Not long ago, decade-old television sets framed in a wooden box, refrigerators that were older than a few family members and tape-recorders that were proud witness to many important family events were common features in many households.

But soon all that gave way to newer versions. While image-conscious consumers look for constant change in appliances to add aesthetic appeal to their homes, many others feel that upgrading such electronic items has become inevitable in the fast-changing consumer market.

According to Moon B Shin, Managing Director, LG Electronics India, multinational firms manufacturing home appliances focus on localising their products to suit Indian market. “Customers are open to switching over to new products if they offer value for money and are innovative. The base of tech-savvy customers is also growing who prefer upgrading or replacing their products,” he says.

The last two years has seen a significant rise in the number of those buying or exchanging consumer durables, say marketing managers of showrooms. They also point to industry figures that show that as much as 50 per cent of mobile phones, 20 per cent of televisions and 15 per cent of refrigerators and air conditioners are exchanged/replaced every year. Vivek and Co.’s Product Manager A. Balaji says, “About 95 per cent of our consumers exchange their old products for newer, upgraded versions. Seven years ago, most of our customers were in the 35-50 age group. Today, those in the 25-30 age group make bulk of the purchases.”

V.Varadarajan, Managing Director, Sowbhagya Wet Grinder, finds the market more patronising than ever. “Exchange offers are mainly to encourage customers buy new products. The old wet grinders we get through exchange offers will be disintegrated and sold off to scrap iron buyers.” Though the boom in the consumer goods market has opened the doors to a vast array of choices, the sustainability of the growth driven by spending on consumer goods and long-term implications for the economy and the environment need to be factored, say experts.

Sanjay Srivastava, a sociologist at the Institute of Economic Growth, Delhi University, who has done extensive studies on consumer culture and spending patterns, says that since the late 1990s, the country has turned into a predominantly consumption-driven economy. “Almost 61 per cent of GDP output is driven by consumer spending. We have the highest rate of growth of mobile phones anywhere in the world with a monthly addition of 60 lakh phones. Spending on mobile phones has jumped 96 per cent annually and consumption of white goods is growing by 60 per cent.”

The kind of spending going on has a significant impact even on the poor, he says, as they are spending a large amount of money, relative to their income, on second-hand consumer goods. “Many desire and aspire to be seen as consumers.” Pointing out that Indian market is emulating what the West went through during the post-World War-II boom, Dr. Srivastava says newer design is mostly about aesthetics. ‘Planned obsolescence’ is being used as a design strategy to make customers discard an old product and buy a new one soon. The worrying part, he adds, is that society is going through this phase of industrialisation without any environmental safeguards. The easy availability of credit is also an important factor, says Brinda Vishwanathan of the Madras School of Economics. The credit card market is growing by 35 per cent annually and most of the spending is fuelled through credit. “Though we are mimicking the West, we have a much larger population to carry along,” says Dr. Vishwanathan. Many consumers, however, seem to find it difficult to resist the temptation of switching over to new products. “Upgrading to new appliance or gadget is not extravagance. Every new appliance has become an essential commodity ” says Shriram, a banker.

( With inputs from S.Aishwarya, Ajai Sreevatsan and R.Sujatha)

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