Indians are spending on e-goods again
Growth is being driven by consumers increasingly opting for premium products despite the overall inflationary environment, rising prices across all categories and working from home due to restrictions for nearly two quarters of last year, industry executives said.
While cellphones, laptops, refrigerators, washing machines, air conditioners, food processors, clothing and other accessories all sold more last year than in 2019, television was the only category where 2021 sales were 3% lower than 2019, all categories including TV saw robust growth in 2020, according to data from market intelligence firm GfK India.
Computer sales in 2021 were up 87% from 2019 levels, while major appliances, including refrigerators, air conditioners and washing machines, were up 10% from 2019, the kitchen and small appliances increased by 13% and overall mobile phone sales increased by 4%. Smartphone sales increased by 8%.
GfK tracks actual sales from retail stores and online platforms.
Nikhil Mathur, Managing Director, India at GfK, said the value growth of consumer technology products was largely driven by IT and home appliances, which can be attributed to increased online channel sales. , the trend towards premiumization across all categories, the growth of lower-tier cities, and home standard.
In terms of sales volume, individual categories like air conditioners (8%), washing machines (13%), microwave ovens (22%) increased in 2021 compared to 2019, while refrigerators , TVs and smartphones remained impacted by the pandemic and supply disruptions.
A senior executive at a major electronics company said there were major supply problems for televisions and smartphones last year due to shortages of displays and semiconductor chips, which had an impact on their recovery.
The industry expects a broad recovery in 2022. Deepak Bansal, vice president, home appliances and AC, at LG Electronics, said market sentiment will improve this year as Covid-19 cases decline. , the easing of restrictions and the recovery of sales during the summer that has been lost for the past two years due to the waves of Covid-19.
The average selling price (ASP) – an indicator of premiumization – in most product categories increased by double digits in 2021 compared to 2019. For example, the ASP of smartphones is up 22% compared to 2019 levels, television by 15%, and microwave and refrigerator by 11%.
This trend will continue this year as well, according to GfK. “Across all categories, we’ve seen ASP growth, driven both by rising input costs due to shipping and chip shortages, and a move toward premium products like front-loading washing machines, 351-litre fridge, ultra HD television and smartphones priced over ₹30,000,” Mathur said.