Nearly a fourth of white goods sales seen going online by 2023

Chennai: The share of consumer durable sales through the online channel is expected to double in the next three years. Festive season sales have heavily contributed to the growth in the market share from 3 per cent to 11 per cent between 2013 and 2019.  

In 2013, online channel used to contribute just 3 per cent to the consumer durable sales and this has multiplied manifold to 11 per cent in 2019. Going ahead, by 2023, the share is expected to touch 22 per cent. However, still it will be well below the global average of 40 per cent, finds brokerage Emkay Global Financial Services.

Online white goods purchases are seeing a faster-than-expected rise on high affordability of smartphones along with increased use of mobile, internet, EMI schemes, hefty discounts, widening private-label product portfolios and lower product delivery lead times.

Private label products are available online at 30 per cent discount to the prices of established brands.

These established brands are also selling the goods 7-15 per cent cheaper online compared to offline with marginal product differentiation.

The increasing price differential between online and offline is enticing consumers to move toward e-commerce purchases as free delivery, installation and cash backs, along with Equated Monthly Instalment schemes, are also available on the platform.

White goods sales through online platforms have moved up at a faster pace over the last two-three years. Emkay finds that Diwali sales have contributed significantly to the online sales growth, growing by 56 per cent annualy (CAGR) between 2016 and 2019. Both Amazon and Flipkart have been witnessing consumer durable sales surging multiple times every Diwali season. The recent success of brands such as MI and One Plus is forcing offline brands to increase their presence on online platforms.

The purchase by consumers in non-metro and tier-2 and tier-3 cities have gone up sharply this season.

The number of women shoppers, purchase on EMI, credit and debit cards also have recorded growth.

Among consumer durables, television is the largest selling product, followed by microwave ovens, air conditioners and refrigerators.