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Between January and August, Indians have spent $1.8 billion or Rs 11,060 crores to buy refrigerators. That's about 17% or $227 million more than what they have spent in the same period in 2013 - a result of extended summer, and muted monsoon, showed a study by market research firm GfK.
The growth this year is significant, considering that the growth was just about 5% in 2013. "The industry expanded only 5% in 2013 due to several factors such as currency fluctuations, hike in prices of materials as well as fuel which impacted consumer spending. The market has improved markedly and is on an uptrend now as the rise in average disposable income of households combined with changing consumer lifestyle is helping to drive growth, especially in the high-end segment," said Ushpreet Singh Bawa, account director (home & lifestyle), GfK in India.
But what Indian consumers buy? According to GfK data, affordable single door or direct cool refrigerators are the highest selling, accounting for three in every four units sold. Even this was the trend last year as well.
On the top end, there is growing demand for higher capacity frost-free refrigerators. Till August, GfK noted frost-free refrigerators with capacity more than 400 litres grew by about 25% in volume terms and close to 36% in value terms. But, the highest demand was for the side-by-side refrigerators that registered a growth of about 40% in the January-August period, GfK said.
On the other hand, festive season, like earlier years, is expected to fuel sales of appliances sales even this year. According to GfK, about 20 per cent of annual sales, especially in the top end, happened during Diwali last year. This, Bawa believes, would continue even this year.
Companies this year have been launching more top-end models. According to GfK's retail track for refrigerator was across Urban India, two of the three new launches were frost-free models and about 20% were above 400 litres.
Bawa, however, said that besides macro-economic and demographic factors, increased promotional activities by chain stores have been instrumental in driving growth of the high-end segment. With the penetration at the bottom, refrigerators as a consumer product segment can only trend upwards, which would also get a boost as companies tap the smaller cities faster, he added.
The refrigerator market in India is dominated by companies like LG, Samsung, Whirlpool and Godrej.
