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 (TVs, 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 the internet during any stage of the purchase cycle. Today 28% of consumer durable sales are digitally influenced & this is estimated to reach 63% of total sales, amounting to $23Bn by 2023. $10Bn of this will be via online sale.
Further, 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 a 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 the 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.
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.
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, the 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
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. “
Follow us on Twitter for more news and updates.