Consumer Durables sector explained

How companies in this sector earn

How do Consumer Durables companies make money?

• They sell through dealers, large retail chains and online stores, often under well-known brands.
• Sales depend on how many products are sold and the average price, which rises as buyers pick premium models.
• Metals, plastics, electronic parts, gold and crude-oil-based chemicals are common big costs, depending on the product.
• Some electronics firms assemble products for other brands for a fee per unit, which usually earns a thinner margin.
• Demand rises around festivals, weddings and summer, so results can vary a lot by quarter.

Who regulates it

Bureau of Indian Standards (BIS), for mandatory quality and energy-efficiency marks · Bureau of Energy Efficiency (BEE), for star ratings on appliances · Ministry of Electronics and Information Technology (MeitY) · Department for Promotion of Industry and Internal Trade (DPIIT)

What moves results across the sector

• Prices of copper, aluminium, steel, plastics, gold and crude-oil-based chemicals.
• Weather, since summer heat drives sales of cooling products.
• Changes in GST rates, import duties and incentive schemes for local manufacturing.

Words you'll meet

Key terms

Premiumisation

Buyers moving to costlier models, which raises the average selling price.

Channel inventory

Stock held by dealers and retailers that has not yet been sold to buyers.

EMS (electronics manufacturing services)

Companies that make phones, TVs and other electronics for brands that sell them.

Seasonality

Regular swings in sales during the year, such as more air conditioners sold in summer.

PLI scheme

A government scheme that pays manufacturers an incentive linked to extra production in India.