Growth in Consumer durables demand and ecommerce a good fit; ASSOCHAM reports overall market to grow to INR 52,000 crore by 2015

As per a recent report by ASSOCHAM, the consumer electronics and durables sector in India is expected to grow at a CAGR of about 15 per cent and grow from Rs.34,000 crores  to reach Rs 52,000 crore by 2015 fuelled by rising demand from the Indian middle class as well as growing sales through the online retail format.

The study titled ‘Emerging trends in Consumer Electronics and Durables Industry,’ has been released by The Associated Chamber of Commerce and Industry of India (ASSOCHAM) and focuses on consumer demand and its supporting factors.

DS Rawat, Secretary General, ASSOCHAM

“Demand for consumer electronics and durables is driven by a young demographic population, coupled with rising disposable incomes amid skilled and highly educated workforce,” said Mr D.S. Rawat, secretary general, ASSOCHAM while releasing the findings of the study.

“Besides, low penetration levels, easy availability of finance options, growing prominence of consumer electronics’ retail stores, online retail industry and a robust 400 million plus Indian middle class with a comprehensive rise in level of affluence is also fuelling the demand in this industry,” said Mr Rawat.

As per the study, the global consumer electronics and durables industry is growing at about 10 per cent CAGR and is currently estimated at about Rs 16 lakh crore and is likely to cross Rs 21 lakh crore mark by 2015.

Ranjith Boyanapalli, CEO,

Iamwire interacted with Ranjith Boyanapalli, Founder and CEO of, an eTailer of electronics and consumer durables. Ranjith said, “If you look at the AIDA model of buying (Awareness – Interest – Desire – Action), since the AID are happening increasingly online, there is a growing chance to convert the last stage online too, provided the right price point, delivery time and experience are served. A lot of products such as storage devices and small appliances have become low involvement purchases for a lot of consumers, because of which convenience of shopping from home and getting it delivered saves them effort and time. Also, with product life cycle getting shorter, people are switching to newer gadgets more often than ever.”

As per the report, multi-national companies (MNCs) with superior technology and better quality control account for a market share about 70 per cent of the overall consumer electronics and durables market in India and maintain a strong hold on the urban middle class segment growing at about 12 to 15 per cent. As per the report, the consumer durables and electronics market in rural and semi-urban areas account for about 40 per cent of the overall market and is growing at about 30 per cent CAGR.

Talking about growth in the online retail format, Ranjith, further stated, “Over the past two years, our traffic has grown without much marketing effort which in turn keeps our customer acquisition cost low. Our revenues from the segment have been doubling every 3 months with mobiles, computer accessories and large appliances being the top performers. We expect demand to continue to pour in through this route.”

In a short span of time, eTailers such as Buytheprice, HomeShop18, Flipkart, Infibeam, Indiaplaza, Futurebazaar, etc. along with multi-channel retailers such as Croma Retail, Vijay Sales, etc. have captured a large share of the pie, which keeps getting bigger by the day. The rise in demand from the online format has also prompted original manufacturers to set up their online retail formats such as Samsung.

As per Forrester Research Inc., growth in Indian online retail market is set to be the fastest in Asia-Pacific with total market slated to reach over $8 billion by 2016. The online format has also added additional consumers from Tier-II and III cities thereby increasing the overall demand for such products. Consumers can now research product and category manuals, compare prices as well as hunt for discounts before making a purchase online. The online market for consumer durables and electronics is now moving towards inflection point and maturity and we may see some consolidation happening over the next couple of years.

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One comment

  1. 1

    very detailed analysis. Simultaneously i want to ask that you have written rural and semi urban would have 30 percent CAGR BUT from this deewali rural demand was very poor infact there was degroth from last season. Would that be the trend again for next year.

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