Date : February 01, 2017
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Rural market is likely to offer a bright opportunity for washing machine players in India over the forecast period: Bonafide Research

Rural market is likely to offer a bright opportunity for washing machine players in India over the forecast period: Bonafide Research

Poor monsoon from last few years had adversely affected sales of washing machines in the rural markets. However, given the significant increases in allocation for rural spend by the government and a hopefully normal monsoon in the analytical year; players are now planning for stronger growth in rural areas.

India is an emerging economy and thus the domestic market is fast moving towards durable products. Consumer durables refer to those goods that do not quickly wear out and yields utility over a longer period of time. They can be broadly categorized into three heads namely white goods, brown goods and consumer electronics. White goods include products like air conditioners, refrigerators, washing machines, audio equipments and speakers. A washing machine is a machine to wash laundry, such as clothing and sheets. There are two types of washing machine; one is semi-automatic which requires manual intervention whereas other is fully automatic machine that does not require any manual intervention. Semi-automatic washing machines are always top loading whereas fully automatic machines can be top loading or front loading.

According to recently published report of Bonafide Research “India Washing Machine Market Outlook, 2027-28”, majority sales of washing machine comes from urban cities whereas rural penetration still stands at less than 13%. India is still an urban centric market with demand of products like washing machines being mainly triggered by the top 40 cities of the country. Although majority of the country’s population is residing in rural India, it represents only a fraction of sales in the total washing machine market. Such lower penetration of washing machines in rural market is now generating huge demand for first time buyers. This will prove as a big opportunity for players. India Washing Machine Market obtained market size of more than INR 10000 Crore in 2021-22.

The ratio of urban-rural demand is transforming on the back of growing consumption in rural markets. Rising rural income with higher non-farm income, increasing availability of power, growing product awareness through advertising and players launching customized products for rural consumers are the major factors which will support the growth in the next five years to come. Manufactures, especially domestic players like Videocon and Godrej, are increasing their distribution networks to rural towns so that they can tap these markets. Furthermore, players like Godrej have also come up with customized semi-automatic low cost machines which suits best for rural demand. Hence, rural markets are expected to post fast growth in future and their share in washing machine category is also expected to rise, just like what happened with refrigerators.

A good monsoon plays a very crucial part in generating the demand for consumer durables in rural Indian markets. From last three years, India has constantly witnessed back to back droughts and below normal rainfalls. The after-effects of poor monsoon dragged down rural growth and resulted in a stagnant washing machine market for rural areas. Companies agreed that the slump in sales growth in rural areas was largely due to a flagging, bottom-of-pyramid segment. However, forecast of a good monsoon in 2021-22 has made players hopeful and all strategies have been carried out to beef up the demand this season.

Major companies operating in the washing machine market of India are LG Electronics India Pvt. Ltd., Samsung India Electronics Pvt. Ltd., IFB Industries Ltd., Whirlpool of India Ltd., Videocon Industries Limited, Godrej & Boyce Mfg. Co. Ltd., BSH Home Appliances Private Limited, Haier Appliances India Pvt. Ltd., Panasonic Appliances India Co. Ltd. and Mirc Electronics Limited.

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Rural market is likely to offer a bright opportunity for washing machine players in India over the forecast period: Bonafide Research

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