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Indicus Consumer Handbook - Asset Penetration and Housing Conditions

by on Oct 22, 2009

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DURABLE AND GOODS PENETRATION ...

DURABLE AND GOODS PENETRATION
Most homes in India have a cot or a bed, but a large proportion of
those do not have mattresses. Though data is unavailable, it is
likely that despite the presence of cots/beds in most Indian households,
the large majority of Indians sleep on the floor as average
home area is small and there is not that much space for furniture.
Apart from cots, timepieces (watches and clocks) are the most
prevalent, followed by mattresses, chairs and electric fans. This is
followed by televisions, where almost half of all households in the
country have access to either a colour or black and white TV. With
improvements in access to electricity, it is likely that the penetration
of fans will go up further. Refrigerator is the next most important
white good that has great potential demand. However, unlike
the fan, the refrigerator requires 24-by-7 electricity for it to be of
any use. Given the poor supply of electricity in greater part of
India (in most rural areas it continues to be limited to a few hours
a day), the utility of refrigerators is quite doubtful. The large majority
of households still do not have a mobile phone, but at the
current rate of expansion, it is only a matter of time, before penetration
of mobiles would be more or less universal.
Among all durables and various household goods, rural penetration
rates are lower than those in urban areas. This is not only
due to lower aggregate incomes in rural India; a large number of
manufacturers of such items have not been able to penetrate into
the hinterlands as much as they would like to. The cost of selling
and servicing in far flung areas are quite high; in urban areas,
however, the concentration of demand makes it easier to spread
such costs over larger sales.
The bicycle continues to be the preferred means of transport
for Indians; but two wheelers have been catching up rapidly in the
last couple of decades. With increased rural incomes, improved
rural roads (the Pradhan Mantri Gram Sadak Yojana seeks to connect
all the 600,000 odd villages in the country with surfaced
roads), greater spread of petrol pumps; it is only a matter of time
when the majority of Indian households would have graduated to
two wheelers. Barely 3 per cent of Indian households have access
to a car with most being in urban areas. Very low cost cars are
about to make an entry into rural and urban markets in the near
future; however, given their larger fuel consumption, greater price
and maintenance costs; it will be some time before they will be
able to compete with the two wheelers.
Small-sized households with one or two rooms and with five
to six persons living in them are highly space constrained entities.
This keeps a check on the type and scale at which the poor and the
lower middle classes use various consumer goods and durables.
Hence with improved incomes not only will households need to
change housing conditions, but housing itself.
HOUSING CONDITIONS
Housing conditions are at the very core of understanding consumers’
economic characteristics and their decision-making. In poor
country, such as India, the bulk of homes have a single dwelling
room, but there is a significant and growing middle class and the
affluent, and this is reflected in a pyramidical distribution of
households by number of rooms.
Low standard of living is also reflected in the fact that the majority
of households have kuccha (tiles or grass/bamboo, etc.)
roof. Concrete roofs are rapidly growing in importance and will
soon overtake all other. The floor however is another story, mud
flooring rules – it has significant cost advantages and is not too
difficult to maintain as well. However, as more and more people
put up concrete walls and roofs, having tiled or stone flooring will
be a natural progression.
Energy is required by households for both lighting and cooking.
Electricity has finally taken over as the most accessed source
for li

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Indicus Consumer Handbook - Asset Penetration and Housing Conditions Indicus Consumer Handbook - Asset Penetration and Housing Conditions Document Transcript