Battling for a Larger Market Share

While each and every brand is making a splash with its new models, it is not easy to increase market share in this hugely competitive segment.

Washing machines have softly and slowly found their way into Indian households, and have now become a necessity in the daily lives of people. Demand has been fuelled, like other home appliances in the country, by the availability of innovative models from domestic and global brands, increasing disposable incomes, increasing investment by the government in infrastructure, and a changing household arrangement.

Indian Market Dynamics
The Indian washing machines industry is significantly under-penetrated. Over the next 5 years, with rising disposable incomes, increased urbanization, improving rural electrification, rising affordability, increased apartment living, a shift toward nuclear family model, this graph can only look upward. Prices have been steadily falling and preference shifting toward fully automatic models, with top models being preferred over their front-loading counterparts. The rollout of GST, once the dust settles down, is also expected to provide impetus as the tax levels fall from the current 25 percent. Also GST will provide an opportunity to the manufacturers to optimize the supply chain, improve productivity and thus lower costs.

The Indian market for washing machines in 2016-17 is estimated as 6 million units, valued at `7760 crore. Value-wise the fully automatic segment dominates with a 61 percent share, whereas volume-wise the semi-automatic machines continue to be preferred and hold a 58 percent share. The consumer is gravitating toward larger capacities, as a single load washing is increasingly being preferred. Dryers,  machines for the sole purpose of drying clothes are virtually non-existent in the Indian market as of now.

LG continues to dominate this segment, in volume terms, while Samsung has gained share since last year. Videocon family of brands and Whirlpool have aggressive presence. Godrej continues to ride high on its stainless steel model, and IFB dominates the front-loading segment. Haier, Panasonic, Intex, Vestar from Eltech Appliances, Onida, Lloyd, Siemens, and Bosch also have presence in this segment.

Dixon is one of the largest ODM players in India. The vendor’s positioning is a one-stop solution from design to development to new model launches continuously. The other large OE vendor for washing machines is Noble.

While the urban consumer is upgrading the semi-automatic model with a fully automatic one, the rural consumer is also looking at it as a must have home appliance. Indigenous, regional players have turned their focus toward rural areas as urban markets are dominated by the multinationals. The consumer is spoilt for choice as there is no shortage of products and the market is flooded with numerous brands, at various price points, presenting a huge variety of models to choose from.

The Bureau of Energy Efficiency (BEE) has put washing machines under the voluntary scheme of its energy star rating program. BEE’s schedule for star rating of washing machines specifies 317 wash cycles a year for the calculation of annual energy consumption of domestic washing machines. Further, for the specified sample of soiled clothing, the schedule states that three wash cycles are needed for satisfactory soil removal from the cloth. For cold wash cycles, the water temperature is maintained at 27±1°C. For all tests, except the energy-consumption test, the water temperature is maintained at 48±2°C for semi-automatic and top-loading fully automatic washing machines. For front-loading fully automatic washing machines, the corresponding temperature is maintained at 50±2°C.

Global Scenario
The global washing machines market is expected to reach USD 42.16 billion by 2025, according to Grand View Research. With the industry for smart appliances expected to take off in the coming years, washing machines account for a majority of the global smart homes appliances market, and washers and dryers have a combined 30 percent share of the global market. The fully automatic washing machines industry is expected to be the fastest-growing segment owing to the growing shortage of time for household chores. The demand for washing a large volume of load is providing traction to the growth of the washing machines having capacity of over 8 kg. The residential sector is anticipated to grow at a CAGR of over 5 percent owing to the transition from semi-automatic to fully automatic washing machines. Emphasis on R&D is a major strategy adopted by the key players to generate financial profits and address the environmental and social issues through technologies and products.

The Asia-Pacific region has a strong presence of consumer appliances manufacturers, especially in countries, such as Japan, Korea, China, and Taiwan. This has resulted in availability of such advanced appliances at relatively affordable rates and has subsequently propelled the demand in this region. North American countries such as Canada and the US are experiencing an upsurge in replacement activities for their semi-automatic models, fueling the demand in this region. MEA is also witnessing strong growing demand, especially from the UAE and Saudi Arabia.

Technology Update
Continuous product innovations have led to the development of advanced washing machines that increase comfort levels and convenience for users. Companies are coming up with advanced, innovative features. Introduction of smart washing machines has led to a major increase in demand. Wi-Fi is being extensively used in smart washing machines, while near-field communication is also being explored to establish radio communication with smartphones and to bring them in proximity. Smart technology is enticing a portion of the customer base to replace their old machines with smart connected counterparts. Smart washing machines have gradually started penetrating into the market. Leading players have incorporated several sophisticated technologies in their washing machines in a bid to differentiate their products from competition and consolidate their customer base. The push by regulatory and government authorities to adopt smart devices is also contributing to overall growth.

Features such as auto optimal wash, smart control, eco-check, smart diagnosis, smart nudges, automatic detergent dispensing, power wash system, and steam care functions have been launched. Many models are also incorporating self-cleaning elements. These features often use soaking and high-speed spinning to clean them without the use of chemicals. Sixth sense is one among the innovative technologies used in washing machines. The capabilities of the machine acquire a whole new dimension with the help of this technology, which will induce a common sense into the system and thus help it in becoming more user friendly. The built-in sensors measure the load, spin speed, and water temperature, and the automatic controls regulate various inputs. Another similar technology used in washing machines is fuzzy logic. This technology makes the machines completely automatic. The technologies limit human intervention and thus the monitors and sensors determine different inputs automatically. This helps in reducing wastage. Speed is of essence. Programs with quicker cycles but running similar efficiency are being added. Considering consumer’s busy lifestyle many appliance makers are introducing speedy cycles/quick programs. The segment is living the twin-drum age – be it twin washers or washer and dryer below one another.

The latest technologies also help in reducing the usage of materials such as detergents and softeners. The quality of water used is also monitored. The hardness of water is determined. The exact time required for washing and drying the clothes is determined by the sixth-sense technology. This helps the users to time themselves properly and indulge in multiple activities. Consumers are getting options to add clothing mid-cycle, lower energy usage, optimize wash cycles, and control cycles remotely. Some sensors help in determining the quality of detergents and the perfect water temperature according to the texture of clothes loaded in the machine for washing. Air refresh technology is also among the most popular technologies used in the washing machines. This technology initiates the induction of fresh air into these machines and heating the air too. Washing and drying of clothes is done with the help of this air and steam. The sole aim of these technologies is to make washing machines more user friendly. Features in washing machines such as auto optimal wash, smart control, eco-check, smart diagnosis, and smart nudges have been introduced by some brands.

Strong Distribution Channels
Vendors are emphasizing on developing holistic distribution channels to cater to all types of customers. Investments in supply chain management strategies along with enhancement in product assortments have been noted in recent times.

Players are also launching informative and interactive websites to enhance customer reach. These websites provide expert advice on the use of products along with product promotions.

Before purchasing products, most consumers now prefer researching about product features and conduct a thorough price comparison. Another advantage of online shopping is the opportunity to voice opinions about products while gaining an opportunity to read customer reviews in order to make informed decisions prior to the purchase.

Outlook

Increasing disposable incomes and easy financing options have led to shortened replacement cycles, whereas rising influence of modern lifestyle has perceived washing machines as utility items rather than luxury goods. The rural consumer is also excited about this product and the brands are making inroads into semi-urban and rural areas. With a 10 percent penetration, this household appliance is expected to see growth in the vicinity of 10–15 percent every year.

Based on market research conducted by TV Veopar Journal in July 2017.