Tech & Durables Sector brings Positive momentum in Q3 2024: NielsenIQ
Tech
& Durables Sector brings Positive momentum in Q3 2024: NielsenIQ
·
Tech
& Durables offline retail market in India registered 10% value growth
(Jan-Sep'24) and 6% Value Growth in Q3 2024 (July – Sep’24)
·
Consumer
Demand Shifts Toward Premium Features and Sustainability, value growth driven
by the appliances and telecom market
·
Town Class 3 witnesses a 9% YoY value growth in
Q3 2024, outperforming Town Class 1 & 2
Delhi/Mumbai-
22nd November 2024: NielsenIQ (NIQ), the world’s
leading consumer intelligence company, has released its State of Tech &
Durables (T&D) Report powered by GfK intelligence. According to the report,
the Tech & Durables market showed improved dynamics in 2024.
The first three quarters of 2024 (Jan-Sep)
presented a mixed picture for the Global Tech & Durables (T&D) market.
As consumers moved from cautious to intentional spending - sales value growth
turned positive for smartphones, while all other sectors experienced negative
growth, leading to the overall market being flat over previous year.
In contrast, the Indian T&D offline retail
market registered a 10% value growth (YoY, Jan-Sep 2024), while volumes
remained flat. Consumers have increasingly gravitated toward products offering
convenience, connectivity, and sustainability. The flat volume growth, however,
signals a significant shift toward premium, feature-rich products providing
more than just basic functionality.
"The
Indian T&D market remains strong, driven by consumers' demand for higher-end
products with sustainable features," said Anant Jain, Head of
Customer Success – Tech & Durables, NielsenIQ. "This growth is fueled
by the shift toward connected, feature-rich appliances and smartphones, with a
clear preference for products that offer both convenience and long-term value.
The festive period also contributed to this growth, with more consumers timing
their purchases to benefit from promotions and special offers."
Chart 1: Premium Segment Vs Category Total
Growth % | ASP INR Premium Segment
Source:
NielsenIQ-GfK T&D Market Intelligence, Offline Retail Sales - Jan-Sep'24 vs
Jan-Sep'23
The Indian growth story continues in Q3’2024
(July-September)
In Q3
2024, the offline retail market for Tech & Durables saw a 6% value growth,
driven largely by the appliance sector. Telecom, the largest contributing
category, recorded 7% value growth in Q3 2024 compared to Q3 2023. This uptick
signals that consumers are opting for more expensive, feature-rich, and
5G-enabled smartphones. The IT category witnessed 5% volume growth and 2% value
growth in Q3 2024. Consumer electronics also posted both volume and value
growth during this period.
The
large format retail channels saw significant traction in Q3’24, contributing
37% to the overall T&D market.
Chart 2: T&D Sector Growth (Volume % & Value %)
CE (Consumer Electronics)= Panel Television,
Audio Home Systems; MDA (Major Domestic Appliances)= Air Conditioner,
Washing Machine, Microwave Wave, Refrigerator, Dishwashers; SDA (Small
Domestic Appliances) = Air Cooler, Air Purifier, Elect. Water Heaters, Food
Preparation, Hair Dryers, Hair Stylers, Irons, Juicers/Presses, Rice Cookers,
Shavers, Vacuum Cleaners, Water Filters;
Telecom = Smartphones + Feature Phones, IT = Laptop ,
Media Tablets, Desktop, Monitors, Printers, Storage
Source:
NielsenIQ-GfK T&D Market Intelligence, Offline Retail Sales – Jul-Sep'24 vs
Jul-Sep'23
Smaller
cities driving growth
Smaller
cities are emerging as key growth engines for India’s T&D market. In Q3’24,
Town Class 3 witnessed a 9% YoY value growth, surpassing Town Class 1 (6%) and
Town Class 2 (5%) cities. Town Class 4 and above also showed a 3% value growth,
where media tablets grew by a whopping 90% in Q3’24.
Factors such as rising incomes, greater internet
penetration and increased aspirations are driving consumers in these cities to
spend more on everything from essential goods to premium products. For brands
aiming to expand, tapping into this growing demand is not just an opportunity
but a necessity to stay competitive in India’s dynamic market.
Chart 4: T&D Sector Growth by Town Class
(Value %)
TC1: 1 Mio.+; TC2: 1Mio.-500K; TC3: 100K-500K; TC4,5
& 6: <100K
Source:
NielsenIQ-GfK T&D Market Intelligence, Offline Retail Sales – Jul-Sep'24
vs Jul-Sep'23
Opportunities
for 2025: Innovation in Product and Touchpoint
NIQ’s 2024 Mid-Year Consumer Outlook revealed that 67% of surveyed urban consumers
in India are more likely to try new products when they are both affordable and
innovative. Sustainability is a key demand driver, with 70% surveyed consumers
willing to purchase an affordable product if it is also sustainable, including
being energy-efficient and cost-effective to run.
Consumers
are increasingly shopping across multiple channels, and 36% of global T&D
revenue now comes from online sales, up by 0.4% year-over-year in H1 CY 2024. As
per NIQ GenZ Global study, Gen Zers begin their shopping journey online, with
53% saying that they have used “buy” button on social media networks. Another
important point is that large section of them end buying in-store proving that
Gen Z are more “omni” channel shopping generation, hence important for
manufacturers and retailers to enhance their omni-channel strategy.
The
Direct-to-Consumer (DTC) model continues to offer growth potential, driven by
consumers' desire for better after-sales support. According to gfknewron
Consumer data, consumers value quality product setup, returns, repairs, and the
expertise of knowledgeable staff offered by DTC brands.
As the
T&D sector evolves, product innovation and touchpoint innovation
will be essential for sustained growth.
About
NielsenIQ (NIQ)
NielsenIQ
(NIQ) is the world’s leading consumer intelligence company, delivering the most
complete understanding of consumer buying behavior and revealing new pathways
to growth. NIQ combined with GfK in 2023, bringing together the two industry
leaders with unparalleled global reach. Today NIQ has operations in 95+
countries representing 97% of the world’s GDP. With a holistic retail read and
the most comprehensive consumer insights—delivered with advanced analytics
through state-of-the-art platforms—NIQ delivers the Full View (TM).