Countryside a gold mine for consumer durable cos

NEW DELHI: The market for consumer durables in rural India is growing at a much faster pace than the urban areas. According to a Ficci survey for April-September 2007, the rural market for consumer durables grew by 25% while urban grew market grew by less than 10%.

The rural market, which accounts for nearly 70% of the total number of households, grew mainly on account of higher purchasing power due to increased government spending and higher agro-based industrial activity, says the survey. The overall growth of consumer durables industry for the period was 13%, a trend that is likely to continue during the festival season till December 2007, says the survey, adding that an overall growth of 12% is expected for the current financial year.

There is a discernible shift in consumer preference in favour of higher-end and technologically superior branded products. The is demand being spurred by increasing consumer awareness and preference for new models, says the survey. “The survey reflects changing dynamics of consumer behaviour – luxury goods are now being perceived as necessities with higher disposable incomes being spent on lifestyle products,” says Ficci president Habil Khorakiwala.

The survey points out that the consumer durables industry is witnessing a higher rate of growth in terms of volume than in value because of constantly falling prices over the years due to increasing competition among major players and declining import tariffs.

The survey, based on feedback and interaction with representatives of consumer durables industry, allied industry organisations and government agencies, reveals that the sector is poised for a quantum leap due to technological improvements, falling prices due to competition, aggressive marketing and declining import tariffs.

The segments which led the growth are LCD TV (360%) plasma TV (120%), high-end flat panel TV (200%), microwave oven convection (127 %), microwave oven (75 %), fully-automatic washing machines (40%), split air-conditioners (80%), air-conditioners (40%), frost-free refrigerators (35 %), VCD/MP3 (20 %), DVD (25 %). B&W TV recorded a negative growth of 20%.