Switching to convenience

Home appliance brands launch tech-enabled products as market expands

e-bicycles, electric bicycles, Hero Cycles, Avon Cycles, CRISIL, Bicycle market in India, premium bicycle, e-cycles
e-bicycles, electric bicycles, Hero Cycles, Avon Cycles, CRISIL, Bicycle market in India, premium bicycle, e-cycles

The home appliances segment is witnessing growth as consumers increasingly invest in products that offer convenience. According to data from EY, in FY21, the home appliances segment, which includes refrigerators, air purifiers, air conditioners and washing machines, stood at Rs 90,950 crore, an increase from Rs 81,108 crore in FY20. It is expected to grow by 15% in the next five years. The kitchen appliances segment was worth Rs 14,000 crore in FY21 — an increase from Rs 12,412 crore in FY20 — and is expected to grow by 13% in the next five years.

Since the pandemic, the interest in automated products has grown. Companies like Orpat, Livpure and LG are focussing on tech-driven solutions to tap into this demand.

Getting smarter

Orpat saw its home and kitchen appliances segment grow by 20% in FY21, in comparison to FY20. The company launched its direct-to-consumer (D2C) platform in July 2020. While that is yet to take off, in FY21, its revenue from online marketplaces rose by 40%, in comparison to pre-pandemic times. Nevil Patel, director, Orpat Group, says the company wants to expand its offline presence in the South — by adding 150 more distributors by the year end to its current network of 500.

Despite the 7-10% rise in prices across its product range, owing to the hike in raw material prices, Orpat expects that the share of home appliances in its overall business will increase from the current 25% to 40-45% in the coming few years. “This will be due to new product launches and demand for automated products,” Patel says. This year, Orpat launched two new products: a money-saver smart fan and a mixer grinder.

Livpure, meanwhile, is remodelling its brand identity. Pritesh Talwar, its CEO, says the goal is to become a “tech-driven business”. Towards this, Livpure plans to launch app-enabled smart water purifiers in both economical and premium categories.

For Usha International, sales from the online channel almost doubled in June 2021, compared to a year ago, with online sales from tier III and IV cities seeing an upsurge. “We are strengthening our digital reach to more towns and pin codes,” says Saurabh Baishakhia, president – appliances, Usha International. The company plans to launch a marketing campaign and build on its supply chain network to boost sales further.

Growth outlook

Convenience-based home appliances have been a boon to time-strapped customers during the pandemic. “People want to automate their daily chores as much as possible; it has now become a necessity,” says Natasha Trikha, analyst – industry research, Care Ratings.

Traditionally, home appliance brands have depended on offline stores for sales. While many of them quickly took the online route as the pandemic hit, via e-commerce and D2C, sales for several others took a beating. “Except for large players like Sony and Samsung, home appliance brands are still not big enough in terms of revenue and balance sheets to be able to drive volumes through their own websites,” says Angshuman Bhattacharya, strategy and operations partner, EY India. While the next phase of growth is expected to come from tier II and III cities as the reach of e-commerce hastens, 70-80% of the sales will come from the offline channel, he adds.

Amid price rise concerns, which is a function of factors such as freight rates, raw material and import costs, the industry is looking for alternatives. Karan Chechi, director, TechSci Research, says, “Due to disruption in imports from China, which is a major manufacturer of home appliance components, companies are shifting their manufacturing units to other markets such as Vietnam.”

Follow us on TwitterInstagramLinkedIn, Facebook

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 16-08-2021 at 06:50 IST