Trends that will drive consumer durables market in 2021
December 23, 2020 8:00 AM
According to an industry report, the home appliances and consumer electronics industry, (excluding mobile handsets), is expected to reach Rs 1.5 lakh crore by 2025, from the present Rs 1 lakh crore
The industry is required to keep a close watch on evolving consumer needs, to drive product innovation and truly thrive in the post-pandemic world.
By Pradeep Bakshi
While 2020 was challenged by the pandemic, it also opened doors for opportunities and innovation for the consumer durables industry. The first few months of lockdown were challenging for many, but the latter half of the year proved to be beneficial for those who adapted to the evolving market realities. With the gradual unlocking, new demand trends and subsequent product innovations began to emerge. Consumer centricity took centre stage as the white goods industry came up with new technologies for purification and sanitisation, that are sought after in the new normal.
Despite the temporary interruptions earlier this year, it is safe to say that the consumer durables industry is on the path of growth from a long-term perspective. According to an industry report, the home appliances and consumer electronics industry, (excluding mobile handsets), is expected to reach Rs 1.5 lakh crore by 2025, from the present Rs 1 lakh crore. Rural electrification, more stable disposable incomes, work from home policies, and the government’s plans to offer production-linked incentives to establish manufacturing plants in India are expected to be the likely drivers for the growth of the industry. With such a massive growth opportunity, the industry is required to keep a close watch on evolving consumer needs, to drive product innovation and truly thrive in the post-pandemic world.
Here are the trends likely to be witnessed in 2021:
The need for innovating healthcare features within products:
The pandemic has led individuals to focus on their health and safety first. That said, consumers are expected to be drawn to products that incorporate health related functionalities. Products with features such as anti-bacterial filters, UV solutions that eliminate viruses, disinfectant properties etc. have been gaining traction and are expected to continue well post Covid-19. The white good brands have already started to re-invent the wheels and include health specific innovations within their products.
Rising need for automation within products:
During the lockdown, most people took up the responsibility of managing daily household chores. There is a significant increase in the amount of time spent on household chores, eating into precious time that can rather be spent with family, or on self-development and professional activities.
In the ‘new normal’, consumers will likely invest in automated, technologically superior products to ease their lives. Convenience led product categories such as washing machines, microwaves, vacuum cleaners and dishwashers will see a spike as people aim to become more self-reliant. Additionally, the latest developments in the area of technology have made modern dishwashers and washing machines more hygienic, convenient and efficient. People are also looking at more storage in the domestic refrigerator segment, and products like refrigerators and deep freezers, with better food preservation capabilities, will continue to gain more momentum. All these factors will help these product categories gain more popularity in India in the coming years, just like they have already done in the other parts of the world.
We also believe that the cooling and comfort products like air conditioners, air coolers and air purifiers will grow within the same households, since people would need cooling in multiple rooms, as they continue to work from home. Having said that, the consumer will have an eye on energy efficient products, since more and more appliances will be used at home, and home is where the action will peak for some time.
Affordability to play a major role:
The pandemic also led to job losses and pay cuts across industries and companies. Many individuals have suffered and some continue to suffer due to the same. Brands therefore, will have to focus on cost innovation within their R&D plans, to develop products that offer quality at an affordable price. In 2021, we expect consumers to continue to look at value for money products, which are need based, and not necessarily aspirational and niche; without sacrificing quality as a key aspect.
Homegrown products to gain traction:
The government has been encouraging to Make in India, and it is expected that this movement will continue to gain further momentum. Indian brands should be self-reliant for the future, since consumers too have shown an affinity towards homegrown products.
Online vs offline to still hold true:
Social distancing caused the buying process to move online. The whole consumer buying process will continue to evolve, as consumers make greater use of internet, social media, online search and ecommerce touchpoints, leading to digitisation of the consumer decision making journey. However, despite the increasing focus on going digital, there will always remain the need for touch and feel, when it comes to white goods. This is why the offline experience will remain the most important factor in decision making when it comes to consumer durables. Considering the same, retailers and dealers did witness a spike in footfalls, for a variety of products as the lockdown norms eased. Hence, in 2021, while brands should focus in building their digital presence, there remains a need to strike a balance in the growth of their offline and online presence. An Omni channel ecosystem is emerging in the real sense, and not merely academic.
While everybody wishes for 2021 to usher in good news regarding the pandemic, the need to remain safe, healthy and self- reliant will continue to prevail. Consequently, consumer durables players too are reassessing their business strategies through new product development, consumer centricity and digitisation, to be able to ensure comfort and convenience for their consumers.