Consumer electronics industry in India is on a high-growth trajectory and fortunately there are lot more opportunities to be explored in the future. In the recent years the industry seems to have sizably benefited from retail boom, growing purchasing parity among consumers and several finance schemes. Expensive items are flying of shelves in metropolitan cities and low-ticket items are selling solidly in tier-2 and tier-3 cities. Innovation is the new catchphrase in the Indian electronic landscape and it is reaching people through consumer electronics, Blu-ray and full high definition are some of the revolutionary technologies that have being liked by the masses.
It is being predicted that consumer electronics industry would grow at a rate of 10 percent. And the new excise duty structures would trigger off wider interest in consumer electronic items.
In fact products which are in demand in India have low penetration level or are emerging in category life-cycle. The most selling electronic items in India are colour TVs and refrigerators, but growth is mostly visible in LCD TVs and high-end electronic items like refrigerators, microwave ovens, and front-loading washing machines. Also, demand for DVD players is pretty high because of availability of cheap software.
Slowly and gradually people in India seems to be showing clear preference for quality products. Certainly, unbranded market will have its share of pie with the growth being witnessed in the entry level products and categories. However, the demand for higher-end products will keep growing in India. To put it precisely, high-end television sets and washing machines will witness exponential growth in the coming years.
According to Satish Kaura, chairman and managing director of Samtel, the TV industry in India today stands at 13 million units for CRT TVs, this does not include Tamil Nadu’s demand for 35.6cm CTVs which the Tamil Nadu government gifts it to people living below the poverty line and around 7,00,000 units of LCDs. The demand for LCDs will reportedly touch one million in 2009.
The 4 percent cut in excise duties, modern retail distribution, 7 percent GDP growth and the demand for flat and slim category will further trigger growth in this sector. Furthermore, TV manufacturers will be concentrating on outsourcing rather than the manufacturing on their own. Large companies are now planning to shift their production to original equipments manufacturers.
If we go by the words of another industry expert, the meltdown has affected consumers, making them think twice before they part with their hard-earned cash. However, he is quite optimistic about the Indian market considering the volume of electronics consumption in the country is pretty high. In India, there is a large demand for better energy management, improved healthcare and energy consumption will lead to growth in the market, despite the meltdown.
With rising demand for better healthcare services, the demand for medical electronic instruments is also growing. Moreover, ageing population and need for economical healthcare has also triggered numerous innovations in healthcare and medical diagnostics. There is also growing demand for medical electronic products in the area of biometrics, blood-pressure monitoring, blood analysis, as well as for geriatric products.
Apart from this, there is a growing consensus among several nations and people for energy conservation and preserving the environment for Gennext. That apart, opportunities that lie at the bottom of the pyramid could also be explored. R&D centers of semi-conductor companies are focusing on rural markets and accordingly are coming up with low-cost designs. In India the demand for electronic goods will rise in the segments of telecom, automotive, solar/PV sector, industrial and consumer sectors.
In 2005, India’s electronic consumption was around 1.8 percent. This is likely to touch 5.5 percent in 2010. According to a study conducted by ISA and Frost Sullivan, India’s semi-conductor market will grow by 2.5 times. The prominent end-user products of semi-conductor would include mobile handsets, desktop and notebooks PCs, etc.
The industry will continue with its growth momentum, but only by adopting new technological products that give high performance at economical rates.
In case of imaging products, Canon is doing tremendous business in India. India is considered to be world’s largest market for digital cameras. In 2008, Canon clocked a growth rate of over 35 percent. The sales of camera products recorded a growth rate of 40 percent. The digital SLR category witnessed 70 percent growth. According to Shunichi Senda, director-ICP, Canon India, digital cameras have taken over the marketplace, as more than 75 percent of the cameras sold today are digital and digital images will constitute 90 percent of all professionally taken photographs by 2010.
In computing segment, netbooks will be preferred over PCs. According Sameer Gadre, Country Manager, Dell India, net books having long battery life and less energy usage will be preferred. Performance and personality would be the twin factors guiding this industry.
Road Ahead
First thing First. To accelerate growth in this segment, industry experts suggest reduction in sales tax from 12.5 percent to 4 percent. The Indian rural market is still safe and yet to be touched by the effects of slowdown. TV manufacturers should focus on rural markets if they intend to arrest the slowdown. Secondly, India should go global and produce goods both for the developed and emerging markets. Thirdly, in the future, energy-efficient goods would be highly in demand. So India should be prepared to meet the demands for energy efficient products. Last but not the least; the country should manufacture products that appeal to the rural and bottom-of-the-pyramid segments.
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