Tuesday, May 15, 2012: 09:00:08 PM

TRENDS

The Right Choice

Anirudh Dhoot talks about the changing behaviour trends of the Indian consumer in the consumer durable sector

The consumer durables industry can be broadly classified into two segments: consumer electronics and consumer appliances. Consumer appliances are further categorised into brown goods and white goods. The industry, which is pegged at around `35,000 cr, has been growing at more than 15 percent. In the last few years, the industry has experienced substantial changes due to greater affordability, changing lifestyle and boom in sectors like housing and real estate, as well as the evolution in commercial advertising.

There are several factors that have led to a change in consumer behaviour. The most prominent among these are as follows:

Emergence of Organised Retail in Consumer Durable Industry
Consumers today are selective about the quality of products and services offered to them. They are well-read and aware of the continual changes around them. This awareness has made the Indian consumers seek reliable sources for purchases such as organised retail chains. Indian consumers are now more discerning, and are knowledgeable about technology, products and the market, and are beginning to ask for benefits beyond just availability of a range of products that came from renowned manufacturers.

Increase in Marketing Spend by Brands
The increase in innovative marketing strategies has clearly caught the attention of consumers. They keep a keen watch on various activities and advertising mediums. There has been a clear increase in marketing budgets and spends across consumer durables brands. In other words, the marketing game has become a vital factor for driving sales as against the manufacturing process of products in the past. Players are now concentrating on the creation of brand image in order to economise their scale of operations and to increase their brand strength. The advertising expenses of companies operating in this segment are going up every year and the returns are diminishing, yet investing in creating a brand image will play a major role in selling of the product.



Celebrity Influence
Celebrities play a great influence on the minds of consumers, especially cricketers after the recent World Cup win and now the IPL. Most brands are cashing in on this. Celebrities definitely lend personality to the products they endorse. What they do, is regularly monitored by consumers, thereby increasing the eyeballs to the brands they endorse. This trend is evident across sections of the society, in urban as well as rural India. This tremendously increases the brand recall as well as the brand perception in the minds of consumers.

Emergence of Energy Saver Products
With the increase in awareness of global warming, consumers are getting more and more conscious about the energy efficiency of the products they use. Consumers in India are taking lead in prompting manufacturers to adopt technologies to produce ecofriendly products. There is an increase in consumers preference towards environmentally responsible products. Consumers infact, demand such products.

Rural Penetration
According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM) reports, Indiaís rural consumer durable market will witness an annual growth of 40 percent in the next fiscal 2011ñ12, as against the current growth rate of 30 percent, owing to the change in lifestyle and higher disposable income of rural India. The report further states that around 35 percent of the total sales of consumer durable items come from rural and semi-urban markets, which will grow by 40ñ45 percent in the near future.



Availability of Financing Schemes
The rise in availability of credit and loan facilities has increased the purchasing power of consumers. Consumers are increasingly making purchases based, more on the availablility of lucrative schemes, rather than as per their particular needs. Today, the sale of a particular product is determined by the cost of credit.

Peer Pressure
The ëme tooí attitude in consumers is on the rise, like never before. This is fairly common among the youth and the younger generation in India.

Globalisation
Consumers are well-travelled and well-informed about global trends. The internet has been an important catalyst in this process, disseminating enormous amount of information about products and services. Social media platforms are a lucrative platform for consumer durable retailers to brand and market their products.

The Budget and the Industry
The last quarter of 2011 was not favourable for the consumer durables industry due to factors like inflation, petroleum prices and depreciation of rupee against the dollar. Due to these factors, the consumer durables industry was forced to implement a hike of 5ñ10 percent in prices of various products. Relief, in terms of taxation, is needed to support the growth of this sector. 

Anirudh Dhoot is Director – Videocon and President of CEAMA


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