India LED Lighting Market Outlook, 2022

UJALA - A REVOLUTIONARY GOVERNMENT SCHEME, THAT IS LEADING THE INDIAN LED LIGHTING MARKET ON A SHEER GROWTH PATH: BONAFIDE RESEARCH

In 2015, with the target of replacing 770 million traditional lamps by the year 2019 Indian government already laid the foundation for tremendous growth of LED lighting market in India. With nearly 20 crore units sold under UJALA scheme in just 2 years, the overall LED lighting market has got a major breakthrough in terms of growth. Government is procuring all these units in bulk from the private players and is providing at a lower rate to the citizens. Hence, this scheme has emerged as a win-win solution for the manufacturers as well as the consumers.

In the initial stage, when the LED lights were introduced in the market it was very troublesome for the technology to get a space in the lighting industry that was highly penetrated by the incandescent and CFL lights. To compete with these technologies which were available at a very lower price seemed to very difficult as the major proportion of Indian population comprises of the middle class income group people. Moreover with the lower demand, manufacturers were also not able to take the advantage of economies of scales and pull down the per unit price of LED lights. The only thing they were in need was indeed a bulk order which allows them to do a large scale production and pull down the prices. UJALA and SLNP schemes by central government became the reason for this huge production, thus lowering down the prices and setting the LED lighting market on a growth path.

According to recently published report of Bonafide Research, "India LED Lighting Market Outlook, 2022", the LED lighting market which could not constitute of even 10% of the total lighting market till 2011, has grown above 20% in the current year 2015. The major development of the market took place in the last two years of 2015 and 2016. Sales of LED lights has grown more than 10x times in the past two years, making the technology as one of the fastest growing in India. It is very obvious that the people do not replace a bulb unless it stops working, but the problem which was arising till 2014 was Indian consumers replacing the old incandescent of CFL bulbs with the same technology and not the LED lights as they were costlier. It was very necessary to make people tend towards using the LED lights at the time of replacement. When the Modi government introduced UJALA scheme, people literally starting running for getting the maximum units of 10 LED lights fixed by the government. This led the foundation for repurchase of LED lights and creating a strong market scope for the same.

Moreover, the exhaustive promotional activities carried out by the LED manufacturing companies also played a major role in convincing people to buy LED lights. Players tried hard to make people aware about the long term cost effectiveness of LED lights as well as their environmental benefits. Another major thing that happened was a steep fall in the market prices of LED lights when the government started providing these lights at a very cheaper rate. At present while the UJALA bulb is available at Rs. 70, the market rate is somewhere between Rs. 110-130 which is not a huge difference. With the declining prices of the LED lights, sales of private players have also increased significantly. After achieving the target of 770 million units, the government will move out from the market making the whole field open for the private players. The efforts which have been made in the current years have given spontaneous results and it will carry on providing its fruits to the private players in the coming years as well.

Major companies operating in the LED lighting market of India are Philips Lighting India Limited, Havells India Limited, Surya Roshni Limited, Bajaj Electricals Limited, Syska LED Lights Private Limited, Crompton Greaves Consumer Electricals Limited, Osram Lighting Private Limited, Wipro Enterprises Private Limited, Eveready Industries India Limited and Moser Baer India Limited.

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India Refrigerator Market Outlook, 2022

GST SAYS - GET READY TO PAY MORE FOR REFRIGERATORS AND MAKE YOUR POCKET FEEL COLD: BONAFIDE RESEARCH

The Goods and Services Tax has revolutionized the Indian taxation system. The GST Act was passed in the Lok Sabha on 29th March, 2017, and came into effect from 1st July, 2017. Under the GST slab, all home appliances and consumer durables will attract a 28% tax. For durables like television, air conditioner, refrigerator and washing machine, the cumulative tax (excise and value-added tax) before the implementation of GST was around 23-28% depending on the state.

The hot and humid weather conditions have made consumers increasingly concerned about food spoilage and hygiene levels (for cooked food, perishable food items, beverages, and others) and have generated the demand for efficient refrigerators. Moreover penetration level in India is very low only about 27% which causes a greater demand for refrigerators in rural as well urban areas. In the modern age, many electronic appliances have become part of the basic needs. Every household has a fridge, washing machine, vacuum cleaner, chimney etc for the fulfilment of such basic needs. Prices of televisions, refrigerators and air-conditioners has gone up by some 4-5% from July with the goods and services tax (GST) council levying 28% GST on consumer electronics and durables as compared to the previous tax rate which was around 23%. The companies said they will pass on the additional tax burden to consumers which may lead to a temporary impact on demand.

According to recently published report of Bonafide Research “India Refrigerator Market Outlook, 2022”, overall refrigerator sales volume are expected to grow with a CAGR of more than 5% over next four years. Direct cool segment dominates the refrigerator market with 70% share and the rest 30% is of frost free segment. This scenario in the Indian market is set to change in the coming years. Now, consumers are moving toward technologically advanced products due to affordability offered by retailers by way of easy financing options. Features that were considered luxury have now become necessity and started influencing the purchase of Indian consumers. Hence, frost free refrigerators are getting momentum in the market. LG is a major player in direct cool refrigerator segment whereas Samsung is known for its frost free and premium segment refrigerators. In terms of region, Southern and Northern India together contributes for more than 55% to the total refrigerator market.

Price of refrigerators may rise this year because of higher input costs and a new tax structure. Prices of components like compressors for ACs and refrigerators have already risen up by approximately 4%, which in turn will cause higher price for the end products. However, companies are still relieved as they are looking upon festive seasons which are coming soon. Indians are very auspicious about the 'Subh Muhrat' therefore they purchase large appliances on such festive occasions. According to the industry players, refrigerator demand will not get much affected by the 'GST Hurricane' on such festive occasions. But rural markets may feel the heat of this price increase. On the other hand, some states like Maharashtra will have a positive impact after GST implementation. Manufacturers in Maharashtra would be the only one’s getting relief under GST as they were previously charged octroi at the rate of 5% after the other taxes which were almost 25-26% on household electronic appliances. This made their tax structure much higher than other states but now prices could marginally decline there.

Major Indian companies operating in the refrigerator market of India are Samsung India Electronics Private Limited, LG Electronics India Limited, Godrej & Boyce Manufacturing Company Limited, Hitachi Air Conditioning India Limited, Whirlpool of India Limited, Videocon Industries Limited, Panasonic India Private Limited, Haier Appliances (India) Private Limited, BSH Home Appliances Private Limited and Sharp Business Systems (India) Private Limited.

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India Fragrance Market Outlook,2022

ORGANIZED DEODORANT AND PERFUME PLAYERS TO DOMINATE THE FRAGRANCE INDUSTRY IN INDIA BY 2022: BONAFIDE RESEARCH

Factors like rise in young population, noticeable demand for fragrance products from tier II and tier III cities, hotter Indian climate and big players entering the market space is resulting in increased demand for fragrance products.

The fragrance industry's rapid growth is attributed primarily to the advent of functional products with several characteristics. The fragrance market of India has been categorized into perfumes and deodorants, out of which deodorants have been doing pretty well since past few years. However since ages, Indian people have used perfumes and perfume oils on their body. The late 19th century was the first real era of perfume when new scents were created because of advances in organic chemistry knowledge. Synthetic perfume products were used in place of certain hard to find or expensive ingredients. The fragrance market in India has been on a high, in terms of production, consumption, import as well as export and is in the process of growing exceptionally with more youngsters wearing fragrances. Youngsters are infusing perfumes and deodorants in their daily personal grooming routine. The Indian fragrance market is further differentiated between organized and unorganized markets.

According to a recently published report by Bonafide Research, "India Fragrance Market Outlook, 2022", the organized market for fragrance products like deodorants and perfumes is set to grow extraordinarily and reach to a total market size of around INR 6500 crore by 2019. The expanding product lines due to significant technology advancements and growing importance towards personal grooming & appearance; coupled with increasing consumer spending on beauty and wellness has contributed to the growth of fragrance market. The Indian market for fragrances consists of organized players like HUL, ITC, J.K Helene Curtis, McNroe Consumer Products, Marico, Nivea etc. which are giving tough competition to unorganized players. Foreign giants like Avon, Coty, L’Oréal have also set up their shops locally and are expected to compete rigorously to gain an upper hand in the market.

In the past, attar and alcoholic perfumes were the only significant categories of the fragrance market, and were mostly represented by unorganized players with the major chunk largely imported. However, with the passage of time more and more organized players have entered the market, thus increasing the overall market size and making it even more compelling for the unorganized players to introduce new cost effective products. Organized players are keeping their product prices in traction so as to capture a larger size of the market as India consumers have a tendency to buy a product that is low-cost and doesn't burn a hole in their pockets. Significant upward growth trend is expected, given the increasing scale of local firms and the need and demand for standardization of products. High-end sophisticated fragrances are set to have an increase in demand as consumers look to impress their peers, subordinates in office environments.

Major companies operating in the fragrance market of India are Hindustan Unilever Limited, Vini Cosmetics Private Limited, ITC Limited, Nivea India Private Limited, McNroe Consumer Products Pvt. Ltd., Marico Limited, J.K. Helene Curtis India Limited, Cavinkare Private Limited, Burberry India Private Limited, Coty India Beauty and Fragrance Products Pvt. Ltd., Avon Beauty Products India Pvt. Ltd., TTK Healthcare Limited, Emami Limited, Vanesa Care Private Limited, Adjavis Venture Limited, Wipro Enterprises Private Limited and Mankind Pharma Limited.

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