Boston Consulting Group (BCG) and Google India today released a report ‘Digital Powers Consumer Durables: A $23 billion Opportunity by 2023’ which says that consumer durables industry will reach $36 billion by 2023. The report further says that $23 billion of this will be digitally influenced sale. The report states digital influence varies by product categories today with it being 33% for high average selling price (ASP) durables like ACs, Televisions, Refrigerators and Washing machines and 20% for lower ASP products like small appliances, water purifiers and microwaves.
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Capturing the growth of digital influence and key consumer insights in the consumer durables sector in India, Boston Consulting Group (BCG) and Google India today released a report, ‘Digital Powers Consumer Durables: A $23 billion Opportunity by 2023’. Projecting a healthy growth rate for Consumer durables (Televisions, Refrigerators, Washing Machines, Air Conditioners, Microwaves, Water Purifiers & Small Kitchen Appliances), the report states that overall Industry will see a growth of 13% to reach $36Bn by 2023.
The report defines a sale as a ‘digitally influenced sale’ if the buyer uses internet during any stage of purchase cycle. Today 28% of consumer durable sales is digitally influenced & this is estimated to reach 63% of total sales, amounting to $23Bn by 2023. $10Bn of this will be online sale.
The report states digital influence varies by product categories today with it being 33% for high average selling price (ASP) durables like ACs, Televisions, Refrigerators and Washing machines and 20% for lower ASP products like small appliances, water purifiers & microwaves.
Capturing rise in number of digitally influenced urban consumers, the report states that digital is increasingly playing an important role in consumers' decision to buy a product, and number of digitally influenced consumers have doubled over last 4 years. Digitally influenced consumers have increased 5X in tier 2 and tier 3 cities and digitally influenced women consumers have increased 10X over the last 4 years.
Decoding the digital consumer further, the report also highlights important consumer insights as buyers traverse through multiple online and offline touchpoints before making the final purchase. In the pre-purchase phase, approximately 80% of digitally influenced consumers are undecided about their choice of brand when they start their research and spend typically 2-3 weeks on research before making the final purchase. Search, social media, blogs and online videos are the key sources for online research. The report suggests that nearly 2 out of 3 digitally influenced consumers rate online reviews as a significant influencer in their purchase decisions.
Speaking about the key insights, Nimisha Jain, Managing Director & Partner, The Boston Consulting Group, India said, “18Bn of consumer durable sales will reside with digitally influenced consumers who are undecided on their brands in 2023. Companies will have a short 2-3 week window to influence them and ability to timely & efficiently influence them will determine the winners of the future. "
The report further says, during the purchase phase, low price, convenience and choice of multiple payment options are some of the largest drivers of online conversions. However, absence of in-person guidance and lack of ‘touch & feel’ are the biggest barriers. In the post-purchase phase, the report interestingly calls out that nearly 1 out of every 3 online buyers provides product reviews online post purchase and both, in-store digitally influenced buyers and online buyers look for other offerings from the same brand after completing the purchase
Calling specific actionable insights for the consumer durables players to seize this opportunity, Vikas Agnihotri, Country Director – Sales, Google India said, “Consumers are creatures of habit, and with growing access and connectivity, we are seeing consumers research online before they arrive at their purchase decisions for almost everything. And while businesses have started to build their digital presence, there is a need to take a holistic approach to digital as the scale of its influence has grown rapidly going well beyond top metros. Businesses need to create an always on digital strategy and create personalised interventions to tap different consumer demographics across all markets to achieve their business goals.”