Ramesh Pathania/Mint

Ramesh Pathania/Mint

Small durables—a growing market

Small durablesa growing market

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

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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 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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