Understanding the Consumer Durables Industry in India 2025

The consumer durables industry in India can be broadly categorized into two main segments: major appliances and small domestic appliances. Let’s delve deeper into each of these categories.

Major Appliances (White Goods)

These include essential household items such as washing machines, televisions, refrigerators, and air conditioners. Often referred to as white goods, these products are indispensable in modern homes and play a crucial role in day-to-day living.

Small Domestic Appliances

This segment encompasses a variety of kitchen and cooking appliances like mixer grinders, cookers, ovens, and toasters. Additionally, it includes household electrical appliances such as fans, lights, cables, wires, switches, switchgear, water heaters, and other small domestic items like pumps and irons. These appliances, though smaller in size, are integral to maintaining household efficiency and comfort.

Market Growth and Trends

The consumer durables market in India has exhibited remarkable growth from FY18 to FY23, achieving a market size of ₹81.3 lakh crore by FY23. This expansion is expected to continue at a compound annual growth rate (CAGR) of approximately 14% until FY28. Several factors contribute to this surge, including increased rural consumption, shorter replacement cycles, and enhanced retail penetration.

Key drivers influencing consumer buying behavior include:

• Changing Preferences and Lifestyles: As consumers’ lifestyles evolve, there is a greater demand for products that offer convenience, comfort, and energy efficiency.
• Rising Disposable Incomes: With more disposable income at hand, consumers are more inclined to invest in durable goods.
• Availability of Easy Financing: The availability of financing options and attractive discounts makes purchasing these products more feasible for a broader audience.
• Government Initiatives: The Indian government’s support through the Production Linked Incentive (PLI) scheme and campaigns like ‘Make in India’ has significantly boosted the manufacturing and consumption of home appliances. Programs such as the Bureau of Energy Efficiency (BEE) star rating further encourage the production of energy-efficient appliances.

Financial Performance and Market Dynamics

As of June 2024, the overall market capitalization of major consumer durable companies stood at ₹71.53 lakh crore. Although the financial performance from FY23 to FY24 did not show substantial growth across all metrics, some companies like LFB Industries and Eureka Forbes reported impressive profit increases.

Several domestic appliance companies experienced negative profit growth. However, stable raw material prices and improved operating leverage contributed to better margins. For instance, the prices of key input materials like copper and aluminum saw significant corrections in the post-pandemic period, aiding in cost management.

Also Read: India’s Construction Material Sector

Future Outlook

The future of the consumer durables market in India looks promising, driven by several factors:

• Low Ownership Rates in Rural Areas: The relatively low penetration of essential appliances like air conditioners, washing machines, and personal computers in rural areas indicates a vast untapped market.
• Product Upgrades and Replacement Cycles: Consumers are increasingly shifting from feature phones to smartphones, standard TVs to smart TVs, and semi-automatic to fully automatic washing machines, spurring demand for upgraded products.
• Resilience of the Durable Goods Sector: Supported by factors such as low ticket prices, the work-from-home trend, rising temperatures, and reduced spending on non-essential items, the durable goods sector shows high resilience.
• Emphasis on Premium Quality: There is a noticeable trend towards premium brands, particularly in categories like refrigerators, room air conditioners (RACs), and fans. Premium brands continue to capture market share due to their superior quality and features.

Conclusion

The consumer durables industry in India is poised for significant growth, driven by economic expansion, rising incomes, and changing consumer behaviors. With the support of government initiatives and a stable market environment, the future looks bright for this sector. Companies that focus on innovation, energy efficiency, and catering to the evolving needs of consumers are likely to thrive in this dynamic market.