According to a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI), the Indian consumer durables sector is set to grow by 12% in 2007–08, compared with 11.5% in 2006–07 and 8.5% the previous year. The rural market, which accounts for nearly 70% of households, is contributing significantly to the growth as it is growing annually by 25% compared with just 7–10% in the urban market.
Key factors cited by the study include technological improvements, falling prices due to rising competition, aggressive marketing, and declining import tariffs. High-end products like flat-panel televisions, LCD TVs, plasma TVs, slim CRT TVs, frost-free refrigerators, fully automatic washing machines, split air-conditioners, DVD players, microwave ovens, and home theater systems are responsible for the growth of the sector.
“The findings reflect the changing dynamics of consumer behavior—luxury goods are now being perceived as necessities with higher disposable incomes being spent on lifestyle products,” the report said. “There is a discernible shift in the consumers’ preference in favor of higher-end, technologically superior branded products, the demand being spurred by increasing consumer awareness and preference for new models.”