By 2023, 63% consumer durable sales in India to be digitally influenced: Report

Boston Consulting Group (BCG) and Google India on Tuesday released a report ‘Digital Powers Consumer Durables: A $23 billion Opportunity by 2023’ to capture the growth of digital influence and key consumer insights in the consumer durables sector in the country. 

Projecting a healthy growth rate for consumer durables, the report states that overall the industry will see a growth of 13 per cent to reach $36 billion by 2023. 

The report defines a sale as a ‘digitally influenced sale’ if the buyer uses internet during any stage of the purchase cycle. Today 28 per cent of consumer durable sales is digitally influenced and this is estimated to reach 63 per cent of the total sales, amounting to $23 billion by 2023. Of this, $10 billion of this will be online sale.

Report states digital influence varies by product categories today with it being 33 per cent for high average selling price (ASP) durables like ACs, Televisions, Refrigerators and Washing machines and 20 per cent for lower ASP products like small appliances, water purifiers & microwaves

The report states that digital is increasingly playing an important role in the consumers' decision to buy a product, and the number of digitally influenced consumers have doubled over the 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. 

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: “18 billion of consumer durable sales will reside with digitally influenced consumers who are undecided on their brands in 2023. Companies will have a 2-3 week window to influence them and ability to timely and efficiently influence them will determine the winners of the future.”

The report further says that 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.

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.”