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.
The image added is for representation purposes only
