Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Large kitchen appliances; Small electrical appliances
Executive summary
Double digit growth continues
In comparison with 2004, the domestic electrical appliances industry in India
grew at a slightly lower pace but still continued to witness healthy
double-digit value and volume growth. Large cooking appliances, microwaves and
irons generated most of the value growth. There was also a slow polarisation
of the industry with high-end products becoming more expensive and entry-level
products witnessing a commoditisation.
Large cooking appliances, air treatment products and refrigeration appliances characterise the industry
Large cooking appliances, air treatment products and refrigeration appliances
accounted for two thirds of value sales in 2005. With the exception of lower
growth in the fairly mature refrigeration appliances range as a result of
price discounting caused by intense competition, air treatment products and
large cooking appliances registered double-digit value growth due to the
launch of premium product lines and feature-rich models.
New launches and innovation fuel growth
Detergent-free washing machines, freestanding cooker hoods and microwaves
helped drive growth as manufacturers targeted the premium end of the industry.
Up to eight microwaves were launched in 2005 with LG Electronics India Pvt.
Ltd. taking the lead. As Indian consumers became more sophisticated in their
buying habits, companies were forced to bring in the latest products, designs
and innovations to meet demand. Also interesting were the LPG-based and
halogen heaters within the heating appliances range as LPG- bases heaters
helped marketers to further expand their market into villages and smaller
towns as well where electricity is still not frequently available.
No demand as yet for built-in electrical appliances
Demand for built-in electrical appliances remains undeveloped. Expensive
products, lack of product awareness and the limitations in both available
space and the constraints regarding the construction of Indian homes stifled
growth. With the exception of premium-priced large kitchen appliances such as
built-in cookers, built-in hobs and built-in cooker hoods, the built-in
electrical appliances range was not found in the country.
Modernising of the industry
Haier Appliances (India) Private Limited is a wholly owned subsidiary of the
Haier Group. Haier India was launched in India in December 2003 and by August
2004 had an all-India promotion launched with over 55 products across six
product categories -- refrigerators, colour television, DVDs, washing
machines, microwaves and dishwashers. Haier also launched its range of mobile
phones in India. The promotion campaign launched by Haier Appliances (India)
Private Ltd. was one of its own kind in which mainly targeted the urban and
semi urban middle class population in India. Later on companies like LG
Electronics India Pvt. Ltd. India Ltd and Samsung India also launched similar
campaign giving the electronics advertising a modern look. Overall advent of
specialised retail stores like Vivek' s and Pai also helped the cause of
electric appliances marketers. All this gave Indian domestic electric
appliances market a modern twist which was missing previously.
Videocon acquires Electrolux
Another significant event was Videocon Appliance' s acquisition of the entire
(92%) shareholding of AB Electrolux (ABE) in its loss-making Indian
subsidiary, Electrolux Kelvinator (EKL). In addition to gaining control of
EKL' s three facilities in India, Videocon, under a separate licence agreement
with ABE, will distribute/market products under the Electrolux, Kelvinator and
Allwyn brands in India and other SAARC countries. This deal reflects the
consolidation trend apparent in the Indian domestic electrical appliances
industry.
Domestic companies still favoured
Philips, Bajaj and Kenstar are very much the preferred brands in rural as well
as urban areas. Chinese products which were initially a cause for alarm in the
country actually served to catalyse companies into manufacturing affordable
quality products to win back consumers. Chinese brands were fast-movers in low
end product groups such as steam irons, pop-up toasters, table fans, hair
dryers and shavers.
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