Compared to the rest of the South-East Asian region, India’s market size for consumer durables is significantly small, which means that there is much potential for a multi-year growth cycle. A report by Deutsche Bank and Euromonitor says that if India is to get anywhere close to the South-East Asian average, the India market should be at least 50 per cent of the size of the China market as against the current size of just 9 per cent.

Euromonitor projects industry volume CAGRs (compounded annual growth rate) of 4, 6 and 8 per cent over 2015-20 for AC, refrigerator and washing machine respectively. The penetration rate of white goods in India will rise as the per capita income level grows over the long term. The medium-term outlook looks positive with low inflation, reducing interest rates, job creation (i.e., rising income) and hence, higher discretionary spending.

The refrigerator segment makes up 55 per cent of the consumer appliances market. The market share of the direct cool and frost-free segments is 75 per cent and 25 per cent respectively. The rising demand for frost-free refrigerators is a growth driver. The estimated market size for refrigerators in India is estimated to be $ 2.2 billion in 2015 and may grow 5 per cent over 2015-20.

The AC market size by volume accounted for sales of 3.5 million units in 2015. Market size expanded to $1.6 billion in 2015E, and it is expected to grow 9 per cent over 2015-20. Globally, AC markets are about 1.2 times the size of refrigerator markets. The segment had a 19 per cent share in 2015E of the consumer appliances market. Current penetration stands at just 3 per cent. The washing machine segment size was $0.75 billion in 2014, and it is expected to grow 4 per cent over 2015-20. Washing machines had a 26 per cent share in 2015E in the consumer appliances market. Fully automatic washing machines are increasing their share due to a reduction in prices and higher incomes.

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