New Delhi: After the vast success of INR 13,500 Crore domestic mobile handset industry in the country, now it’s the time for domestic home-grown consumer electronics brands to reap the harvest. Over 15 CE brands are set to race in the fastest growing LED TV industry in India. Homegrown consumer durable brands are back in action as industry demand for durables like LED TV, AC & refrigerators are likely to witness growing demand in the coming years in the rural markets as the government plans to invest significantly in rural electrification.
The Consumer durables market in India reached Rs 1 trillion (US$ 15.45 billion) in 2018. The industry is expected to grow at 13 per cent CAGR and reach Rs 3 trillion (US$ 46.54 billion) by 2020. Urban markets account for the major share (65 per cent) of total revenues in the consumer durables sector in India.
There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as penetration of domestic and affordable brands is growing. An increased aspiration for better lifestyles has been the key growth drivers for the consumer market.
According to Nirav Patel, the founder of one of such homegrown brand Abaj Electronics, “We are largely known for our presence in LED TVs Market. Within a short span of time, Abaj has become a household name in regional belts of Gujarat, Maharashtra, Madhya Pradesh, Rajasthan and some part of Uttar Pradesh.”
He further added, “Encouraged by our growth and to further capitalize our popularity now we are planning to strengthen our portfolio by introducing air conditioners for consumers who look forward to pocket-friendly electronic items for their home and office.”
He added “We are well-positioned to tap this market with our Air Conditioners range. The products will be initially available across 8 states Gujarat, Maharashtra, Punjab, Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Rajasthan and Tamil Nadu. Further, we will be expanding operations in other non-metro cities like Karnataka, Andhra Pradesh, Maharashtra, Bihar, Jharkhand, Greater Punjab and NCR.
Stating about this shift and increasing popularity of homegrown consumer electronic brands, the Rural Branding Expert Vivek Sood said, “The Rural Bharat has given birth to a new consumer category which so far was missing in the pyramid. This new emerging consumer class is ambitious and with a desire to adopt a comfortable lifestyle; however, the spending power is a major constraint which holds them to go for any MNC brand instead they look for an option which is affordable and trustworthy.
“The another reason which could impetus the homegrown brand especially in two segments i.e. TV and washing Machine is getting standard quality in the affordable range. A large number of rural household are still doing with B&W and CRT TVs’ which itself is a huge market for home-grown brands to enter. While the urbanization and changing lifestyle have prompted even the village home to switch over to a semi-automatic washing machine which is available as low as 5000,” further added Sood.
One of the key factors contributing to the growth of homegrown brands is their deep cut pricing strategies which have also forced the MNC brands to bring down the prices. A consumer was getting an LCD TV of 32 inches for INR 25,000 in 2009-10 today easily gets a sleek LED or a smart TV in less than INR 15,000.
Besides, the price war and fight for rural share, another area where the homegrown brand is scoring is retaining and acquiring the talent. Due to high overheads and low margins, the MNC brands are on cost-cutting side which also affected the manpower at large.
Shyam Acharya who recently moved to Abaj Group after a stint of 22 years in top brands Like Videocon and Akai stated that” professionals like me are excited to join well-respected teams and have the opportunity to take the brand to the next phase of growth. In a debut brand, you see results in front of you—numbers, revenues. In an MNC, you learn the ropes. I wanted my work to matter and give satisfaction. I look forward to making Abaj first choice for a value-seeking Indian customer. India has many domestic ventures that have potential to grow exponentially but lack the right leadership strategies. After working with various MNCs, the experience is worth using for our own business.
“We can imagine our progress rate if world acknowledged business strategies applied to our kind of potential, the results are bound to be extraordinarily great.” added Acharya.