How Electronics Goods Industry Increase Market Penetration in India

Market Penetration Strategies for Electronic Goods Industry – White Goods (Home Appliances, Electronics)

Nowadays, it is common for consumers to upgrade their electronic “white” gadgets once a new version or model comes out. White goods refer to large electronic appliances, such as dryers, refrigerators, and washing machines.

This dynamic consumer behavior has led to the increased demand for electronic goods around the world, facilitating the entry of several mid-sized players and small brands. This has prompted increased competition among companies, compelling them to search for different markets to expand their operations or require strategies for product or Market Penetration in India.

For an organization looking to extend its business abroad, there can be no better option than India. However, its vast population belongs to varying demographic and cultural backgrounds. This can be a difficulty for foreign firms when it comes to understanding the consumer behavior of the Indian people. Under such circumstances, they can take help from electronics industry business consultants in India to successfully execute their entry and expansion plans or market penetration in India

White Goods Sector – Global Outlook

As per a market survey, the global white goods industry is set to grow at a compounded annual growth rate (CAGR) of 8.8% from 2023 to 2028. In 2022, this market had a valuation of USD 752.4 billion and according to reports, it is all set to reach USD 1200 billion by the year 2028.

This high demand for white goods can be attributed to several factors:

• Rise in Demand for Environment-Friendly Goods

Recently, due to global concerns about climate change and rising pollution levels, there has been an uptrend in buying energy-efficient electronic appliances. Competitive manufacturers have taken full advantage of this situation. They have started developing electronic and home appliances that will be energy-saving as well as environment-friendly.

• Easy Access to Electronics Due to E-commerce

Nowadays, thanks to e-commerce and social media, consumers have easy access to purchasing electronic appliances. They have a plethora of products to make their choice and competitive pricing by different companies makes it all more appealing.

• Increased Spending Power Among Consumers

The improving lifestyle of people worldwide, their rising personal income, and increasing dependence on electronic goods for day-to-day tasks are significant factors for the growth of the white goods sector.

India's White Goods Industry- What the Scenario ?

In India, the white goods industry had a market capitalization of USD 13.66 billion in 2021. According to experts, this segment is predicted to expand at 11% CAGR, crossing USD 21 billion by 2025, where domestic production will account for almost USD 4.6 billion.

By the financial year 2026, India’s air conditioner market in particular is set to increase by 20.8% CAGR to USD 9.88 billion, LED lights market to 8.12 billion with an 18.64% CAGR, the refrigerator market by 9.5% CAGR to USD 6.72 billion, personal care appliances market by 21% to USD 1.36 billion and the dishwasher market by 10.8% to USD 93.5 million.

Apart from these forecasts, there are several factors that can fuel the Indian white goods industry’s growth. They are as follows:

• Growth in Tier 2 Cities and Rural Markets

In India, there has been a recent growth in demand for white goods in Tier 2, 3 cities, and rural areas. This is a result of rapid development in infrastructure and the availability of electricity in villages. Thus, as the penetration of white goods brands increases in these areas, the demand for them among consumers will also increase.

• Untapped Market for Heavy-Duty Appliances

According to reports, the market for heavy-duty electrical appliances like fridges, air conditioners, etc., in India is largely untapped. In comparison to the average global penetration rate for ACs, which stands at 30%, in India, it is only a mere 4%. So, foreign firms planning to tap into this market have significant room for growth.

• Industry-Friendly Government Policies

Another big reason for the growth of the white goods industry in India is the industry-friendly policies of the government. The authorities have recently given their approval for 100% Foreign Direct Investment (FDI) for single-brand retail and 51% FDI for multi-brand retail chains.

Moreover, as per reports by the Department for Promotion of Industry and Internal Trade (DPIIT), there was a USD 3.2 billion worth of FDI inflow for white goods from April 2000 to June 2021.

So, it can be surely said that foreign white goods companies can grow exponentially by entering the Indian market or Market Penetration in India. However, there are several incorporation and regulatory rules when it comes to registering a foreign company in India. But, taking help from Electronics Industry Business Consultants in India can be an easy fix for that.

Market Penetration Strategies for India’s Electronic White Goods Industry

To penetrate the Indian white goods market, foreign firms can do the following:

• Conduct Local Research

Before entering the Indian market, a foreign entity must always conduct local research. This is because the needs, attitudes, and consumption patterns of the Indian people tend to differ across regions. Thus, gaining knowledge on these aspects is critical for creating a strong consumer base.

• Streamline Product Prices

Indian consumers hail from various economic backgrounds. Moreover, foreign firms should understand that the average salary of an Indian national is significantly less than their foreign counterparts. So, to build a market for themselves in this country, they need to set a reasonable price for their offerings.

• Digitise Product and Service Offerings

Digitization is a rapidly growing factor in India. Thus, in order to gain access to a wide consumer base, foreign companies need to digitize their products and services. This way, they can gain a large audience and succeed in their business goals.

• Consider Entering a Joint Venture or Partnership

Foreign organizations should consider getting into a joint venture or partnership with an Indian company to facilitate their market entry. It is a smart way to gain access to an available distribution network and set up their business operations in a new country seamlessly.

Moreover, by doing so, they can get the opportunity to do business with a pre-existing consumer base. But, for foreign entities to do all these all by themselves can be a hectic and time-consuming task.

It will need to employ additional resources and labor that may unnecessarily delay its market entry and expansion process. However, an easy way out of this is to hire Electronics Industry Business Consultants in India.

There are numerous business consulting firms like Tecnova that can help in this regard. They have the required expertise to facilitate market entry, partner search, mergers, acquisitions, etc., with ease and efficiency.

Reference

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