Consumer Electronics Market: The Indian Outlook

By Sudeshna Das



The Indian consumer electronics industry is evolving rapidly with increasing global trend of continuously inspiring excitement and capturing the imagination of consumers with new devices and technologies. For the last ten years, Indian consumers, especially the middle-class segment, have been showing a drastic change in lifestyle and buying preferences with a strong inclination towards consumer electronics products. This, in turn, has driven the global consumer electronics market including the Indian market.

Moreover, rising disposable income coupled with the need for Internet usage has further boosted the demand for smart consumer electronics. Preference for smart homes and smart offices is driving the growth of the industry. High-end products still have a long way to go to acquire a larger industry share in India.

Market opportunities


India has witnessed increasing technology penetration with a strong demand from such application areas as smart offices and smart homes, of which consumer electronics is an integral and important part. Moreover, increased manufacturing cost in China has made India a potential location for consumer electronics manufacturing.

Make in India policy of the government is attracting more investments in the consumer electronics industry. Of the total electronics industry in India, consumer electronics has around 9.5 per cent market share, with major adoption among the middle-income group.

According to Indian Brand Equity Foundation (IBEF) study, the Indian appliance and consumer electronics (ACE) market was at US$ 31.48 billion in 2017, and it is expected to reach US$ 48.37 billion in 2022 at a CAGR of nine per cent (Fig. 1).

Fig. 1: The Indian appliance and consumer electronics market size (Source: IBEF)
Fig. 1: The Indian appliance and consumer electronics market size (Source: IBEF)

The same study also mentions that overall consumer durable exports reached US$ 0.78 billion in 2017. Consumer electronics exports from India reached US$ 451.29 million in 2018-19. Production of consumer durables under Index of Industrial Production has grown 5.5 per cent year-on-year during 2018-19 (Fig. 2).

Fig. 2: Consumer electronics industry production status in India (Source: IBEF)
Fig. 2: Consumer electronics industry production status in India (Source: IBEF)

The TV industry in India was estimated to reach US$ 10.19 billion in 2017, and it now projected to reach US$ 13.31 billion by 2020.

Also, demand for durables like refrigerators and consumer electronics goods is likely to grow in the coming years in rural markets, as the government plans to invest significantly in rural electrification. As of 2018, washing machines, refrigerators and air-conditioners in India were estimated around US$ 1.09 billion, US$ 3.03 billion and US$ 3.1 billion, respectively (Fig. 3).

Fig. 3: White goods market size in India in FY18 (Source: IBEF)
Fig. 3: White goods market size in India in FY18 (Source: IBEF)

The white goods industry in India is highly concentrated. In washing machine and refrigerator segments, top five players have more than 75 per cent market share. Whereas, in air-conditioner and fan segments, it is 55 to 60 per cent. On the other hand, the kitchen appliances segment is fragmented with top five players having 30 to 35 per cent market share.

In urban markets, demand is rising for such products as LED TVs, refrigerators, laptops, split ACs, set-top boxes, beauty and wellness products, among others. Whereas, in rural markets, durables like refrigerators, ACs, electric fans and other appliances are likely to witness a growing demand in the near future. Rural markets have recently witnessed around thirty per cent growth in demand for electronics and home appliances.

Consumer Electronics and Appliances Manufacturers Association (CEAMA) forecasts that the LED/LCD category is expected to grow at around twenty per cent from 2014 to 2020, while refrigerator category at around ten per cent in that period. Air-conditioners would continue to rise between six to seven per cent. Washing machines are expected to grow up to nine per cent during the period. However, set-top boxes would grow the fastest, primarily because of the government’s digitisation of the cable delivery system.

Growing awareness, easier access and changing lifestyles have been the key growth drivers for the consumer market. The government of India’s policies and regulatory frameworks, such as relaxation of licence rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and hundred per cent in single-brand retail, are some of the major growth drivers for the consumer market. According to Department for Promotion of Industry and Internal Trade, during April 2000 to March 2019, FDI inflow into the electronics sector stood at US$ 2.36 billion.

Market mix

The Indian consumer electronics industry can be classified in the following ways:

• By product type
• By pricing model
• By business model
• By distribution model

Classification according to product types is:

  • Visual and audio products

– TVs
– Laptops
– Speakers
– Others (headphones, etc)

  • Major home appliances

– Air-conditioners
– Refrigerators
– Washing machines
– Dish washers
– Others (cooktops, etc)

  • Small home appliances

– Food processors
– Microwave ovens
– Irons
– Others (kettles, etc)

Market scenario of some key consumer electronics products are depicted in the table. According to the pricing model, the Indian consumer electronics market can be classified as:

  • Low-cost products
  • Medium-cost products
  • High-end products (customised or luxury brands)

Moreover, all the above-mentioned categories follow both business-to-business (B2B) and business-to-consumer (B2C) models. Further, with the rise of the e-commerce segment, distribution patterns have also evolved, and these can be classified as:

  • Online distribution channels
  • Offline distribution channels

Emerging trends

Technological innovations to improve people’s lives and to enhance their capabilities are the key drivers of the consumer electronics market. Here is a sneak-peek of the emerging trends that are likely to find a foothold and secure their role in the consumer electronics sector, now and in the near future.

Connected products through the Internet of Things (IoT)

Connectivity and communication are becoming ubiquitous in consumer electronics. This, in turn, has enhanced electronics content as well as the need for technology adoption in this sector in all possible manners of shape, size and application.

For example, flat, rigid sensors and chips may not be a viable option for wearable devices that should comfortably conform to the human body. With the broad and ever-expanding spectrum of smart devices, breakthrough manufacturing technologies must continue to be explored, tested and implemented.

Batteries with enhanced energy storage

Improved battery life is one of the most important deciding factors among consumers. Technological innovations have been continually offering more and more powerful battery technology. Thus, higher energy density batteries will be critical to enabling the kinds of products that deliver the performance consumers want. Although, a significant amount of work has already been done to improve battery technology, many challenges still remain unsolved.

Miniaturisation of devices

With each new generation of devices, consumers expect to receive more and more features in the same size or smaller package along with enhanced quality or safety. This creates a serious need for device and component miniaturisation by pushing the limits of technology—specifically, miniaturisation of next-generation electronic components and systems.

New manufacturing technologies will need to be developed for miniaturised components, including equipment and systems for micro-level automated assembly, micro-sensors and micro-scale electrical connections. Particularly critical will be developing new micro-level assembly techniques and increasing the efficiency of existing techniques.

Flexible and printed electronics

Flexible and printed electronics offer flexible circuitry that enables manufacturers to create consumer electronics products with unconventional functionality and design. Displays, sensors and printed memory can be bent, wrapped, rolled and stretched out to a great extent, resulting in reduction of cost, weight and power consumption of electronic devices.

Further applications are also possible for product development cycle optimisation with the advent of technology.

3D and 4D printing

3D printing or additive manufacturing has widespread useful applications in the consumer electronics industry, especially in the printing of electronic circuits. The ability to print circuitry offers immense flexibility in designing innovative electronic devices, but technical challenges of joining conductive materials to 3D-printed circuit materials must be addressed to explore the full potential of this technology in the consumer electronics sector.

A more advanced technology, 4D printing involves using smart or shape-memory materials to print objects that can self-assemble into multiple configurations. This technology is still in the nascent stage but poses enormous potential to revolutionise the consumer electronics sector.

Moving forward

The consumer electronics market is always flooded with latest technologies and innovations. However, product lifecycle is quite short, as consumer interests change fast. Thus, many technologies and innovations often end up disappearing within a short span of time. The dividing line between maturing the technology for widespread use and its obsolescence due to new technology introduction is razor-thin. Thus, speed in manufacturing and launching the products is critical in this sector.

In addition, delivering innovative products that are smaller, faster, more durable, more affordable and have a better battery life, as per ever-increasing consumer demands, can only be achieved through successful adoption of innovative technologies and use of innovative materials. Thus, a continuous focus on R&D is also must to achieve a competitive edge.

Considering the importance of environmental issues, the consumer electronics segment needs to focus more and more on electronic waste (e-waste) management. India produces two million tonnes of e-waste every year, but no proper guidelines are available from the government’s side. Majority of brands operating in India do not have a tangible extended producer responsibility (EPR) in place for taking back or managing their end-of-life waste electronics and electrical equipment (WEEE).

In some cases, though a take-back system is present but that is not functional. Most OEMs do not provide adequate information on their website about any take-back or recycling programme.

Moreover, India being a vast country, setting up collection mechanisms is a big challenge.
Another major issue in e-waste management in India is how to include thousands of producers and importers under the ambit of regulation.

However, industry cooperation with correct intervention from the government can help the industry manage the e-waste menace. India being highly-deficient in precious mineral resources, there is a need for a well-designed, robust and regulated e-waste recovery regime, which would generate employment, revenue as well as support sustainable development of the consumer electronics sector in the country.

Sudeshna Das is director at ComConnect Consulting

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