This document provides an overview of the consumer durable industry in India. It discusses key characteristics of the industry such as rapid innovation and cost pressure. It then focuses on the Indian market, describing how it has grown significantly since liberalization. Major players like LG and Samsung now control a large share of the market. The document analyzes the industry using PEST and Porter's Five Forces frameworks. It provides statistics on market sizes and growth rates of various consumer durable segments. Finally, it discusses the leading players like LG and presents details about LG's operations, product portfolio, and financial performance.

1. Consumer Durable Industry

2. Consumer Durables- Overview Mass market heavy goods such as washing machines, refrigerator etc. intended to last 3 or more years. Also called hard goods

3. Consumer Durable IndustryWhite/Brown

4. Characteristics - Consumer Durable IndustryRapid InnovationDynamic market placeHighly competitive industrySignificant ‘time to market’ pressureSignificant cost pressureRapid rate of market penetrationRapid transition of technology

5. Consumer Durable Sales (USA)Source: Consumer Electronics Association

6. Key Findings - Global Asia-Pacific region is the most lucrative area for the consumer electronics industry, as most of the markets are still untapped.

7. MP3 players continue to drive the audio market worldwide.

8. Wi-Fi networking is expected to become a key enabler for the delivery and redistribution of content in homes, particularly for retail consumer electronics hardware.

9. Mobile camera phone market has emerged as the single largest market for image sensors, surpassing the entire consumer electronics segment, including digital still cameras worldwide.

10. The strongest growth in consumer electronics segment is expected to come from China by 2012, as the demand for consumer electronics is rising with the rapid pace of economic development and low cost consumer electronics manufacturing.

11. On the back of this strong demand, China will become the second largest market for consumer electronics, after US.Top 5 Emerging Nations (Consumer Electronics)CHINAINDIABRAZILMEXICOSOUTH AFRICAThe Top 5 Emerging countries contributed $37.6 billion to the global consumer electronics industry in 2007, with a CAGR of 10.9% between 2003 and 2007In 2012, the market is forecast to have a value of $51.2 billion, with a CAGR of 6.4% over the 2007-2012 period.China is the leading country among the Top 5 emerging nations, with market revenues of $21.6 billion in 2007Source: Consumer Electronics Association

12. Indian Consumer Durables- OverviewPre liberalization , only a few companies like Kelvinator, Godrej, Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Post liberalization, foreign players like -LG, Sony, Samsung, Whirlpool, Daewoo, Aiwa came into the picture. Today, these players control the major share of the consumer durables market43%

13. Indian Durable Industry- PESTAnalysisPolitical Factors:Anti-dumping duty on imported color picture tubes.FDI (100%), High Tax IncidenceResolution to reduce emission of carbon footprints in the atmosphere

14. Effect of GST & DTCReduction in overall tax incidence (14-16% from 20- 25%)More disposable incomeEfficient SCM Prices of goods to reduce in the medium term

15. Indian Durable Industry- PESTAnalysisEconomic Factors:Growth of retail sector – expected to reach 16% by 2011-12 from 4% in FY07Easy fin schemes to consumerEconomic reforms by the government –higher purchasing powerEmergence of organized retail market with large players like Croma, next, reliance digital etc – leading to lower prices and higher varietiesIndian incomes are likely to grow three-fold over the next two decades

17. Indian Durable Industry- PESTAnalysisSocial Factors :Disposable Income roughly doubled since 1985Changing perception of luxury to necessityRural market – constraintsDemand of the consumer durables is seasonal Decrease in average household sizeSource- CRISIL, NKP Research

18. Indian Durable Industry- PESTAnalysisTechnological Power efficientHigher quality products Technological advancements

19. Indian Durable industry - SWOT

20. Indian Durable Industry- Porter’s 5 forcesSupplier PowerIndigenous supply base limited - most raw materials are importedThreat of New Entrants• Most current players are global players• New entrants will need to invest in Brand, Technology and DistributionCompetitive Rivalry• Number of well established players, with new players entering• Good technological capability• Many untapped potential marketsCustomer PowerMultitude of brands across price points - wide variety of choice for customersThreat of SubstitutesTechnological Enhancement

21. Indian Durable MarketThe Indian durables market, with a market size of US$ 27.38 billion in 2008–09, has grown by 7.1 per cent over the previous year. The compounded annual growth rate (CAGR) for the industry has been recorded at 20.3 per cent between 2004 and 2009.

22. Consumer ElectronicsProduction in the consumer electronics industry is US$ 6.7 billion in 2009–2010.The segment registered a growth of 18 per cent in 2009–2010 from US$ 5.5 billion in the previous year.The consumer electronics segment contributes about 27 per cent to the total hardware production in the country.Source: Department of Information Technology, Minister of Communication & IT, Government of India., & http://www.mit.gov.in/dbid/eproduction.asp#2

23. Consumer ElectronicsSources: “Consumer durables: Durable enough for tough times,” The Economic Times, December 13, 2009; Department of Information Technology, Minister of Communication & IT, Government of India.

24. Consumer AppliancesThe consumer appliances market is estimated at US$4.34 billion, with imports valued at US$ 1.22 billion in 2009–2010. Most imports are in the finished goods categories such as watches, electric coffee makers, food grinders, electric heaters, etc.Rs.bnSource- www.ibef.org/download/consumer_durable

25. Key Players

26. Key Players

27. Product Mix Of Key Players By volume

28. Electronic Goods EX-IM Every year India imports electronics and appliances in huge quantity. More that 70 per cent of Indian electronics market depends on import of both finished goods and components.India imported worth US$ 18.5 billion and exported worth US$ 3.69 billion of electronics goods between April 2008 and February 2009*excluding computer in physical formSource: Ministry of Commerce and Industry, Government of India, Annual Report 2008–09.

29. Sales Trend- Consumer ElectronicsSource- CRICIL

30. Consumer Durable- Growth DriversAppreciation of Indian Rupee

31. Consumer Durable- Growth DriversAvailability of financingSource- CRISIL, NKP Research

32. Consumer Durable- Growth DriversIncome Growth

33. Refrigerator Market Share Source- CRICIL

34. Television Market ShareSource- CRICIL

35. Washing Machine Market ShareSource- CRICIL

36. Mobile Phone Market ShareSource- CRICIL

37. DTH TV Market ShareSource- CRICIL

38. Consumer Durables SCM IMPORTANCE: Product Proliferation

39. Multiple players

40. High competition

41. Benchmarking and TQM

42. Production Demand mismatch

43. Ever Increasing Targets

44. Bargaining power of RetailersOBJECTIVES: Efficient Sourcing

45. Demand Planning

46. Inventory Optimization

47. Order Management

48. Tracking

49. High Inventory for High Demand Periods

50. Reverse LogisticsBenefits of Efficient SCMReduced vendor payments due to better on-time delivery and improved availability

51. Increased revenues from improved availability of high fast moving inventory

52. Working capital reduction due to improved inventory management and reduced order cycle times

53. Fixed capital reduction due to effective asset utilizationConsumer Durables ChannelTraditional RetailingCompany Managed StoresFranchisee ShowroomsReverse Logistics E-RetailingIndividual ConsumersInstitutional Consumers

54. Consumer Durable Supply ChainCOMPANYSHOWROOME Retail

55. Planning and ForecastingAnnual Forecasts based on previous year sales and current trends. These sales are disaggregated into monthly sale plansCatering for the seasonal variations in demandInteraction between production and marketing departments for better quality of forecasts and demand utilization.

56. Consumer Durable Value Chain

57. Durable- Top 10 Players (Indian) by sales FY 2009-10 India being the second largest growing economy with huge consumer class has resulted in consumer durables as the fastest growing industries in India

58. LG, SAMSUNG the two Korean companies has been maintaining the lead in the industries with LG being leader in almost all the categories. Nokia IndiaLG Electronics India LtdSamsung India ElectronicsSony IndiaPhilips IndiaWhirlpool AppliancesTitan IndustriesSiemensVideocon IndustriesBlue starSource: http://www.naukrihub.com/india/consumer-durables/companies-list/top-players

59. LG Electronics

60. LG Global Presence