Consumer durable is one of the fastest growing industry segments in India. This industry has demand from both urb an and rural markets. Urban markets account for the major share i.e., 65% of total revenues in the Indian consumer durables sector. In rural markets, durables such as refrigerators and consumer electronic goods are likely to witness growing demand in the coming years. India is likely to emerge as the world’s largest middle class consumer market with an aggregated spend of nearly US$13 trillion by 2030 as per a report by Deloilte titted, “India matters, winning in growth markets”. As against the Compound Annual Growth Rate (CAGR) of 13% in FY 13-FY 14, it is expected to expand at CAGR of 14.8% in FY 2015. India’s consumer durables industry accounts for more than 2/5th of end - consumer spending, and creates three indirect jobs for every direct job and contributes to more than 5.5% of the index of industrial production according to a Federation of Indian Chambers of Commerce and Industry- Ernst & Young Report

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Dr. P. Sugunalakshmi and A. Rathina Maheswari. “Consumer Durable Industry in India – Present
Trend, Challenges and Future Prospects” - (ICAM 2016)
CONSUMER DURABLE INDUSTRY IN INDIA – PRESENT TREND,
CHALLENGES AND FUTURE PROSPECTS
Dr. P. Sugunalakshmi
Associate professor,
Seethalakshmi Ramaswami College, Trichy-2
A. Rathina Maheswari
Research scholar,
Seethalakshmi Ramaswami College, Trichy-2
ABSTRACT
Consumer durable is one of the fastest growing industry segments in India. This industry
has demand from both urban and rural markets. Urban markets account for the major share
i.e., 65% of total revenues in the Indian consumer durables sector. In rural markets, durables
such as refrigerators and consumer electronic goods are likely to witness growing demand in
the coming years. India is likely to emerge as the world’s largest middle class consumer
market with an aggregated spend of nearly US$13 trillion by 2030 as per a report by Deloilte
titted, “India matters, winning in growth markets”. As against the Compound Annual Growth
Rate (CAGR) of 13% in FY 13- FY 14, it is expected to expand at CAGR of 14.8% in FY 2015.
India’s consumer durables industry accounts for more than 2/5th
of end- consumer spending,
and creates three indirect jobs for every direct job and contributes to more than 5.5% of the
index of industrial production according to a Federation of Indian Chambers of Commerce
and Industry- Ernst &Young Report.
This article aims at portraying the factors that are contributing to the growth of the
consumer durable goods market, the production, penetration level of the consumer durables
viz., Television, Refrigerators, Washing machine, and Air conditioners, their growth rate and
market size and SWOC analysis of the industry.
Key words: SWOC analysis, Consumer Durable Goods in India, CAGR, Market penetration:
India.
Cite this Article: Dr. P. Sugunalakshmi and A. Rathina Maheswari. Consumer Durable
Industry in India – Present Trend, Challenges and Future Prospects. International Journal of
Management, 7(2), 2016, pp. 449-453
http://www.iaeme.com/IJM/index.asp
1. GROWTH DRIVERS
With the continuous inflow of disposable income and the advancement of technology the need for the
varied consumer durable goods are increasing. The factors that contribute to the growth of this market
segment are enlisted with statistical facts in the following paragraphs.
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2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
6510(Online), Volume 7, Issue 2, February (2016), pp. 449-453 © IAEME Publication
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Dr. P. Sugunalakshmi and A. Rathina Maheswari. “Consumer Durable Industry in India – Present
Trend, Challenges and Future Prospects” - (ICAM 2016)
2. RISE IN DISPOSABLE INCOME
Per capita income in India is expected to grow at a CAGR of approximately 6.6% to around US$2,200
in 2019 from ~US$1,500 in 2013. Increasing trend of working women population will drive demand
for home appliances such as washing machines.
3. RISE IN ORGANIZED RETAIL
Organized retailing will not only streamline the supply chain, but also facilitate increased demand,
especially for high end and branded products. Organized retail industry is expected to cover a market
share of 15%–18% in2020, from around 3% at present.
4. GROWING DEMAND IN RURAL MARKETS
India’s rural market, accounting for approximately 69% of India’s households, offers significant
opportunities for the consumer durables industry. Around 50% of the rural population owns TV, 8%
owns refrigerators and around 1% owns washing machines. Moreover, increasing electrification of
rural areas would augment the demand.
5. URBANIZATION AND GREATER BRAND AWARENESS
The Indian urban population is projected to increase from 31% in 2011 to 41% of the total population
by 2030. Urban consumers have started to perceive consumer durables as lifestyle products and are
open to pay increased prices for branded products.
6. PRODUCT INNOVATION AND AVAILABILITY OF NEWER VARIANTS OF PRODUCTS
The consumer durables market is now flooded with a plethora of products, each providing different
features and technology, new options and added advantages and has evolved from a market with
limited products and few features. The replacement cycle has reduced from 9–10 years to 4–5 years for
most of the goods in this sector.
7. NARROWED PRICE GAP AND INCREASED AFFORDABILITY OF PRODUCTS
Growth in demand for products, once considered luxuries, such as air-conditioners, washing machines
and high end colour TVs, is a reflection of narrowed price gap. In the case of expensive consumer
goods, retailers are providing easy financing options to consumers by collaborating with banks.
An analysis of the data contained in Table 1 reveals clearly the growing demand for the consumer
durable goods in India.
Table 1 Production of Television, Refrigerator, Washing machine, Air conditioner from 2010-2014
Year
Television Refrigerator Washing machine Air conditioner
total % total % total % total %
2010 650 5.5 8001 19.2 3049 19.3 1458 15.7
2011 1170 9.9 8715 21.0 3080 19.6 2346 25.2
2012 1930 16.4 7738 18.6 2995 19.0 1666 17.9
2013 3090 26.3 8686 20.9 3225 20.4 1890 20.3
2014 4940 41.9 8421 20.3 3429 21.7 1948 20.9
Total 11780 100 41561 100 15778 100 9308 100
Source: Study on Indian Electronics and Consumer Durables Segment, 2015

3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
6510(Online), Volume 7, Issue 2, February (2016), pp. 449-453 © IAEME Publication
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Dr. P. Sugunalakshmi and A. Rathina Maheswari. “Consumer Durable Industry in India – Present
Trend, Challenges and Future Prospects” - (ICAM 2016)
Table 2 Market penetration: India vs. Global Average
Types of durables
Market
India Global
Television 60% 89%
Refrigerator 21% 85%
Washing machine 8.8% 70%
Air conditioner 3.0% 60%
Source: Study on Indian Electronics and Consumer Durables Segment, 2015
The penetration rate of Air conditioner in India is the lowest one when compared with the global
average rate of penetration. Penetration rate of Television is the highest among the penetration rate of
other durables in India and is reaching nearer the global average rate.
Table 3
Name of the country Penetration level
USA 856
Russia 865
China 772
Europe 751
Germany 676
Brazil 678
Mexico 475
India 179
Source: Consumer Electronics and Appliances Manufacturing Association, 2014
Russia stands first in the penetration level of T.V sets with 865 per 1000 population followed by
USA with 856. India ranks last with 179 which point out the fact that india has got more untrapped
population in its fold.
Table 4 Household penetration of Air conditioner
Country percentage
Taiwan 89%
Singapore 72%
China 53%
Korea 50%
Indonesia 8%
India 7%
Source: Consumer Electronics and Appliances Manufacturing Association, 2014
Table 4, it is obvious that Taiwan leads in the household penetration of air conditioner. Singapore
stands second in the penetration level. India is with the least percentage of 7 as for as the penetration of
air-conditioned is concerned.

4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
6510(Online), Volume 7, Issue 2, February (2016), pp. 449-453 © IAEME Publication
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Dr. P. Sugunalakshmi and A. Rathina Maheswari. “Consumer Durable Industry in India – Present
Trend, Challenges and Future Prospects” - (ICAM 2016)
Table 5 Household penetration of Home appliances in India
Home appliances percentage
Television 60
Refrigerator 31
Washing machine 10
Air conditioner 6.8
Source: Consumer Electronics and Appliances Manufacturing Association, 2014
Among the household appliances, the penetration level in India is the highest one for T.V sets with
60%. Refrigerator stands second with 31% penetration. Washing machines have penetrated into Indian
market to the extent of 10%. Air conditioner’s penetration level is the least with 6.8%.
Table 6 Indian market size (in INR Billion)
Year Television Refrigerator Washing machine Air conditioner Total
2011 329 57.1 58.5 - 444.6
2012 380 67.4 73.1 - 520.5
2013 435 74.2 87.4 77 673.6
2014 514 80.8 101.4 86 782.2
2015 618 87.3 122.2 96 923.5
Source: Consumer Electronics and Appliances Manufacturing Association, 2014
An Analysis of Table 6 reveals the fact that Television contributes major share to the Indian
market size expressed in billions of Rs. In the year 2011 it contributed 74% and thereafter declined to
67% in 2015, though in actual value it has increased to 618 billion. This decline in percentage share to
total market size is due to the share captured by Air conditioner market. Next to Television, Washing
Machine contributes 14% to the total market share. This is followed by Refrigerator with 13%
approximately in the first two years and thereafter third place is secured by Air conditioner in the last
three years.
8. SWOC ANALYSIS
8.1. Strength
 Presence of established distribution networks in both urban and rural areas.
 Presence of well-known brand
 In recent years, organized sector has increased its share in the market Vis a Vis the
unorganized sector.
 Easy availability of finance.
8.2. Weakness
 Demand is seasonal and high during festive season.
 Demand is dependent on good monsoons.
 Poor Government spending on infrastructure.
 Low purchasing power of consumers.
8.3. Opportunities
 In India, penetration level of white goods is lower as compared to other developing countries.
 Unexploited rural market.
 Rapid urbanization and greater brand awareness.
 Increase in Income levels, i.e., increase in purchasing power of consumers.

5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
6510(Online), Volume 7, Issue 2, February (2016), pp. 449-453 © IAEME Publication
453
Dr. P. Sugunalakshmi and A. Rathina Maheswari. “Consumer Durable Industry in India – Present
Trend, Challenges and Future Prospects” - (ICAM 2016)
8.4. Challenges
 High import duties on raw materials
 Cheap imports from ASEAN at 0% or concessional import duty and import from China.
 Poor infrastructure; non availability of regular power supply, which is imperative for
consumer electronics product.
 Income tax, excise and customs duty are set by the Central Government, States and
Municipalities also levy their own taxes.
 Limited scale and quality from domestic suppliers.
 Capital intensive nature of business.
 Ease of setting up and running businesses.
 Insufficient and under- developed local suppliers base.
9. CONCLUSION
India is expected to become the fifth largest consumer durables market in the world by 2025. The
consumer electronics market is expected to increase to US$ 400 billion by 2020. The production is
expected to reach US$ 104 billion by 2016.
The sector is expected to double at 14.7 per cent compound annual growth rate (CAGR) to US$
12.5 billion in FY15 from US$ 6.3 billion in FY10. Urban markets account for the major share (65 per
cent) of total revenues in the consumer durables sector in the country. 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.
The Government of India has increased liberalization which has favoured foreign direct
investments (FDI). Also, policies such as National Electronics Mission and digitization of television
and setting up of Electronic Hardware Technology Parks (EHTPs) are expected to boost the growth of
this sector.
The consumer durables market is anticipated to expand at a CAGR of 14.8 per cent to US$ 12.5
billion in FY15. Also, the demand from rural and semi-urban areas is projected to expand at a CAGR
of 25 per cent to US$ 6.4 billion in FY15, with rural and semi-urban markets likely contributing
majorly to consumer durables sales.
REFERENCES
[1] www.ey.com
[2] www.wefonline.org
[3] www.ceama.in
[4] www.adlittle.com
[5] www.freedoniagroup.com
[6] www.cci.in