Global Supplier Directory
Supplier Solutions
Whitepaper Library
Calendar of Events
Association Locator
Contents Pages
Market Research
Subscription Center

issue: September 2007 APPLIANCE Magazine

New Delhi Report
Designing Appliances for India’s Unique Needs

 Printable format
 Email this Article

by Adite Chatterjee, India Correspondent

The India growth story is capturing headlines. A McKinsey report recently described the Indian consumer market as the “Bird of Gold.” The report says, “India’s real aggregate disposable income has grown from Rs 7527 billion (approx. US$165 billion) in 1985 to Rs 23,526 billion (approx. US$515 billion) in 2005—a compound annual growth rate of 5.9%. India’s fast-growing population has meant that, on a per-household basis, [growth in] real disposable income has been less rapid though moderately strong, rising from Rs 56,470 (approx. $1236) in 1985 to Rs 113,744 (approx. $2489) in 2005—a compound annual growth rate of 3.6%.”

Such forecasts help to whet the appetites of consumer products companies around the world. As product sales get saturated in developed markets, multinational companies are looking at grabbing a slice of the consumer pie in markets like India. Consumer durables companies, for instance, have waited for a long time for the Indian market to mature. But the pot of gold seems to elude them. Penetration of consumer products such as washing machines, refrigerators, and microwave ovens continues to be minimal. The latest IMRB Baseline Survey, which covered 6.4 million households across the top eight cities in India, reports that penetration of fully automatic top-loading washing machines is just 3.5%, while semiautomatic machines have penetrated 10.1% of households in these cities. Similarly, only 3.8% of households are fitted with air conditioners, while in smaller towns the reach is even lower at 1.3%. Color TVs are perhaps the only consumer product that have an urban reach of 62.3%.

So, what gives? Clearly, middle-class Indians have the disposable incomes to be able to afford the durables, and given that many of these products are sold with attractive financial packages, the dismal penetration figures suggest that something else is going on here. Some marketers have begun to realize that current appliance configurations do not offer the functionality that Indian consumers need. For instance, electricity and running water—the two key inputs for most appliances—are at best unreliable in most Indian cities. Long hours of power cuts lead to lower efficiency of appliances.

Take, for instance, refrigerators. While frost-free refrigerators are preferred the world over, Indians prefer the direct cool version. This is not just due to the lower price tag. Power outages lead to a thick formation of ice inside the freezer compartment, which keeps the entire refrigerator cool for a few hours. However, the frost-free refrigerators have a separate freezer compartment and as a result the temperature in the refrigerator compartment rises quickly during power outages. Further, most Indians have little use for large freezer compartments as a significant percentage of consumers are vegetarian and do not eat meat or fish. Because of the frequent power outages, dairy products such as milk cannot be stored in refrigerators for long.

Or take the case of washing machines. Fully automatic washing machines are not the preferred choice of consumers. Most consumers are averse to washing all their dirty linen in the same wash cycle. For instance, whites are washed separately from colored clothes. And kitchen towels etc. are piled up for a separate wash cycle. As a result, semi­automatic washing machines offer consumers better value than fully automatic machines. Moreover, in a country where dust and heat are the two constant factors, people use cotton much more than they do synthetic fabric. As a result, wear and tear of clothes is much faster for cotton and natural-fiber clothes that are machine-washed.

Increasingly, marketers are realizing that to increase the penetration of appliances in India, these environmental and cultural issues need to be addressed. And a few have started doing so. Whirlpool introduced the Genius, a single-door, 180-liter refrigerator equipped with a utility-drawer-cum-pedestal to help store vegetables that don’t need refrigeration. The company claims that its range of refrigerators maintains cooling retention of 1500 minutes during power cuts.

LG India, one of the largest consumer electronics and appliance marketers in the country, is developing custom-designed home appliance products specifically for the Indian market. LG is focusing on washing machines and refrigerators and these made-in, made-for India products should be launched in 2009. Another company, Voltas Ltd., has announced plans to launch energy-efficient air conditioners that will lead to actual savings in power bills for consumers.

The focus has so far been on adapting foreign products to meet Indian consumer needs. However, companies are now realizing that smart marketing can only get one so far. To penetrate deeper into the Indian market, products have to be designed to meet consumer needs. When that happens, perhaps the Indian consumer market will finally live up to the forecasts being made by economists.


Daily News


Dec 22, 2014: Whirlpool headquarters improvements start a new phase

Dec 22, 2014: DOE's Building Technologies Office releases Roadmap for Emerging HVAC Technologies

Dec 22, 2014: Variable-speed circulation pump enables new Miele lab washers

Dec 22, 2014: The latest retail data breach: Staples

Dec 22, 2014: Consumer Spending Index is at its highest point of the year

More Daily News>>

RSS Feeds
Appliance Industry
Market Research


November 2014: Appliance Magazine Market Insight Annual Subscriptions
November 2014: U.S. Appliance Industry: Market Value, Life Expectancy & Replacement Picture 2014
October 2014: Portrait of the European Appliance Industry
September 2014: Appliance Industry Focus: HVAC

Contact Us | About Us | Subscriptions | Advertising | Home
UBM Canon © 2014  

Please visit these other UBM Canon sites

UBM Canon Corporate | Design News | Test & Measurement World | Packaging Digest | EDN | Qmed | Plastics Today | Powder Bulk Solids | Canon Trade Shows