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An in-Depth Study of Indian Consumer Durable Industry

An in-Depth Study of Indian Consumer Durable Industry

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Published by saraswat2009
It is an in depth study of Indian consumer durable industry.
It is an in depth study of Indian consumer durable industry.

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Published by: saraswat2009 on Oct 18, 2010
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An In-depth Study of IndianConsumer durable Industry
Wrote by : -Saraswat BhattacharyaMBA 09093Amrita School Of Business
Durable goods are those which don‘t wear out quickly, yielding utility over time rather than
at once. Examples of consumer durable goods include electronic equipment, homefurnishings and fixtures, photographic equipment, leisure equipment and kitchen appliances.They can be further classified as either white goods, such as refrigerators, washing machinesand air conditioners or brown goods such as blenders, cooking ranges and microwaves orconsumer electronics such as televisions and DVD players. Such big-ticket items typicallycontinue to be serviceable for three years at least and are characterized by long inter purchasetimes.Developing countries such as India and China have largely been shielded from the backlashof the recession, as consumers continued to buy basic appliances. In fact, China has beenranked the second-biggest market in the world for consumer electronics. Despite therecession, their strong domestic economy and growing high-income population have buoyeddemand leading to aggressive market growth.There is growing interest for new age products such as LCD-TVs and DVD players.Meanwhile, the penetration of the basic, largest dollar items such as ovens, washing machinesand refrigerators is also increasing. India too, has witnessed a similar phenomenon, with theurban consumer durables market growing at almost 10 %p.a., and the rural durables marketgrowing at 25% p.a. Some high-growth categories within this segment include mobilephones, TVs and music systems.The sector has been witnessing significant growth in recent years, helped by several driverssuch as the emerging retail boom, real estate and housing demand, greater disposable incomeand an overall increase in the level of affluence of a significant section of the population..Apart from steady income gains, consumer financing and hire-purchase schemes havebecome a major driver in the consumer durables industry. In the case of more expensiveconsumer goods, such as refrigerators, washing machines, color televisions and personalcomputers, retailers are joining forces with banks and finance companies to market theirgoods more aggressively. In addition, change in policy, such as the WTO FTA in 2005resulted in zero customs duty on imports of all telecom equipment, thereby improving thepricing and affordability of imported goods.
Overview of Consumer durable industry:
The Indian consumer durables industry has witnessed a considerable change in the pastcouple of years. Changing lifestyle, higher disposable income coupled with greateraffordability and a surge in advertising has been instrumental in bringing about a sea changein the consumer behaviour pattern. This industry consists of durable goods used for domestic
purposes such as televisions, washing machines, refrigerators, microwave ovens, mobilephones etc. The growth in the consumer durables sector has been driven primarily by factorssuch as the boom in the real estate & housing industry, higher disposable income, emergenceof the retail industry in a big way coupled with rising affluence levels of a considerablesection of the population. As per a survey conducted by FICCI on the Indian consumerdurables industry, a shift in consumer preferences towards higher
end, technologicallyadvanced branded products has been quite discernable. This shift can be explained bynarrowing differentials between the prices of branded and unbranded products added with thehigh quality of after sales service provided by the branded players. The shift has also beentriggered by the availability of foreign branded products in India owing to lower importduties coupled with other liberal measures as introduced by the government.The consumer durables industry can be broadly classified into two segments: ConsumerElectronics and Consumer Appliances. Consumer Appliances can be further categorised intoBrown Goods and White Goods. The key product lines under each segment are as follows.
White Goods Brown Goods/ HomeAppliancesConsumer Electronics
Refrigerator Electric Fan TelevisionWashing Machine Mixer, grinder and blender Mobile phone handsetAir conditioner Iron Mp3 PlayerSpeakers and Audio/musicsystemMicrowave/oven DVD PlayerCooking range Computer and Peripherals
Electric KettleWater PurifierPressure cookerWater heater or geyserOther electrical appliances

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