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Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies
Business, Equities, Expert Views, Investor Forum, Market News, Markets - October 9, 2024

Consumer Durables Set for 11% CAGR, to Hit ₹3 Lakh Cr by 2029

Consumer Durables Set for 11% CAGR, to Hit ₹3 Lakh Cr by 2029

India’s consumer durables sector is poised for substantial growth, with a projected compound annual growth rate (CAGR) of 11%, expected to reach ₹3 lakh crore by 2029, according to a report by EY Parthenon and the Confederation of Indian Industry (CII). Currently contributing 0.6% to India’s GDP, the sector is anticipated to significantly increase its contribution as it benefits from rising domestic consumption, a shift towards indigenization, and a growing focus on sustainability.

Growth Trajectory and Key Drivers
EY Parthenon’s report highlights the sector’s ambitious target to become the fourth-largest global market for consumer durables by 2027. By 2030, India could emerge as a global leader in the sector, creating an estimated 5 lakh new jobs. The expanding domestic market, particularly driven by urbanization, rising incomes, and changing lifestyles, presents a unique opportunity for manufacturers to ramp up production and innovation.

Angshuman Bhattacharya, partner and national leader for consumer products and retail at EY Parthenon, emphasized that India’s growing consumer base and favorable government policies are laying the foundation for this transformation. “Progressive government initiatives like Atmanirbhar Bharat, Make in India, and the Production Linked Incentive (PLI) scheme are creating a favorable environment for the sector’s growth,” Bhattacharya noted. He stressed that leveraging emerging opportunities, enhancing value chain integration, and addressing current challenges will be key for the sector to become a cornerstone of India’s economic growth.

Premiumization and Technology Adoption
One of the core trends driving growth in India’s consumer durables market is the shift towards premium and value-added products. Consumers are increasingly spending on discretionary items, prioritizing household upgrades and adopting smart, energy-efficient products that offer greater convenience and sustainability. Notably, air conditioners (ACs), once considered a luxury, have become a necessity for a broader segment of the population, reflecting a shift in consumer priorities.

Technological advancements are also accelerating demand for smart appliances, further shortening product replacement cycles. With the increased penetration of high-speed internet and improved connectivity, consumers are now more inclined to invest in devices that are not only energy-efficient but also smart and interconnected. The growing middle class, in particular, is driving this shift, with a clear preference for appliances that integrate sustainability and technology.

The report highlighted the increased adoption of televisions, which saw household penetration rise to 60% in 2023. This is indicative of a broader trend of rising consumer aspiration, where technology-driven products such as smart TVs, refrigerators, and washing machines are becoming more commonplace in Indian households.

E-commerce and Supply Chain Expansion
Despite the growing demand for smart and premium products, India currently lags behind many other countries in terms of online sales, with e-commerce accounting for only 14% of overall consumer durable sales. However, online channels are expected to grow rapidly, driven by greater brand choice, home delivery options, and a widening consumer base.

The government’s Open Network for Digital Commerce (ONDC) initiative is expected to play a pivotal role in boosting e-commerce adoption, especially in smaller cities and rural areas. By democratizing access to a wide range of products and enhancing consumer choice, ONDC aims to broaden the market base and accelerate the penetration of consumer durables across tier-2 and tier-3 cities and rural regions.

This rural expansion, coupled with the growth of online retail, is likely to be a significant driver of growth in the coming years. The report forecasts that the supply chain will deepen its reach into these markets, offering consumers access to a wider array of products, including premium and value-added items.

Policy Support and Industry Recommendations
The EY Parthenon report underscored the importance of collaboration between government and industry stakeholders to further boost domestic demand for consumer durables. Recommendations include increasing incentives for the PLI schemes, particularly for critical components such as controllers, compressors, and motors, which are key to the manufacturing process. Additionally, harmonizing the GST slabs across different product categories could enhance affordability, making consumer durables accessible to a broader audience across various income groups.

Another significant recommendation involves incentivizing the ownership of energy-efficient products. Providing tax breaks or on-bill financing to consumers purchasing energy-efficient appliances can help reduce the energy burden while promoting sustainability. These incentives could drive a multi-fold circular benefit for both the industry and consumers by lowering energy consumption and contributing to environmental goals.

Conclusion
With strong policy backing, increasing consumer demand, and technological advancements, India’s consumer durables sector is on track to become a global powerhouse. As manufacturers capitalize on these growth opportunities and adapt to the evolving market dynamics, the sector is set to play a pivotal role in driving India’s economic growth and job creation over the next decade. By 2029, with continued investment and strategic collaboration, India’s consumer durables market will likely cement itself as a critical player in the global arena.

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TCS Unveils Pace Studio in Philippines to Boost Digital Innovation

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Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 19, 2024

E-commerce Boosts High-End Electronics Sales in India

E-commerce Boosts High-End Electronics Sales in India

In the first half of 2024, the Indian market witnessed a significant shift in consumer behaviour concerning the purchase of high-value items such as washing machines, air conditioners, laptops, and tablets. Traditionally, Indian consumers preferred to see, touch, feel, and be assured of these products in brick-and-mortar stores before making a purchase. However, recent data from GfK-NielsenIQ reveals that this trend is rapidly changing, with online sales of these products outpacing those in physical stores by a substantial margin.

According to the data, air conditioner (AC) sales online surged by 62% in value during the January-June 2024 period compared to the same period last year, while offline sales grew by only 30%. Similarly, washing machine sales saw a 15% increase in value online, with offline sales remaining flat. In the laptop segment, online sales grew by 7%, whereas offline sales declined by 3%. The trend was even more pronounced for tablets, where online purchases doubled in value, compared to an 18% growth in physical stores.

Industry experts have noted that the gap in sales growth between online and offline channels for these electronic products has never been this wide. Historically, online sales growth for such products was typically only 4-6 percentage points higher than offline sales, except during the Covid-19 pandemic when physical stores were forced to shut down. However, the current data indicates a much more significant divergence.

Anant Jain from GfK India noted a significant change in consumer behaviour. He observed that online shopping is no longer limited to entry-level products, with many customers now researching in stores but buying online for better deals and convenience. Additionally, Jain emphasized that the average selling prices for categories like ACs, washing machines, and laptops are relatively higher than other products, which has contributed to the overall growth in sales value through online channels.

The data also shows that overall sales of consumer electronic goods grew by 17% online during the January-June period, compared with a 12% growth in offline sales. Interestingly, while sales growth by volume—or the number of units sold—was two percentage points higher offline at 12%, the value growth in the online market was notably stronger. This indicates that consumers are increasingly purchasing more premium products through e-commerce platforms and direct-to-consumer channels offered by brands.

Satish NS, the president of electronics company Haier India, noted that the previous resistance to buying premium models online has significantly diminished. He observed that many younger consumers are now choosing to purchase high-value electronics online, foregoing the traditional “touch and feel” experience. However, Satish emphasized that for the vast majority of consumers, price remains the most critical factor influencing their purchasing decisions, even more so than convenience.

This shift in consumer behaviour is also evident in the smartphone market. There has been a noticeable trend towards buying premium models online, a departure from the previous preference for in-store purchases of high-end devices. The online market for smartphones saw a boost during the summer sales in the April-June quarter of 2024, a period when offline sales were adversely affected by severe heat waves that kept people indoors.

The rapid growth of online sales in the high-value electronics segment signals a broader transformation in the Indian retail landscape. As more consumers embrace e-commerce for purchasing premium products, the traditional dominance of brick-and-mortar stores is being challenged. The convenience of online shopping, coupled with attractive deals and a growing comfort level with purchasing expensive items without physically examining them, is reshaping the way Indian consumers approach buying electronics. The shift towards online purchases is expected to persist, narrowing the divide between digital and physical retail channels. In the coming years, this trend may potentially lead to e-commerce platforms becoming the dominant sales channel for consumer electronics.

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TCS Unveils Pace Studio in Philippines to Boost Digital Innovation

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Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies
Business, Equities, Market News, Markets - September 4, 2024

The Rise of Quick Commerce (QC) in India’s E-Commerce

The Rise of Quick Commerce (QC) in India’s E-Commerce

The world of e-commerce is changing rapidly. One of the most important changes taking place is the growth of Quick Commerce (QC), which is focused on making food, groceries and other consumer goods easier and faster at the doorsteps This approach new is reshaping the way merchants and consumers engage in online marketing.

Quick Commerce, or QC, refers to the transfer of goods from the Internet quickly—usually within minutes or hours. Unlike traditional e-commerce, which often relies on scheduled or slotted delivery, QC aims to meet customers’ demand for speed. The business model prioritizes convenience and speed, enabling customers to order essential products and receive them at their doorstep in record time.

In today’s fast-paced world, customers are increasingly demanding faster and more efficient services. Time is precious, and QC offers a solution that meets this need. The shift from traditional delivery to QC is driven by customers’ desire for speed, making speed a key factor in retaining and attracting customers

The COVID-19 pandemic played role in the rapid development of Quickcommerce. Although caused by the pandemic, the simplicity and efficiency of QC services makes them popular even as life returns to normal. Customers are accustomed to the convenience of having their groceries, meals, and other necessities delivered in less than an hour.

With increasing demand for faster delivery, many big players in the e-commerce space are making the transition to QC. Tata-owned Bigbasket, a major player in India’s e-grocery market, is transitioning from slotted delivery to a QC model. Similarly, Amazon India has plans to enter the QC segment and could launch its services by early 2025 as well.

The foray of such big names into the QC market is no surprise. Speed is now a keyin a highly competitive consumer-driven market. Slotted delivery platforms, which rely on long-planned delivery, are losing market share to faster QC models.

Increasing competition in the QC market
Competition in the QC space is heating up. Both start-ups and established companies compete for market dominance. Zepto, a fast-growing startup, is expanding its darkstorage network to meet growing demand. Dark warehouses are strategically located warehouses that serve as QC delivery centers, allowing companies to deliver in record time.

Two other major players in the QC market, Blinkit and Instamart are also vying for a big share. These companies offer loyalty programs and discounts to lure customers away from their competitors.

Although competition is fierce, industry experts predict that the market could eventually consolidate, leaving only three or four major players in the long term but five to seven serious competitors are expected to emerge competing for customer attention in the QC space in a relatively short period of time.

What was initially seen as a U.S. right. $6 billion in the Indian e-grocery market by FY2024, it is currently witnessing significant growth. The QC market is expected to grow seven-fold and by 2030 will reach a whopping $40 billion

Interestingly, QC is not only gaining traction in metros. Customers in smaller cities are also embracing the convenience of QC delivery platforms. This provides a significant opportunity for service providers to expand their reach beyond urban areas and tap into the enormous potential of non-metro markets

As the lines between traditional e-commerce and QC blur, many companies must adapt to changing customer expectations. Customers now want faster deliveries, and QC providers are responding by innovating their delivery options to meet these expectations.

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Sugar Industry Fears New Norms May Stifle Growth and Innovation

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British Fashion Titan ASOS Makes Exclusive Indian Debut Through Ajio
Business, Equities, Market News, Markets - August 26, 2024

British Fashion Titan ASOS Makes Exclusive Indian Debut Through Ajio

British Fashion Titan ASOS Makes Exclusive Indian Debut Through Ajio

In a groundbreaking move, Ajio, the e-commerce arm of Reliance Retail, has forged a strategic alliance with British fashion powerhouse ASOS. This collaboration marks ASOS’s inaugural foray into India’s burgeoning online retail landscape, introducing a curated selection of over 3,000 products from its esteemed subsidiaries to the Indian market.

Ajio’s CEO, Vineeth Nair, emphasized the timely nature of this partnership, noting the increasing global fashion consciousness among Indian consumers. “Today’s Indian shoppers are deeply attuned to international trends,” Nair observed, highlighting the platform’s aim to cater to this evolving taste.

ASOS’s chief executive, José Antonio Ramos, expressed enthusiasm for the partnership, commending Ajio’s expertise in navigating the Indian market and its strong foothold among local consumers. He views this collaboration as an ideal opportunity to introduce ASOS’s distinctive style to fashion-forward Indian shoppers. This partnership, he suggested, aligns perfectly with ASOS’s global expansion strategy.

This latest addition augments Ajio’s already impressive roster of over 6,000 brands, which includes several exclusive international labels. The platform has witnessed a notable uptick in average transaction values over the past year, a trend attributed to its expanding portfolio of premium global brands.
As India’s appetite for international fashion continues to grow, this collaboration between Ajio and ASOS could potentially reshape the country’s fashion retail landscape. It not only broadens consumer choice but also signals a new era in the accessibility of global fashion trends for Indian shoppers.

This strategic move by Reliance Retail’s Ajio underscores its commitment to innovation and its ambition to dominate India’s competitive e-commerce fashion market. As the lines between local and global fashion continue to blur, partnerships like these are poised to play a pivotal role in shaping consumer preferences and driving industry growth.
This collaboration marks ASOS’s inaugural entry into the Indian market, offering fashion-forward consumers unprecedented access to its globally acclaimed styles through Ajio’s platform.

The launch introduces an extensive array of over 3,000 carefully curated items from ASOS’s portfolio, encompassing brands such as ASOS Design for both men and women, ASOS Edition, ASOS Luxe, and Miss Selfridge. With ambitious plans to expand its offerings fivefold within a year, ASOS aims to continuously refresh its collection with monthly releases, aligning with India’s dynamic and evolving fashion scene.

This strategic alliance dovetails with Ajio’s vision to revolutionize Indian fashion choices, particularly in light of the growing trend towards premiumization. The platform has witnessed a remarkable surge in demand for international brands, with its global brand portfolio doubling over the past two years. The addition of ASOS further cements Ajio’s position as the go-to destination for coveted global labels, including other exclusive partnerships with renowned brands.

Ajio has observed a notable uptick in branded merchandise sales and a positive trend in Average Basket Value over the recent year, reflecting the increasing consumer appetite for premium fashion. This shift underscores the evolving preferences of Indian shoppers, who are increasingly seeking to elevate their style choices.
To commemorate ASOS’s debut, Ajio has orchestrated a comprehensive marketing strategy, encompassing both digital and traditional media channels. In a pioneering move, the platform is set to unveil an innovative Mixed Reality experience, offering an immersive and interactive showcase of ASOS’s trendsetting products, elevating the customer shopping journey.

Vineeth Nair, CEO of Ajio, emphasized the platform’s strategic positioning in light of India’s increasing exposure to global fashion trends and pop culture. He highlighted the growing appetite for international brands among young Indian consumers and Ajio’s role in catering to this demand by curating an exclusive portfolio of global fashion labels.
The head of ASOS, José Antonio Ramos, shared similar positive feelings about working together with Ajio. He highlighted Ajio’s strong knowledge of Indian consumers and their established market position as important reasons for choosing to collaborate. He conveyed excitement about introducing ASOS’s trend-driven brands to the Indian audience and anticipates a strong resonance with Ajio’s customer base.

This groundbreaking partnership between Ajio and ASOS not only broadens the horizons for Indian fashion enthusiasts but also signifies a new chapter in the country’s e-commerce fashion narrative, this groundbreaking alliance between Ajio and ASOS heralds a transformation in India’s fashion landscape, poised to reshape consumer tastes and enhance the digital retail journey for style-conscious shoppers across the nation.

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