After a lull of about 2 year, the consumer durable market is back with its robust growth trajectory with the help of increasing disposable income, easy financing opportunity and the whooping esteem of eCommerce industry.
With more and more consumers drifting towards the digital mode of shopping, the trend has uplifted a lot of such high prevalent retail segments. CDIT, too, is touted to witness a reconnoitre boom in 2016. Betting on the trend, many leading appliance makers including LG, Panasonic, Intel and Videocon etc. have reallocated their work force into the online bandwagon. As per a Google report last year, consumer durables account for about 45 per cent of the Indian online market. These numbers are predicted to witness multi-fold growth in the years to come. With the booming eCommerce scenario and changing consumer behaviour, CDIT industry as a whole is growing at a CAGR of around 20 per cent.
But, what made consumer durable market bounce back? Is it the new-age well informed consumers or variety of retail formats to choose from or the hotbed eCommerce injection happening in retail? Well, I think it’s a mix bag of them all! Today consumers are well informed and have the ease of researching about the products online before making a purchase and hence they end up completing their transaction online. In a report published by the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the CDIT industry overall saw a whooping splurge in demand in the year 2015 and witnessed a growth of almost 25 per cent during the festive periods. Commenting on this development, CEAMA President Manish Sharma said that the industry has been on a high-growth trajectory in 2015 betting on the increasing technological preferences and government support.
Many eCommerce majors of the country, with their festive bonanzas and season sales, kept an aggressive focus on pushing the online sales for the category in 2015. Heavy discounting, doorstep delivery and easy finance options successfully smacked the bull’s eye to lure more and more customers. If we look at the numbers, as per a report published by Indian Brand Equity Foundation (IBEF), the consumer durables sector revenue reached $ 9.7 billion in FY15 and is expected to reach $ 12.5 billion by the end of FY16. The report also highlighted that the demand in urban markets is expected to increase for non-essential products such as LED TVs, laptops, split ACs and, beauty and wellness products. In rural markets, durables like refrigerators as well as consumer electronic goods are likely to witness growing demand in the coming years as the government plans to invest significantly in rural electrification. All these above mentioned statistics is because of the rising online shopping demand and increasing millennial consumers in the country.
As customers today have ample amount of options to shop, brand loyalty is becoming volatile. New-age consumers want to try everything and stubbornness towards brands is fading. Betting on the trend, many eCommerce majors have come up with their private labelled products, response to which has been quite significant.
New trend of bundling a bunch of similar products rather than giving discounts on single products are welcomed by consumers. Today, the consumer durables industry is largely betting on smart promotions to lure more and more consumers. Many studies and researches also indicate that in this sector (especially the online spectrum), at least one out of 5 customers buy more than planned, if provided with attractive deals, discounts and cashbacks. All of these above mentioned inclinations are likely to enhance in the years to come and this will further boost the demand of the CDIT sector in terms nabbing a larger consumer pie.