Indian consumer durable industry to hit $36 billion by 2023
A number of conducive factors are set to drive growth in India’s consumer market, while the purchasing process itself is now subject to the ‘digital influence’. This is according to new collaborative analysis from the Boston Consulting Group (BCG) and Google, which forecasts mammoth growth over the next four years.
Much has been written about the Indian consumer market in recent years, for reasons that are increasingly evident. The country’s sizeable population has always been an eye-watering prospect for businesses across the globe, and overall economic prosperity levels are now drawing up to a level where consumer spending is commonplace.
India’s economy is growing at unprecedented levels, which has seen the rise of an urban middle class with significant repositories of disposable income. Increased gravitation towards urban centres has also created central marketplaces to sell goods and services, for as long as the physical marketplace remains relevant.
While the online retail market has been soaring across the world, and in India, the percentage of the Indian population that shops online is relatively low. Last year’s iteration of Google and BCG’s report on the Indian consumer market revealed that only 20% of the Indian population was engaged in online retail and e-commerce.
Nevertheless, the finding is not void of indications for future growth. Roughly 850 million people in India are expected to be active online by 2025, indicating a substantial opportunity for the online retail segment. Last year’s levels of 20% already represented sizeable increases from previous years.
This year’s analysis from Google and BCG finds that while the share of purchase itself might not be conducted online, the internet most certainly plays a large role in India’s consumer market today. The report uses the term ‘digital influence’ to describe any online activity that might occur in the build up to a purchase.
Be it researching products, comparing various brands online or managing finances, a large share of Indian consumers are engaged online in the lead up to a purchase, although this is subject to demographic variations. For instance, nearly 30% of urban consumers in India are currently digitally influenced, which is not likely to be the same in rural areas.
Meanwhile in tier 2 cities, digital influence is growing substantially, having increased by five times in the last year. The report also finds women to be more subject to digital influence than men, given that the number of digitally influenced women has grown tenfold over the last year.
By 2023, BCG and Google expect the share of digitally influenced consumers across demographic segments to surpass the 50% mark. For the same period, the analysts expect the consumer durables sector in India to reach as staggering value of $36 billion.
The report attributes this growth to a number of factors, including “low product penetration, rising disposable income, increasing urbanization, easy access to credit & Government’s thrust on electrification.” $10 billion of these purchases are likely to come in the online sphere.
As per the report, the online market place is also growing multidimensionally. “Other than providing reviews and recommendations; buyers typically engage in other post purchase activities such as seeking information on installation & use, availing warranty services, downloading the brand’s app & searching for more/ similar offerings from the same brand,” says the report.
