth
In response, companies selling consumer durables have done the smart thing and have designed their Diwali marketing strategies around a special push for their premium goods across geographies. They are especially doubling down on the surge in gift purchases, especially now that it has become common to give smart accessories and wearables as Diwali presents. For instance, given the affordable prices offered by many domestic leaders in the consumer electronics segment, trends indicate that buyers will spend more on things like wireless headphones or smartwatches than on, say, smartphones. No longer do tech-savvy customers need to look exclusively to international brands - homegrown electronics and consumer accessories brands have begun to deliver practical, highly functional products in unique designs that deliver a comparable experience and make for excellent gifts to a loved one. Companies manufacturing such goods are already launching campaigns to encourage sales based on promotions, offers, flexible returns, easy payment policies, and more. Another trend in the premium sub-segment is personalization, especially for Diwali gifts - and brands are not only prepared to meet this demand but are actively pushing it through their marketing strategies.
After a two-year spell in the dark, the festival of lights is expected to shine brighter than ever, especially when it comes to buying new things. Today’s Indian consumer wants top quality without having to pay a fortune for it, which is what up-and-coming consumer durables brands are catering to. Gone are the days, therefore, of low penetration and buyer caution in the durables segment - as ‘affordable premium’ becomes the new standard to aim for, we can expect most Indian homes to be enriched with the best of everything, during Diwali and beyond.