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Consumer Durables
In Economics, a consumer durable is a commodity which does not quickly wear out, or more specifically, it yields services or utility over time rather than being completely used up when used once. Examples of durable goods include cars, appliances, business equipment, electronic equipment, home furnishings and fixtures, houseware and accessories, photographic equipment, recreational goods, sports equipment, toys and games.
This Financial Year:
With the growing preference among consumers for high-end, branded technology products the consumer durables segment is set to achieve a healthy double-digit growth in the future. Consumption of manufactured consumer goods is recognised as one of most widely accepted measures of standard of living and quality of life. The growth of the segment is expected to trigger high growth rates in basic goods and build the base for a robust growth of the entire manufacturing sector during the current fiscal, according to an analysis by FICCI. It confirms that consumer goods sector is poised for further growth because of emerging opportunities and strong fundamentals developing in the economy.
Growth Of Consumer durables Industry and relevance as a Career Option:
Globally it has been observed that as income levels rise, the share spent on food and grocery in the total household income declines and the proportion of income spent on lifestyle-related activities increases. Spending on consumer durables, apparel and lifestyle products have increased, both in developing as well as developed nations.
Growth in the consumer market has received further impetus by the fact that a large proportion of the consumers are in the 18-35 years age group with a propensity to spend. In the Indian context, the size of the market is currently estimated at 300 million, which is larger than the population of the United States and is expected to grow to 450 million before the end of the decade. The middle class forms the backbone of any economy. Besides this the higher income group is estimated to grow to 38.2 million in 2007 from 14.6 million in 2000 translating it to growth across all levels of society.
A few examples of growth of consumer durables in India as an industry indicating its relevance as a career options are as below:
Spending on mobile phones has more than trebled in the past three years, says Management consultancy KSA Technopak. Tele-density has increased from 8.8 per cent in January 2005 to 11.7 per cent at the end of January 2006. The total number of phones, as on January 31, 2006 was 130.8 million.
The passenger vehicle market (which includes cars and utility vehicles) crossed the coveted one million mark during the financial year 2004-05. India's domestic passenger car sales rose 8.34 per cent in January 2006 to 84,235 units from 77,744 units in the same month last year, according to the Society of Indian Automobile Manufacturers.
The white goods industry comprising air conditioners and refrigerators recorded a surge of 37.9 per cent in sales turnover for the quarter ended September 2005. Leading consumer durables players and experts predict a 10-12 per cent growth for the sector in 2006. Their confidence stems from the fact that calendar year 2005 saw a growth of 8-10 per cent in the US$ 4.7 billion sector, driven by high-end categories.
In 1995, just 2.6 million urban households in India could afford a mortgage. After eight years of rapid economic expansion, that number had rocketed to 20.5 million – a compounded annual growth rate of 29.4 per cent. The market is expected to grow by 30-45 per cent to a total value of up to US$ 77 billion by 2008, according to analysis by the IBM Institute for Business Value.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has painted a rosy picture on growth prospects for the consumer durables industry this fiscal. In a survey, FICCI has found that most of the consumer durables segments are set to see a double-digit growth in the current fiscal. It also points out that India offers a huge growth opportunity for consumer durables manufacturers. While the urban consumer durables market is growing annually at 7-10 percent, the rural market is zooming ahead with an annual growth of 25 percent.
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