Technology | Media | Telecommunications

Monday, July 28, 2008

High Growth Consumer Electronics in India

Last year, India's Consumer Electronics (CE) market grew by more than 30 percent to reach $3.8 billion and will continue to increase. According to a market study by Futuresource Consulting, the market value is on track to quadruple in the space of five years, to reach nearly $16 billion by 2012.

"This rapid growth is being driven by the country's 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."

As an example, the TV market which represents more than 80 percent of the total CE market value in India 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 of CTVs shipped in 2007, and India's 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 of shipments -- up from less than 3 percent last year -- and this equates to $10 billion 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 world's most populated nation by 2030.

The number of households owning home Audio Visual (AV) products is also expanding. Currently less than 15 percent, it is set to rise to nearly 30 percent by 2012.

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.

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