Economy

Electronics appliance market set to grow at 10% CAGR by 2022: study

Our Bureau Mumbai | Updated on January 09, 2018 Published on November 20, 2017


TheIndian ACE (Appliance and Consumer Electronics) market is expected to grow by 10 per cent CAGR approximately by 2022, according to PwC’s report “Championing change in the Indian appliance and consumer industry”.

A study on the growth possibilities of this segment, the report states that India has the potential to be one of fastest growing ACE markets in the world, not only in terms of consumption, but also manufacturing and job creation.

Key challenge

Several factors are expected to drive the growth of this segment, including the emerging middle-class, rising disposable incomes and progressive government reforms such as Digital India, Make in India and the Jan Dhan-Aadhaar-Mobile based governance.

However, a key challenge for the ACE market continues to be the low domestic cumulative value addition in the production cycle, which is less than 40 per cent for most new age ACE products and 7 per cent for smartphones, far lower than the global average.

Further, nearly 84 per cent of the participants surveyed in this report stated that their overall domestic value add in production was less than 50 per cent.

This can be attributed to a limited domestic component ecosystem, high cost of finance and power, and inefficient infrastructure.

According to Sandeep Ladda, PwC India Partner, Global TMT Tax Leader and Technology Sector Leader: “The government’s efforts coupled with positive transformation of consumer behaviour and desire to adopt more modern technologies are likely to create a significant increase in demand for ACE products.

“However, to unlock the full potential of the ACE industry, we need to build an ecosystem of supportive regulations around technology enablment and a strong domestic R&D backbone supported with manufacturing competitiveness.”

Published on November 20, 2017
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