Indians, in general, tend to choose repair over replacement. Most city streets can be seen dotted with electronics repair shops, and swarming with clients. From consumer electronic products like mobile phones to televisions and laptops, one can easily find a repair hub in every city. Being natural recyclers, we like to extend the lives of our products, and an organised approach towards it presents an opportunity.
However, India has been rather slow in exploring the business potential of the electronics repair market. It needs to tap the enormous repair skill pool that already exists in both the formal and informal sectors. The need of the hour is to provide these technicians, most of whom have learned on their own, formal training through Indian Technical Institutes (ITIs) and Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
Electronics repair can be one of the largest and fastest-growing sectors in the coming years. A study by the Manufacturer’s Association of Information Technology (MAIT) indicates that the electronics repairs market can help create over 5 million jobs and generate a revenue of $20 billion per annum.
An increase in digitisation, a rise in demand for consumer electronic goods and the high cost of repairs in developed countries are some factors that can help drive the sector’s growth. And since India’s electronic repair costs are exponentially lower due to competitive labour costs, we should strive to build several ERSO (Electronic Repair Service Outsourcing) start-ups over the next few years.
Another critical factor that can help promote the growth of the sector is the ‘turn around time’ (TAT). How fast one can import, repair and ship a product to a customer will eventually determine how popular India can become as a repair destination globally. To enable TAT to be as low as 5-6 days, the government should invest in much-needed infrastructure and dedicated cargo ports, besides developing the shipping infrastructure. Furthermore, the current custom processes must be streamlined to enable a smooth logistics channel/corridor.
It is estimated that the global electronics market is approximately $3 trillion. Considering an average product life of three years, roughly $9 trillion worth of electronic products are in use at any point in time.
If we estimate just 4 per cent out of this as warranty cost, we have a figure of $350 billion. If the spare parts are 50 per cent of the warranty cost, that is, $175 billion, and repair costs are 40 per cent of the spare part cost, India can easily aim at a conservative share of 30 per cent of the global repair and calibration market, which roughly translates into a $20 billion industry in just the next five years.
Creating new skills and jobs
India produces more engineers in IT than most countries around the globe. The government needs to encourage entrepreneurs to get into this segment, as it will not only benefit them but will also contribute to building a sector that might be valuable in the future.
ERSO encompasses not only the electronic repair service industry but also has the potential to galvanise a knowledge economy around it. A vital part of the knowledge economy is the continuous raising of standards. For that, we need institutions and trainers to teach our youth the repair skill. In turn, we would also generate jobs for these institutions’ trainers, staff and faculty members.
One of the benefits of increasing knowledge of the repair ecosystem is that it can also predict failures and prevent them from occurring in the future. The government can look at facilitating the establishment of institutions like the ‘Repair Club of India’.
Furthermore, with the rapid growth in consumer electronics manufacturing, e-waste management is becoming a growing concern for India and the world. A significant advantage of a repair-led economy is that it helps sustainable development and reduces e-waste. To create a conducive electronics repair ecosystem, the government can address the growing concern of e-waste management with ERSO policies and practices.
ERSO should be perceived as the future of not only repair but also innovation in India.
The guest article by Nitin Kunkolienker, President Emeritus, MAIT was first published in Hindu BusinessLine