The Hindu Business Line : Refrigerator market still on a freeze?

DESPITE being one of the oldest white goods products introduced in the Indian market, refrigerator market penetration level is still much less (around 15 per cent) than colour televisions (20 per cent), a relatively late entrant on the scene.

In fact, the total level of television penetration (black and white and colour televisions included) would be about 45 per cent.

One of the reasons cited for this low level of penetration is the extremely negligible effort by the industry to propagate the utility of the product, industry insiders' state. "The players talk about the technology used by them but they never talk about the usage of the product in today's life," analysts point out. Besides, availability of power also plays a very important role in pushing sales.

"During the current year, the refrigerator industry has experienced marginal growth. In volume terms, the growth has been to the tune of 8 per cent to 10 per cent, while in value terms it is negligible," market watchers told Business Line.

Commenting on low value growth, a Consumer Electronics and TV Manufacturers Association (CETMA) official said, "There has been value erosion due to severe competition. The reasons for dip in value is due to lowering of cost, better supply chain management and restructuring initiatives taken by the companies." However, low cost does not mean that profit margins are being squeezed, the official pointed out.

In fact, the refrigerator industry has witnessed very haphazard growth. Elaborating further, sources said, "The freight costs for bigger size refrigerators is much higher, inventory planning has not been good, the colour variants are there and the choice of sizes are too many, unlike television.''

Besides, it is pointed out that refrigerator players are comparatively less and to ensure sales, dealers are pampered with discounts and freebies.

The other reason cited for uneven growth is the fact that most players in the segment are based in the North. "Even the components industry is based in the North, this despite the fact that Bangalore is seen as the hub of the electronics industry. To examine the problems faced by the industry and the factors that can trigger growth in southern India, CETMA is convening a meeting on December 15 at Chennai," a CETMA official said.

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