Sales in the year 2018 have been an all-time low for the consumer durable business. Post-demonetization and implementation of GST, the market witnessed a steep decline and this slowdown is still haunting the makers. Fluctuating commodity prices and currency exchange rates led to consumers holding back from purchasing large appliances like refrigerators. Due to delayed summer and sluggish festive season of Diwali, the market witnessed a huge inventory.
The technology trends in the refrigerator segment have witnessed some important innovations over the last century. Though once a luxury, thanks to the liberalization and boom of the Indian economy, it is now an indispensable appliance in the Indian household. Rising demand has also propelled the manufacturers to come up with path-breaking innovations to improve the utility of the refrigerator. Manufacturers are now focusing more on the higher energy-efficient inverter-compressor refrigerators. Big brands offer a convertibility option, which allows the freezer to be converted to the fridge or gives an option to even shut down the freezer/fridge compartment altogether. The modern refrigerator comes with strategically placed cooling vents, which ensure cool air inside the refrigerator is circulated in a uniform manner, so there is no discrepancy in cooling.
Refrigerator industry faces many challenges as well as ample opportunities to grow. Demand for refrigerators has accelerated with rising disposable incomes and easy access to credit or simple financing schemes. Rise in electrification of rural and semi-urban areas and increasing popularity of online sales also provides the requisite impetus. Rise in working-age population and favorable population composition stimulates the demand of refrigerators. Some of the start-ups have come up in this space and offer appliances on rentals. An opportunity in India is envisaged in the huge rural and semi-urban untapped market with substantially lower penetration of consumer appliances, compared to other countries. Emerging rural areas have a great potential for appliances like refrigerators and related products. Modified special incentive package schemes have been introduced. Advancement in technology and stiff competition are driving price reductions. With the initiative of Make in India campaign, many domestic and Chinese manufactures are investing in India to set up their manufacturing plants, which would churn out more affordable products.
Price trends with respect to commodity pricing and currency exchange rates are now stabilizing, and refrigerator sector is expecting stability in pricing. Also, with increase in production capacity of existing manufacturers and upcoming Chinese factories, the price war is expected to heat up, thus benefitting the end consumers.