The consumer durable industry is awaiting addressing of issues by the government. While it has seen a push from the Digital India and Make in India programmes as well as the government favouring FDI, the industry is hoping the government will address issues in import duty structures and free trade agreements that are rendering indigenous manufacturing uncompetitive.
In the consumer durable segment, the urban markets contribute 65% to the industry sales. The ongoing rural electrification program is expected to push up the demand for durable goods. The monsoon for the year has been normal, paving the way for a likely double-digit growth. The one kill-joy could be the creeping cost push coming from crude rates inching up. This may force the consumer durable players to look at a price increase. On a different note, a development to watch out for could be the entry of a big disruptor in the TV segment.
The double digit growths in consumer durable can come from creating a larger footprint in the semi-urban centres. Also, the players would look at building up warehousing and logistics efficiencies, considering GST gains and cost push pressures. The prospects of growth may result in organizational structure changes, in leadership and execution levels. Moreover, companies would look at talent for the back-end of business, including manufacturing, supply chain and even new product development and R&D.
Globally, the smart-phone shipments fell in the Jan-March quarter in 2018 and China was the biggest driver of this decline. In the same period, the market for overall mobile phones in India grew immensely, mainly led by 4G feature phones. The growth of smart-phone for the same period was flat. What is significant is that 96% of the smart-phones were assembled or manufactured locally coming under the Make in India program as per data from Counterpoint. With higher duties on CBU and PCBU, the market will further shift from SKD to CKD level manufacturing.
The phone device market will be grappling with the Chinese players competing with each other and the Indian manufacturers looking at protecting their falling shares. Talent with telecom and device understanding and a quick eye for the changing pulse of the market would be critical. Enterprise sales with relationship building skills with carriers and B2B business would be a highly desirable expertise.