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Small durables—a growing market

Small durables—a growing market
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First Published: Sun, Sep 25 2011. 10 10 PM IST

Ramesh Pathania/Mint
Ramesh Pathania/Mint
Updated: Sun, Sep 25 2011. 10 10 PM IST
Small durables—the little items that personalize households and make each home different—can be divided into four main groups: furniture and fixtures, household appliances, recreational goods, and other personal goods including mobile handsets, watches, clocks, plastic goods and decorative items. As a group, they account for less than 2% of total household expenses, as other basic necessities such as food, travel and rent take up the bulk of the budget.
Ramesh Pathania/Mint
The largest sub-groups in this category are other personal goods and household appliances, accounting for more than 80% and 11%, respectively, of the total expense within the group. There are variations across states. In Chandigarh, Goa and Kerala, household appliances take up close to 20% of the expenses in this category, double the average.
Within this group of small durables, there is a wide variety, with prices and brands to suit every pocket, and as households move up the income ladder, they spend on higher-value items within the group; per-household annual expense on small durables, therefore, rises from Rs 1,255 on an average in the lowest income segment, which are households earning less than Rs 1.5 lakh a year, to Rs 11,807 in the highest income segment of households earning more than Rs 10 lakh a year.
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Aspiration levels being high across urban India, the demand to spruce up households as soon as money starts coming in is strong. In more affluent states such as Maharashtra and Gujarat, which together account for close to one-third of the total small durables expenditure, a glimpse into slums in their cities reveals families spending on light fixtures, sofa sets, mixer-grinders, etc. Though the northern region has the highest population, it is the western states that have the largest share of expenditure on household appliances, furniture, fixtures and recreational goods.
Interestingly, if we look at the states, Chhattisgarh has the highest per-household expenditure on small durables, a pointer to the surge in income in towns such as Durg, Raipur and Bilaspur in recent years. It is followed by Haryana and Gujarat in average per-household expenditure in this group. Bihar and Madhya Pradesh fall at the bottom of the table, with low disposable income making its mark.
When it comes to per-household average expenditure on household appliances, Vadodara, urban areas of southern Goa, Ahmedabad and Durg are the leading four urban areas. For furniture and house fixtures, Thiruvananthapuram, Ambala, Gurgaon and Gandhinagar top in per-household average annual expenditure, while Durg and Raipur lead in per-household expenses on recreational goods. For the other personal goods group, per-household expenses are highest in Noida, Panchkula, Valsad and Gandhinagar.
The market for small durables as a group is the largest is Mumbai, followed by Delhi, both of more than Rs 1,100 crore annually. Mumbai beats Delhi in the size of the market, despite having fewer households.
Though, as durables, all items in this expenditure category have a life of more than a year, households are quick to replace their older or cheaper goods for newer models and fashions when disposable income rises, creating an ever expanding market. Overall, many of these items have become more accessible to lower income segments, with clocks, watches and mobile handsets available at relatively lower prices than in earlier decades.
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First Published: Sun, Sep 25 2011. 10 10 PM IST