About USD 23 billion worth of consumer durable sales in India are expected to have a "digital influence" by 2023 as buyers research online and watch videos before making the purchase, a report by Boston Consulting Group (BCG) and Google India Tuesday said.
About USD 23 billion worth of consumer durable sales in India are expected to have a “digital influence” by 2023 as buyers research online and watch videos before making the purchase, a report by Boston Consulting Group (BCG) and Google India Tuesday said. The report defined a sale as a ‘digitally influenced sale’ if the buyer uses internet during any stage of purchase cycle.
“Today, 28 per cent of consumer durable sales is digitally influenced and this is estimated to reach 63 per cent of total sales, amounting to USD 23 billion by 2023. (About) USD 10 billion of this will be online sale,” it added.
The report, titled ‘Digital Powers Consumer Durables: A USD 23 billion Opportunity by 2023′, projected that the consumer durable industry (products like TVs, ACs, washing machines, refrigerators and small kitchen appliances) could see a 13 per cent growth to reach USD 36 billion by 2023.
The report said that currently, digital influence varies by product categories with it being 33 per cent for high average selling price (ASP) durables like ACs, TVs, washing machines and refrigerators, and 20 per cent for lower ASP products like small appliances, water purifiers and microwaves.
Digital research is increasingly playing an important role in consumers’ decision to buy a product, and a number of digitally-influenced consumers have doubled over the past four years, it added.
“Digitally influenced consumers have increased 5X in tier-II and tier-III cities and digitally influenced women consumers have increased 10X over last 4 years,” it said.
The report pointed out that in the pre-purchase phase, about 80 per cent of digitally-influenced consumers are undecided about their choice of brand when they start their research and spend typically 2-3 weeks on research before making the final purchase.
Search, social media, blogs and online videos are the key sources for online research. The report suggested that nearly two out of three digitally-influenced consumers rate online reviews as a significant influencer in their purchase decisions.
Vikas Agnihotri, country director (sales) at Google India, said while businesses have started to build their digital presence, there is a need to take a holistic approach to digital as the scale of its influence has grown rapidly going well beyond top metro cities.
“Businesses need to create an alwayson digital strategy and create personalised interventions to tap different consumer demographics across all markets to achieve their business goals,” he added.