Parul
In a notable shift, the Technical Consumer goods (TCG) market in India experienced an 11% increase in value and a 1% rise in volume in H1’24 compared to the same period in 2023, specifically in the offline channel. This growth is largely attributed to heightened consumer interest in premium products and advanced technological features. A report by GfK, a market and consumer intelligence platform shared the insights on the growth in India’s TCG market.
Market highlights: Small and major domestic appliances lead the way
The Small Domestic Appliances (SDA) segment spearheaded this growth with a remarkable 29% increase in value, signalling a growing consumer demand for home convenience products. Major Domestic Appliances (MDA) also saw an 18% rise in value, tripling the growth rate observed in 2023. Key categories contributing to this surge include air conditioners, which grew by 30%, and refrigerators, which saw a 7% increase. Despite these gains, the market remains under-penetrated, offering ample opportunities for future expansion.
The telecom segment, encompassing smartphones and mobile phones, faced a 6% reduction in volume. However, this was offset by a 10% increase in overall value, with the smartphone segment alone registering a 12% value growth.
Anant Jain, Head of Customer Success – India at GfK, remarked, “India has emerged as the fastest-growing large market in the Technical Consumer Goods industry. Valued at around INR 2 lakh crores (USD 23 billion), the market saw over 125 million units sold in the first half of 2024. This represents a notable 11% increase in value in the offline channel during H1’24. The consumption growth underscores the diverse and dynamic nature of the Indian TCG industry, driven by evolving consumer needs and preferences. This growth in 2024 surpasses the growth achieved in 2023 by 3 percentage points.”
Consumer behaviour insights: Middle class to drive growth
India’s rapid growth in the consumer tech and durables market is underscored by a strong PMI reading and declining inflation rates. With the Indian middle class expected to outspend the upper class by 2030, and half of the world’s middle class projected to be based in Asia, the future looks promising for the TCG sector.
A recent study by NIQ reveals that approximately 32% of Gen Z and millennials’ spending is directed towards tech, customisation, and premium products, with an additional 10% focused on sustainability themes. Given that Millennials and Gen Z make up 52% of the Indian population, their influence as current decision-makers and future buyers is driving unprecedented growth in consumer tech.
Feature-rich and premium products fuel market expansion
The Indian market has seen a significant shift towards premiumisation, with consumers prioritising advanced technology and superior functionality in their purchases. Smartphones with 256GB+ storage, for instance, have seen a staggering 140% growth. Gaming laptops and washing machines with capacities of 9kg or more have also experienced 30% growth each. Air conditioners, particularly in the Split Inverter and 5 Star segments, have surged by 59%, while cooling appliances in the Side-by-Side, French Door, and 3/4 Door segments have grown by 11%.
“The rise of feature-rich products is reshaping the consumer tech landscape and paving the way for continued innovation and sector growth,” added Jain.
Online channel performance: A parallel surge in value
GfK’s Online Sensor report also indicates a robust performance in the online channel, with the TCG sector growing by 18% in value during H1’24. The SDA segment mirrored the offline growth with a 28% increase in value. MDA reported a 26% growth online, compared to 16% last year, driven largely by a 50% surge in air conditioner sales. However, the online channel saw some divergence from offline trends, with washing machines growing by 15% online, whereas refrigerators had a muted performance.
Panel televisions, however, remained stagnant in both online and offline channels.
As the Indian TCG market continues to evolve, the emphasis on premium, feature-rich products, and the growing influence of tech-savvy younger generations are expected to drive further growth in the sector.
