New Delhi [India], November 29 : The Indian families are getting smaller as separate households rise, and this in turn is fuelling the demand for consumer durable products in the country, highlighted a report by Nuvama.
The report highlighted that the shrinking size of Indian households has led to an increase in the number of families, which is driving the consumption of home appliances and other durable goods.
"With families getting smaller, the number of households is on the rise in Indiavisible in the reduction of the average household size. This, in turn, is fuelling consumption of all household consumer durables products," said the report
The report emphasized that the penetration of consumer durables, such as refrigerators and air conditioners, remains low in India compared to developed countries. However, the growing number of households, coupled with rising affluence and changing lifestyles, is boosting the demand for these products.
It also added "India's consumer durables sector, currently contributing 0.6 per cent to GDP, is projected to grow 11 per cent annually to Rs 3tn by FY29".
Despite the challenges posed by the pandemic, the domestic market for consumer durables grew 10% annually between FY19 and FY24. Factors such as premiumisation, increased household penetration, and shorter replacement cycles have played a significant role in this growth.
The report also stated that technological innovation has also contributed to the rising demand for smart and energy-efficient appliances.
It said "the replacement cycle for televisions has contracted significantly, decreasing from 9-10 years in 2014 to 6- 8 years in 2023"
The report noted that consumers are now opting for larger display sizes, automated appliances, and gadgets that enhance convenience and connectivity in their homes.
A surge in loans sanctioned for consumer durables, which grew from Rs 740 billion in FY20 to Rs 1,165 billion in FY23 is also fuelling the demand.
A substantial 55 per cent of this growth is attributed to high-value products priced above Rs 25,000. These products, which accounted for 15-20 per cent of industry sales in 2018-19, now make up 45 per cent of sales in 2023.
The report highlighted that the tier-1 and tier-2 cities are leading this demand due to higher incomes, reliable electricity and water supply, and faster replacement cycles. Within these regions, the National Capital Region (NCR) stands out as the largest market for consumer durables, contributing 5-5.5 per cent of total pan-India sales in FY22.
With these trends, India's consumer durables market is poised for significant growth in the coming years.
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