Indian white goods market on verge of cyclical upturn: Report

New Delhi: India's white goods market size can grow from USD 5.4 billion to USD 30 billion if the country can reach penetration levels of South East Asian countries, says a Deutsche Bank report.

According to the global brokerage firm, the Indian white goods market is under-penetrated and is on verge of a cyclical upturn.

The size for consumer durables is significantly small compared with the South East Asian region on a per capita basis, and hence the market offers scope for a large potential multi-year growth cycle, the report said.

"If India is to reach anywhere close to the South East Asian average, the India market should be at least 50 per cent of the size of the China market as against the current size of just 9 per cent," it added.

The market is under-penetrated, with 6 per cent levels for ACs, 9 per cent for washing machines and 21 per cent for refrigerators.

Provided India reaches anywhere close to the South Asian average, the AC market's potential size could be USD 11.3 billion, refrigerators could be USD 13.9 billion and washing machines' market potential could be USD 5.5 billion.

Moreover, the report said that the government initiatives on power, housing, and smart cities could increase demand exponentially in the next 2-5 years.

"We forecast 8-12 per cent industry growth, with organised players outperforming," the report said.

Moreover, consumer sentiment is likely to see an upturn with lower inflation and reducing consumer finance rates.

"We believe that the sector volumes are set for a cyclical upturn after five years of muted volume growth," the report said, adding that "the organised industry will deliver 3-5 pps higher growth, and industry realisations CAGR of 2-2.5 per cent given the upgrade to energy-efficient products."