Chennai: Demand for large appliances is set to grow as digitally influenced shoppers use Internet as a medium to research, shop and review such products, said a report.
Cheaper data rates, and access to online shopping has pushed the digital influence on the sale of large appliances such as televisions, air conditioners, and washing machines to 28 per cent of the overall consumer durables market, said a report released by Boston Consulting Group in collaboration with search giant Google India.
Titled “Digital Powers Consumer Durables”, the report noted that such ‘digitally influenced’ sales will impact 63 per cent of total consumer durables sold in India by 2023. That translates to $23 billion in sales over the next five years, it said.
By 2023, $10.4 billion or 28 per cent of sales for durables will be online, the report said.
BCG and Google surveyed over 6,800 shoppers for the report. It measured consumer preference towards purchasing large appliances such as air conditioners, washing machines, refrigerator, small appliances excluding mobile phones that are already heavily sold online.
Mobile phones still dominate a bulk of all consumer durables sold online, said the report. However, as India’s e-commerce market has matured sales of bigger, pricier appliances such as TVs, machines, and ACs have also shifted online.
Additionally, rising smart phone usage, cheap data rates, and a decline in smart phone prices apart from growth in vernacular content and offers by e-commerce companies are prompting consumer shift to online.
The report also said low price (52 per cent), convenience (46 per cent), ease of returns and refunds (40 per cent), availability (29 per cent) as well as choice of multiple payment options (24 per cent) are the key factors driving buyers to make purchases online.
‘When you look at e-commerce stats they significantly understate the role of digital because it is only a small percentage of people who purchase online but it is a larger percentage of people who are influenced online,’ said partner and MD, BCG, Nimisha Jain.
‘Over the next five years our estimate is that that number will come to over 60 per cent,’ she added.
As of 2017, the overall durables retail market in India stood at $16.9 billion. Of this digitally influenced online sales stood at $1.7 billion in 2017.
| Jio effect |
| “We have more than 450 million people who are on the internet. Give or take a couple of million, we have 375-400 million people who own smart phones. What we’ve seen post the Jio effect when the internet prices fell down consumption (of data) went up by 18-20 times,” said country manager, Google India, Vikas Agnihotri.
As a result, shoppers today, said Agnihotri are searching for products, they are searching for information, etc. “Therefore, a lot of behavior is percolating down in terms of influencing overall consumer behavior towards buying goods— consumer durables being one of them,” he added. |