More and more urban consumers are demanding fully automatic washing machines because of their reduced prices, compact designs and no manual intervention required which ultimately leads to time saving. Sales of semi automatic machines will reduce in urban areas whereas rural markets will still generate some demand due to their low prices and unawareness among consumer.
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 can be top loading or front loading.
According to recently published report of Bonafide Research "India Washing Machine Market Overview, 2016-2022", the fully automatic washing machine market of the country is expected to grow at a CAGR of more than 17% in the next five years. There is a trend of premiumization in the market, where urban consumers are going for fully automatic machines rather than semi-automatic ones. A fully automatic washing machine works all by itself with no manual efforts required, which makes the product more convenient and price worthy. Decreasing price difference between semi-automatic machines and fully automatic top loaders have made this shift painless as urban consumers are finding it easy to upgrade to more technological advanced machines. Not only the replacement buying is in favor of fully automatic machines, but first time buyers are also interested towards these products.
The washing machine now signifies both convenience and status for an urban household. With the uninterrupted inflow of disposable incomes and the development of product technology, the demand for the fully automatic machines is growing fast. Also, financing schemes have enabled consumers to use their future income streams to buy these expensive machines upfront and pay in installments over a period of time. Implementation of GST, advanced technology and fierce competition among players to maintain their position is expected to further decrease the prices of fully automatic washing machines and this will lead to increased demand. With the GST constitutional amendment bill passed by the Rajya Sabha followed by some state legislatures, the government plans to implement GST from April 2017. GST will be beneficial to the consumer durable industry as the companies currently pay taxes in the range of 20-25% which is likely to come down. The logistics and inventory handling costs for the companies is also expected to decline. All this would lead to lower prices for the end consumer, thereby resulting in higher demand for the players.
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 and Godrej & Boyce Mfg. Co. Ltd.