BANGALORE: The consumer electronics market is one of the largest segments in the electronics industry in India. With a market size of USD$3.89 billion in 2006, catering to a population of more than 1 billion people, the consumer electronics industry in India is poised for strong growth in the years to come.

iSuppli Corp. predicts the Indian audio/video consumer electronics industry will grow to $6.59 billion by 2011, rising at a Compound Annual Growth Rate (CAGR) of 10.0 percent from $4.5 billion in 2007.

The growth will be aided by a multitude of factors, including:
Growing consumer confidence due to rising disposable incomes
Easy financing schemes that are making purchases possible
Increased local manufacturing
Expanding distribution networks
Sporting events, such as the Cricket World Cup.

The figure attached presents iSuppli’s estimates and projections for the size of the Indian audio/video consumer electronics industry for the period of 2004 to 2011.

Video remains the key driver
Television continues to be the mainstay of the consumer electronics industry in India with the transition slowly occurring to newer technologies such as Liquid Crystal Display (LCD) and Plasma Display Panel (PDP).

Most players in the consumer-electronics industry have introduced products in the Flat Panel Display (FPD) segment, and for few companies—especially the Korean chaebols—FPD remains a focus area. But the Indian market continues to exhibit contradictions that may be unique to this market. On one hand, campaign promises have prompted the free distribution of 7.5 million 14-inch CRT television sets worth USD$75 each to families below the poverty line in one electoral state over the period of three years.

On the other hand, FPD sets are available for USD$3,000 in India. Although, black and white televisions are obsolete elsewhere in the world, they still sell in large numbers in India.

Increased customization to suit domestic demand
Companies are focusing on customizing products to suit Indian tastes, thereby creating a niche for themselves. Several companies are conducting market research in order to understand the psyche of an Indian consumer. The inputs from this research are determining product attributes and pricing and accordingly are achieving better acceptance among consumers.

By conducting consumer research, companies are trying to identify customer requirements, thereby incorporating specific design elements into their products. For example, LG in 2006 launched a range of televisions from 21 inches to 29 inches in size that were designed based on the company’s research on consumer preferences for television sets.