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Budget 2024: The fast charging for consumer durables’ journey from Make in India to Innovate in India

Budget expectations: The Indian market is undergoing a notable change in the consumer durables industry. The amalgamation of a burgeoning middle class in urban areas and the aspirational demand emanating from rural India, coupled with government reforms such as the Goods and Services Tax (GST), has set the stage for the electronics and appliances industry to envision a phase of exponential growth.

As we step into 2024, consumers increasingly seek products that blend cutting-edge technology with an ultra-modern aesthetic.

The era of connected living is upon us, fueled by the advent of the Internet of Things (IoT) and Artificial Intelligence (AI) in the consumer durables segment. The scope of possibilities in this landscape is vast, given the sheer size of the domestic electronics market.

Smart connected devices like Smart TVs, smart fridges, and wearables are at the forefront of this technological revolution. India has emerged as one of the largest growing electronics players globally, reflecting a growing interest in the integration of technology into daily life.
The adoption of connected devices in India is currently concentrated in tier 1 cities, but the trajectory points towards a significant uptick in tier 2 and tier 3 cities in the near future.

The government’s emphasis on ‘Digitalization,’ the increase in internet penetration and data usage, coupled with heightened awareness in the 30-55 age bracket, is poised to accelerate the adoption of smart devices across the country.

However, this journey towards a tech-driven future is not without its challenges. Issues related to privacy, security, and transparency, along with concerns about being locked into specific products and systems, loom large. These challenges are compounded by the rapid proliferation of smart devices, outpacing the development of robust regulations. Existing problems such as lack of transparency on collected data, escalating data volumes, and data security need immediate attention and the interim Budget may look into these aspects.

New challenges are emerging, demanding swift resolutions. Mismatched expectations between consumers and regulators regarding data ownership, coupled with the increased cost of opting out of a service, require urgent addressal. Furthermore, the inadequacy of supporting infrastructure in terms of quality roads, reliable electricity, and a robust telecommunication network, coupled with a workforce lacking expertise in new-age technologies, poses hurdles to widespread adoption.

In navigating these challenges, the consumer durables industry in 2024 is poised to thrive by staying premium and sustainable. Industry leaders and experts emphasise that premium, feature-led products, incorporating cutting-edge technology and sustainability, will be the key growth drivers.

Consumers are increasingly drawn to products that are manufactured locally, aligning with the ‘Make in India’ initiative. Brands are responding to this demand in a competitive industry, working towards delivering products that not only meet but exceed consumer expectations.

According to a CRISIL report, the consumer durable sector is expected to witness a revenue growth of 8-10% in the fiscal year, driven by the trend of premiumization and a steady urban demand. Operating profitability is projected to improve, aided by a softening of raw material prices.

The demand for premium appliances and wearables is anticipated to surge, driven by three main factors: the increasing demand for appliances with smart technologies that seamlessly integrate with other devices, a shift towards higher capacity/sizes at limited incremental cost, and the rising preference for efficient appliances that lower operating costs.

According to a CRISIL report, the consumer durable sector is expected to witness a revenue growth of 8-10% in the fiscal year, driven by the trend of premiumization and a steady urban demand. Operating profitability is projected to improve, aided by a softening of raw material prices.

Jan 25,2024

Source: Economic Times

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