White goods are the goods that are painted white or enameled white. These products were previously manufactured with a white enamel finish but are now colored. White goods sector in India is characterized by emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in White goods segment is 65%. MNCs mainly target the growing middle class of India. MNCs offer superior technology to the consumers; while the Indian companies compete on the basis of firm grasp in the local market, their well-acknowledged brands, and their hold over wide distribution network. However, the penetration level of the consumer durables is still low in the market. The major factor responsible for low penetration is poor government spending on infrastructure. White goods include household appliances, such as, Water Heater, Refrigerator, Clothes Dryer, Air Conditioner, Dish Washer, Microwave Oven, Washing Machine etc. In the modern period, these products are available in a variety of decorator colors. White goods do not include the entertainment appliances, such as, Televisions, Home cinema, Camcorders, CD, and DVD players. These products are included in the Brown goods category. Practical skills are needed to maintain White goods and heavy tools are required to repair them, while Brown goods require high technical knowledge, in service area. White goods appliances account for 70% of the energy consumed in homes and their greenhouse gas emission levels are usually high. LG Electronics India Ltd., Samsung India Ltd., Whirlpool, Videocon are the some of the major players in the White goods sector. Large multinational companies in the world - including Electrolux, Whirlpool, Samsung, LG among others - has set up production facilities in India to manufacture home appliances, some of these companies are outsourcing their R&D and design and innovation cells to India. Foreign investment in the white goods sector in India has proved beneficial in not just raising Indian manufacturing standards to global ones but it has also led to a tremendous improvement in quality of products and productivity of employees. The overall trend towards higher foreign participation in this sector has also translated into government reducing levies and duties. For instance, duties on air conditioners have come down to 16 per cent from the all time high of 40 per cent. Besides consumers have benefited hugely as they now have products that meet global quality standards as well as offer more consumer-friendly features such as energy efficiency.
Indian White Goods Market
Indian white goods market has very high potential with a large pool of middle class ,growing upper middle class and upper class, however if we compare this market with China India is nowhere near China. Indian markets for most appliances are simply not large enough. Color televisions and refrigerators, to some extent, have volumes on their side: a 10 million CTV market and a 3.7 million market for refrigerators. But the numbers are still small in the majority of the other product segments like washing machines (1.6 million), air conditioners (1.2 million), microwave ovens (650,000). India's competitive advantage in manufacturing lies in products with mechanicalelectro-mechanical features. India can capitalize on its large pool of workers to leverage its labor cost advantage. As a result, India has emerged as a world leader in the manufacturing of auto components. In electronics and plastics India is simply not competitive on input costs. Until this deficiency is overcome, India will have to
continue to i manufacturing.
ort electronic and plastic components for use in appliance
To grow t e domestic market for appliances, a number of barriers have to be overcome, including unavailabilit of cheap and reliable power in rural areas as well as in many of the urban areas; lack of infrastructure and poor condition of roads. Purchasing power of a vast majority of the Indian population too continues to be low and therefore is a major barrier in terms of growth of demand. The problem of poor infrastructure dogs industries as well. For instance, one of the major reasons for Electrolux pulling out of India was the fact that two of its factories were located in areas that had very bad roads and the power situation was abysmal. The accelerating costs of transportation became an unviable proposition for the company. Therefore it is necessary that the government take up immediate steps to improve infrastructure and ensure that industries have access to reliable power supply that is reasonably priced. As the Indian economy integrates into the global economy, purchasing power is bound to grow. With almost a million new homes being added as potential buyers of appliances every year, the industry is banking on big time growth in the not too-distant future. As domestic consumption grows, the industry is bound to develop further and attain global competitiveness. So, for instance, if nanotechnology is likely to play a big role in the future in appliance -manufacturing, India needs to invest more heavily in this field so that it has appropriate human resources, technology and other resources to benefit from this and take the Indian white goods industry into the next level of technological up gradation. Suh a national strategy would help in quickly enhancing India's global competitiveness in this sector. (below data source: www.i .com)
production in laks unit Refrigerator Washing machine Micro wave oven Air-conditioner 2004 37 13.55 2.75 9.8 2005 38.85 16 3.5 12.25 2006 42.74 17.6 4.38 15.3 2007 47 19.4 5.5 19.1 2008 52.64 21.45 6.6 22
% Growth in white goods production
60 50 40 30 20 10 0 2003 2004 2005 2006 2007
Refrigerator Washing machine
Micro wave oven Air-conditioner
Source: Data monitor, http- Static.scrib .com
% share of consumer electronics in India
SOUTH KOREA 10% rest of ASIA PACIFIC 13%
JAPAN 39% CHINA 32%
Indian consumer Electronics market value
20 15 10 5 0 2002 2003 2004 2005 2006 2007
$ billion % growth
Source: Data monitor, http- Static.scrib .com The Indian consumer electronics market generated total revenues of $4 billion in 2007, this representing a compound annual growth of 10.36% for the period of 2002 2007.In comparison, the Chinese and Japanese markets grew with CAGR of 11. % 8 and 15.7% over the same period, to reach respective values of $17.6 billion and $ 20.5 billion in 2006. The performance of the market is to forecast to accelerate with an anticipated CAGR of 5.4% for the 2007- 2011 period expected to drive the market to a value of $ 4.9 billion by the end of 2011.Comparitively, the Chinese and Japanese markets will grow with CAGR of 9.2% and 7% over the same period, to reach respective values of $27.4 billion and $ 28.6 billion in 2011.