India is undergoing a major change in its economic environment and is growing fast. Indian major home appliance market is driven by an increase in the use of online sales, electrification of rural areas, rising disposable incomes, and easy access to the credit. The Make in India Program and the upcoming national policy for electronics (NPE) will further bring about major policy changes for the large appliance industry. There is a rise in the ease of doing business in the market which can escalate the production and consumption in the market further.

There is a huge amount of FDI in the large home appliance sector. Various companies such as Germany’s Bosch, Siemens, Turkey’s Arcelik, and domestic brands such as Godrej and BPL are planning to invest in manufacturing and use backward integration methods.

Shanghai Hitachi, a joint venture between Hitachi Japan and Shanghai is also expanding compressor units in Gujarat. Factors such as high manufacturing costs, high-interest rates of loans from the bank, and Goods and Services Tax on major home appliances purchase might restrain the growth of the market. While a rise in customs duty to reduce carbon emission from appliances likely drive the large home appliance production in country.

Key Market Trends

Rise in Production of Major White Goods in India

The Indian major appliance market has witnessed an increase in the production of white goods such as refrigerators, washing machines, and air conditioners. Production of refrigerators in India increased 3% y-o-y in the year 2018 to 11.88 million units. Production of washing appliances in India increased by 5.1 % year-on-year in the year 2018 to 5.79 million units. During the year 2018,(up to February 2018) production of air conditioners in India increased 4.9 % y-o-y to 3.19 million units. The white goods industry is highly concentrated in India with the top five players having more than 70% of market share. Xiaomi, a China-based start-up company entered the white goods segment in India in 2019.

Penetration of major home appliances is expected to rise

India is a complex market when it comes to selling of household consumer appliances. As compared to various neighboring countries there is low penetration of air conditioners, refrigerators, and washing machines in the country. The penetration of refrigerators is pretty low at around 33%, the penetration rate of air conditioner stands at 4.50%, and washing machines at 13%. A television, on the other hand, has high penetration in the Indian market.

Competitive Landscape

Indian major home appliance market is moderately concentrated in nature. The white home appliance market is concentrated with 5 major players occupying the market. However, the kitchen appliances market is fragmented in nature. Haier group holds fifth positions in the market and is aiming to get in the top three places in the market.

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