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Indias CE Market Value to Reach US$16Bn by 2012

Last year, Indias CE market grew by more than 30 percent to reach U.S. $3.8bn and will continue to skyrocket.

Bedfordshire, U.K.–Last year, Indias Consumer Electronics (CE) market grew by more than 30 percent to reach US$3.8bn and will continue to skyrocket. According to a newly released India CE Market report from Futuresource Consulting, the market value is on track to quadruple in the space of five years, to reach nearly US$16bn by 2012.

This rapid growth is being driven by the countrys rising levels of disposable income, says Kanti Thota, Research Analyst at Futuresource. Its economy is riding a phenomenal growth curve, and with current penetration rates low for most CE products the market opportunities are huge.

Take the TV market, which represents more than 80 percent of the total CE market value in India; this is witnessing the strongest growth, with shipments up 22 percent last year and forecast to more than double by 2012, reaching 34 million units.

CRT accounted for 97 percent percent of CTVs shipped in 2007, continued Thota, and Indias price sensitivity can be a barrier to growth for flat screen and flat panel products. However, by 2012, LCD and plasma will account for 55 percent percent of shipments –up from less than 3 percent last year–and this equates to a staggering US$10Bn-plus of trade value.

In a country inhabited by over one billion people, expanding by 18 million every year, and a swelling middle class population, India is expected to overtake China to become the worlds most populated nation by 2030.

The number of households owning home AV products is also expanding. Currently less than 15 percent, it is set to rise to nearly 30 percent by 2012. Additionally, growth in home Internet broadband connections will help drive the uptake of personal CE products such as digital cameras and MP3 players. From less than 3 million last year, Futuresource predicts there will be nearly 19 million broadband subscribers by 2012.

The future of retail distribution is looking bright too, with distribution networks expanding in B and C rated cities. Infrastructure improvements, especially in transportation and the electrification of rural areas, will provide the backbone for sustainable growth. Vendors are extending their marketing campaigns to rural areas and launching attractive financing schemes in a bid to counteract the huge amount of grey market activity.

 CE suppliers are now offering a wider range of affordable, entry level products to meet the needs of this price sensitive market, said Thota, and this will help drive mass market uptake, though high taxation levels–upwards of 40 percent percent–will continue to threaten the legitimate market, especially must have personal products such as MP3 players and digital cameras.

At present, activity within Indias grey market almost doubles the total market in terms of unit sales. However, added value bundling and incentives on legitimate products (such as free memory cards) coupled with additional warranties via authorised distribution channels are just some of the factors leading to the year on year decline of grey market activities.