Microwaves in India-Market Report
Headlines
·
Volume sales of microwaves leap
by an impressive 24% in 2007
·
Sales grow by only 14% in
current value terms in 2007, as companies cut prices on several models in a bid
to increase penetration
·
Freestanding microwaves
dominate, as they offer more flexibility in terms of space usage
·
Manufacturers are working very
hard to convince consumers of the utility of microwaves for Indian cooking, and
this may result in volume sales growing at a 14% CAGR over the forecast period
Trends
·
Although microwaves have been
around since the early 1990s, adoption has been very slow. This is mainly
because microwave cooking does not suit traditional Indian cooking (which is
often open pan based, pressure cooker based, steam based).
·
In the mid to late 1990’s,
microwave sales were on a small base (main purchasers were urban upper income
Indian consumers who purchased them as they were considered a premium
appliance. However in most cases they were used merely for warming food). But
during the late review period most were bought not merely for their prestige
value, but chiefly for their product features (faster cooking than traditional
Indian style cooking, lower oil used in microwave cooking etc.)
·
Busy working women prefer
faster cooking rather than the leisurely traditional Indian style of cooking
which requires constant attention. They seek the convenience of cooking offered
by microwaves. More importantly there is a growing awareness for healthy
cooking, low-oil use, grilling etc, which is offered by microwaves.
·
Other food and lifestyle trends
which are also contributing to growth are the increasing use of frozen food,
home delivery etc, which require a microwave.
·
But there are many factors
constraining growth. A microwave is still not suitable for a large number of
Indian food products, mainly the all-important chapati (Indian bread). Fears
about microwaves’ harmful effect on health (cancer) are also a constraining
factor. Lack of user knowledge is also holding back growth. But manufacturers
are holding cooking demonstrations at shopping malls, women’s clubs etc to
raise awareness and aid growth.
·
Based on growing awareness and
strong advertising, microwaves are being accepted more in the bigger cities
(eg, Mumbai, Delhi) and North and West India. South and East have been slower
to adopt (which may be possible since south and east Indian customers are
slightly more traditional in cooking habits and take longer to shift into newer
style cooking appliances such as microwaves). Semi-urban and even rural towns
have emerged as high growth markets, albeit on a small volume base.
·
Freestanding microwaves
dominate, but in urban centres built-in models are rapidly gaining interest, as
it is common to follow Western kitchen trends.
·
While the entry level solo
model (single function microwave-mainly for heating) was popular at the turn of
the century, grill and convection functions as well as combination functions
grew in popularity more recently since modern Indian women are increasingly
baking and grilling, which is different from traditional Indian cooking.
·
The best-selling sizes are
20-25 litres and microwaves are available in white, a number of bright colours
and stainless steel finish.
·
Auto menus, Indian menus,
browning, crisping and steam ovens are the latest features. Energy efficiency,
like for all other appliances, is also a very popular feature.
·
Given their low prices,
microwaves are easily affordable and also make a popular gift item.
Competitive Landscape
·
The market for microwaves is
more crowded than for the other large appliances, but the leading players are
the same (multinationals LG, Samsung and Whirlpool and key Indian player
Videocon).
·
LG was the leading player in
2007, with 32% of volume sales and offers a full range of solo (single function
microwave-mainly for heating), grill, convection and combination microwaves in
different sizes and with varied features. The company’s leadership is not just
due to its high-quality image, but also to its aggressive distribution and
product demonstrations to increase awareness. In 2007 it kept up its aggressive
pace and launched high-end microwaves SolarDOM and WaveDOM. The LG SolarDOM is
currently the world’s best microwave with its unique Light wave Technology
which enables three times faster cooking, high nutrient retention, better
energy efficiency (50% saving) and high convenience levels. The Round Cavity
design makes it easy to clean and at the same time saves space. It has an
Indian Auto Menu option, Multi Rotisserie grill and Smart Guide Display.
Consumers also have the option of using an installation to make it built-in.
·
Samsung ranked second in 2007,
with a 30% volume share, and it to offers a full range of sizes and features
similar to LG. In line with its efforts to offer innovative high-quality
products, in 2007 it launched the “trio” range with special triple heater which
eliminates the need to preheat before baking. It is faster, bigger and more
stylish than most microwaves on the market. It offers various types of
scratch-proof coatings.
·
Videocon (Kenstar brand) has
been very active with its brand and with the recently acquired Electrolux
brand. The company held a 14% volume share in microwaves in 2007. It is
aggressive in terms of distribution, as well as product demonstrations and
pricing. Videocon has used innovative distribution to gain a competitive edge
in a category that demands product demonstration. As such, it has recently tied
up with Kinetic Market & Services, which has a presence in 14 states, for
direct sales of microwave ovens. Kinetic Market & Services will market
Electrolux Microwaves in Delhi, Pune, Jaipur, Kanpur, Lucknow and Bhubaneswar
and then extend distribution across the country and for other product
categories.
·
Whirlpool’s “Magic Cook”
series, with its customisable functions and cooking which meets Indian cooking
methods, has proved highly popular and the company held an 8% share in 2007.
Its advanced features like 6th Sense crisp function offer crisper foods and the
range is aesthetically appealing in various colours and finishes.
Prospects
·
Volume sales of microwaves are
expected to continue to grow strongly, at a CAGR of 14% over the forecast,
likely due to greater demand from busy working women and the trend towards
packaged frozen food and a healthier (non-oil) diet.
·
Moreover, incomes are rising
and prices are expected to come down due to increased competition, and this in
turn will also help to drive sales.
·
While urban centres are
expected to be the biggest markets, semi-urban areas may see higher growth
rates due to the current low penetration and rapidly growing awareness and
lifestyle aspirations.
·
Innovative marketing techniques
like cookery shows, product demonstrations etc will also help generate more
interest and boost demand.
·
Although entry level models
will continue to be the mainstay, combination models and advanced feature
models are expected to see strong growth in the urban centres.
·
LG is expected to maintain its
lead, based on its aggressive marketing and superior quality products. However,
number two player Samsung and many smaller players like Electrolux and much
smaller Indian brands like Maharaja, Inalsa etc. are expected to step up
activities and hence the market is likely to be highly competitive.
Sector Indicators
Rs million
2002 2007 2012 %
CAGR % CAGR
2002-2007 2007-2012
Ready meals 3.4 22.2 41.3 546.7 86.3
Source: Euromonitor
International
Sector Data
'000 units
2002 2003 2004 2005 2006 2007
Microwaves 190.0 240.0 305.0 390.0 487.5 604.5
- Built-in microwaves - - - - - -
- Freestanding microwaves 190.0 240.0 305.0 390.0 487.5 604.5
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
Rs million
2002 2003 2004 2005 2006 2007
Microwaves 1,710.0 2,040.0 2,425.0 2,875.0 3,288.3 3,751.3
- Built-in microwaves - - - - - -
- Freestanding microwaves 1,710.0 2,040.0 2,425.0 2,875.0 3,288.3 3,751.3
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
% volume growth
2006/07 2002-07 CAGR 2002/07 TOTAL
Microwaves 24.0 26.0 218.2
- Built-in microwaves - - -
- Freestanding microwaves 24.0 26.0 218.2
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
% current value growth
2006/07 2002-07 CAGR 2002/07 TOTAL
Microwaves 14.1 17.0 119.4
- Built-in microwaves - - -
- Freestanding microwaves 14.1 17.0 119.4
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
% retail volume
Company 2003 2004 2005 2006 2007
LG Electronics India Ltd 19.1 22.3 25.8 30.0 32.0
Samsung India 26.0 28.0 29.0 29.0 30.0
Electronics Ltd
Kitchen Appliances 16.0 13.0 12.0 13.0 13.5
India Ltd
Whirlpool of India Ltd 6.0 7.0 7.1 7.5 8.0
National Panasonic 4.0 4.5 4.6 5.0 5.0
India Ltd
Electrolux Kelvinator Ltd 1.0 1.5 2.3 4.0 4.0
Inalsa Appliances Ltd 2.5 3.0 2.5 3.0 2.5
IFB Industries Ltd 2.0 2.0 2.0 2.5 2.0
Bajaj Electricals Ltd 2.0 1.0 0.5 1.0 1.0
Kalyani Sharp India Ltd 2.0 1.0 0.5 - -
Usha International Ltd 1.0 1.0 1.0 - -
Others 18.4 15.7 12.7 5.0 2.0
Total 100.0 100.0 100.0 100.0 100.0
Source: Trade
associations, trade press, company research, trade interviews, Euromonitor
International estimates
% retail volume
Brand Company 2004 2005 2006 2007
LG LG
Electronics India Ltd 22.3 25.8 30.0 32.0
Samsung Bioceramic Samsung India 28.0 29.0 29.0 30.0
Electronics
Ltd
Kenstar Kitchen
Appliances 13.0 12.0 13.0 13.5
India
Ltd
Whirlpool MagiCook Whirlpool of India Ltd 7.0 7.1 7.5 8.0
National National
Panasonic 4.5 4.6 5.0 5.0
India
Ltd
Electrolux Electrolux
Kelvinator Ltd 1.5 2.3 4.0 4.0
Inalsa Inalsa
Appliances Ltd 3.0 2.5 3.0 2.5
IFB IFB
Industries Ltd 2.0 2.0 2.5 2.0
Bajaj Bajaj
Electricals Ltd 1.0 0.5 1.0 1.0
Sharp Kalyani
Sharp India Ltd 1.0 0.5 - -
Usha Lexus Usha
International Ltd 1.0 1.0 - -
Others 15.7 12.7 5.0 2.0
Total 100.0 100.0 100.0 100.0
Source: Trade
associations, trade press, company research, trade interviews, Euromonitor
International estimates
% retail volume
2002 2003 2004 2005 2006 2007
Store-based retailing 100.0 100.0 100.0 100.0 100.0 100.0
Grocery retailers 40.0 37.0 37.0 36.0 35.0 36.5
Hypermarkets 23.0 25.0 27.0 29.0 29.0 29.5
Supermarkets 17.0 12.0 10.0 7.0 6.0 7.0
Discounters - - - - - -
Non-grocery retailers 60.0 63.0 63.0 64.0 65.0 63.5
Mixed retailers 12.0 13.0 13.0 14.0 15.0 16.0
Department stores 12.0 13.0 13.0 14.0 15.0 16.0
Variety stores - - - - - -
Mass merchandisers - - - - - -
Health and beauty - - - - - -
retailers
Chemists/pharmacies - - - - - -
Parapharmacies/drugstores - - - - - -
Perfumeries - - - - - -
Other health and beauty - - - - - -
retailers
Home furniture and - - - - - -
household goods retailers
Furniture and - - - - - -
furnishings stores
DIY and hardware stores - - - - - -
Durable goods retailers 48.0 50.0 50.0 50.0 50.0 47.5
Kitchen specialists 24.0 25.0 26.0 27.0 28.0 29.0
multiples
Kitchen specialists 24.0 25.0 24.0 23.0 22.0 18.5
independents
Electrical goods - - - - - -
retailers multiples
Electrical goods - - - - - -
retailers independents
Other non-grocery - - - - - -
retailers
Non-store retailing - - - - - -
Homeshopping - - - - - -
Internet retailing - - - - - -
Direct selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
Note: Others
includes sales from door to door selling, warehouse clubs etc
'000 units
2007 2008 2009 2010 2011 2012
Microwaves 604.5 731.4 855.8 967.0 1,073.4 1,180.8
- Built-in microwaves - - - - - -
- Freestanding microwaves 604.5 731.4 855.8 967.0 1,073.4 1,180.8
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
Rs million
2007 2008 2009 2010 2011 2012
Microwaves 3,751.3 4,180.5 4,509.6 4,703.5 4,824.1 5,041.2
- Built-in microwaves - - - - - -
- Freestanding microwaves 3,751.3 4,180.5 4,509.6 4,703.5 4,824.1 5,041.2
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
% volume growth
2007-12
CAGR 2007/12
TOTAL
Microwaves 14.3 95.3
- Built-in microwaves - -
- Freestanding microwaves 14.3 95.3
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
% constant value growth
2007-12
CAGR 2007/12
TOTAL
Microwaves 6.1 34.4
- Built-in microwaves - -
- Freestanding microwaves 6.1 34.4
Source: Official
statistics, trade associations, trade press, company research, store checks,
trade interviews, Euromonitor International estimates
