growing traction for smart appliances market in india

GROWING TRACTION FOR SMART APPLIANCES MARKET IN INDIA

Smart appliances are appliances that are connected via Bluetooth/Wi-Fi/other technologies and are controlled or monitored through remote commands using a smartphone, a tablet or any other device. IoT (Internet of Things) has a growing penetration in home appliances such as air conditioners, televisions, refrigerators, washing machines and others. IoT helps in monitoring, controlling, and optimizing appliances and ensuring comfort in usage, energy efficiency and security.

Smart appliances’ current penetration is 5% in India, which is expected to reach 12% by FY24. Growth of the smart appliances market in India will be driven by the more than 500 million smartphone users in India, mobile connectivity and easy-to-install applications. LG Electronics, Samsung, Whirlpool and Panasonic are some of the key players in the smart appliances space in India.

Urbanization and digitization are the key macro trends influencing the Indian smart appliances market. Technological advancement in smart appliances has emerged in the last few years. Instead of manually operated remote controls, smart appliances can communicate through voice assistants such as Google Home, Alexa (Amazon) and Siri (Apple). The smart appliances market in smart homes is estimated to witness a CAGR of 12%-15% in the next five years. Due to the COVID-19 crisis, the market might see a subdued demand in the short term with demand dropping by 20%-30%, but in five years the CAGR is likely to remain unaffected.

OVERVIEW

GROWING TRACTION

KEY TRENDS

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SMART AIR CONDITIONER

DESCRIPTIONAir conditioners (ACs) with additional features such as Wi-Fi-enabled technology are finding greater acceptance as they allow the temperature to be controlled from any place using a mobile application.

ADVANCEMENT IN TECHNOLOGYSmart ACs have sensors that can sense occupancy in a room and provide the required cooling, ensuring energy efficiency. Smart ACs connected to a mobile network can help in proactive service requirements by alerting the service team immediately in case of any fault in the system. Smart ACs also include adaptive pairing with voice-controlled devices.

FRONTRUNNERSBrands like Samsung, Bluestar and LG have advanced features like smart cooling, bio-sleep, sensor technology and app controls, which have been their Unique Selling Proposition (USPs) in attracting customers. Along with these features, Voltas has in-built voice-enabled technology to control on off and change the temperature using voice command in English or Hindi.

RECOMMENDATIONAs customer preferences change, AC suppliers should focus more on technology-driven features to satiate the “comfort” needs of customers. They also need to have a stronghold in R&D, which will enable innovations and new features. With increasing prominence of green buildings, smart buildings, and smart cities, the demand for energy-efficient air conditioners is expected to grow; hence, the need to focus on energy-efficient technology.

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SMART REFRIGERATOR

DESCRIPTIONSmart refrigerators are in a nascent stage and will gain traction. Domestic refrigerators, with 35% penetration in India, are predominantly bought by customers based on their capacity and cooling requirements. Smart applications in refrigerators are “good to have” additional features, available only in high-end refrigerators, which are priced at a premium.

ADVANCEMENT IN TECHNOLOGYSmart refrigerators are offered with a touchscreen interface and can connect to the internet through Wi-Fi or Bluetooth. Also, there are new features available with internal cameras and remote-controlled cooling, operated with the help of a mobile phone or tablet, even outside the home. This helps consumers conserve energy.

FRONTRUNNERSLG and Samsung are at the forefront, introducing smart refrigerators that allow users to compile shopping lists, keep schedules, and even watch video clips.

RECOMMENDATIONThis is an emerging market in terms of penetration. Smart refrigerators are expected to witness growth in revenue once demand increases in the next two to three years. Smart refrigerators offer tremendous convenience and efficiency. Though new to the Indian market, Frost & Sullivan recommends OEMs introduce smart features to have a competitive advantage.


SMART TELEVISION

DESCRIPTIONSmart television (TV) includes a high-end processor chip and an embedded operating system that supports internet connectivity (wired and/or Wi-Fi). The smart TV segment in the Indian market is growing at a rate of 25%, which is mainly driven by budget smart TVs.

ADVANCEMENT IN TECHNOLOGYThe sharing of content between TVs and mobile devices over Wi-Fi, Bluetooth, and near-field communication (NFC) is rapidly growing. Recent developments show that they can also be connected to devices such as lights, fans and security systems, making them a great option for home entertainment.

FRONTRUNNERSSmartphone makers such as Xiaomi Mi and OnePlus have entered the smart TV market in India, disrupting the market share of leaders such as Samsung, LG and Sony.

RECOMMENDATIONAlthough penetration of smart TV is still low in India, it offers a highly attractive consumer base. India is among the top three countries in the world in terms of its volume of television households and internet users. Hence, this market is too lucrative for investors to ignore.


SMART GEYSERS

DESCRIPTIONGeysers/water heaters are among the fastest-growing home appliances with 10.5% CAGR. There is an increasing demand for smart functionality features in water heaters from tech-savvy consumers. The introduction of new technologies is likely to make geysers more efficient and environmentally friendly.

ADVANCEMENT IN TECHNOLOGYSmart geysers with multi-function smart digital displays and smart functionalities are being adopted by a few players in India. Connectivity and remote access to geysers aided by IoT technology enhance and improve the consumer experience. Smart geysers alert customers when they reach the set temperature and send regular energy consumption notifications. Various companies and brands are working on water heaters with intelligent functions.

FRONTRUNNERSV-Guard, Orient and Racold have launched an app-enabled water heater with IoT connectivity and cloud-based functionality. Brands such as AO Smith, Bajaj and others have smart sensors to monitor the required temperature and a cut-off timer to save energy.

RECOMMENDATIONCompanies must have remote and app-controlled features embedded in the water heaters. Companies should launch Wi-Fi-enabled smart water heaters that can be connected to users’ smartphones, tablets or PCs, allowing them to control the functioning of the water heater from anywhere for better efficiency, control and comfort.


The introduction of smart technology across appliances has created an internet-enabled ecosystem. High-speed internet encourages end-consumers to purchase smart and connected products. Considering the large population size in India and concentration of technology-savvy users in urban centers, smart applications are likely to have high uptake in urban centers in the near future. The trend will soon spread to semi-urban and rural regions, thus broadening the available market for smart devices.

OEMs need to focus on various technical aspects. Companies should invest more in R&D to not only be a part of the growth story but to drive it. It is important to understand the demographics that look for smart devices and target the desired segment with the right technology features. Customers see significant value in post-purchase services offered by the companies. Hence, after-sale services will play an important role, and companies need a skilled workforce to address issues quickly.

All four appliances have high potential for growth as technology advances and penetrates further into day-to-day life. Metro cities will take the lead, and demand will increase in pan-India.

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growing traction for smart appliances market in india

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