In an interaction with The Industry Outlook, Manu Tiwari, Industry Principal, Industrial Practice, Frost & Sullivan explains how the Smart Appliances market is evolving and how new technologies are being implemented in the sector.
How do you see the current Smart Appliances market in India? What are the major factors driving its growth?
According to Frost & Sullivan's analysis, the smart home appliances market in India is set to generate revenues of around ₹245 billion by FY25 from ₹92 billion in FY20 growing at a compound annual growth rate (CAGR) of 21.6%. Smart televisions, smart air conditioners, and smart refrigerators are propelling the smart appliances market in India.
Major factors driving the growth are:
• Increased dependence on mobile applications
• Acceptance of new technologies by a growing young population
• Rising awareness about energy efficiency and eco-friendly solutions
• Easy availability of consumer financing benefitting the lower and middle-class population
• Dual-income family groups with high disposable incomes.
What are the major challenges thrown up by the pandemic and how are manufacturers addressing those challenges?
Major challenges in this sector include:
• A downtrend in consumption demand for smart appliances
- A sharp fall in volume demand of more than 40% YoY is expected in electronic products during the first quarter of FY21, according to industry experts. Smart appliances are still considered a luxury by the middle-class population and they will delay the purchase of smart products.
• Plant Closures
- Due to the temporary shutdown of factories, India has fallen back in smart appliances production in 2020.
• Supply chain disruption
- There is a shortage of components imported from China and ASEAN. Media reports indicate that the price of electronic goods is expected to shoot up to 5-10% due to supply chain disruptions.
• Clearance of old stock
- Disruption in supply has created a void in the industry; manufactured goods are piled up which is a key challenge due to less demand.
Manufacturers are addressing those challenges by putting on hold new product launches and expansion of new projects until the industry is back on the growth path.
What role is IoT playing in the evolution of Smart Appliances market? How can it bring the much sought after automation?
IoT (Internet of Things) has a penetration of around 5-6% in home appliances (according to industry estimates), which helps in monitoring, controlling, optimizing appliances, and ensuring comfort in usage, energy efficiency, and security.