A Note on the Refrigerator Industry in India

Till the 1980s, players like Godrej, Kelvinator, Allwyn and Voltas controlled almost 90% of the market. Earlier, the white goods sector was categorized as a luxury goods industry and was subject to oppressive taxation and licensing. The situation changed after the liberalization of the Indian economy in the early 1990s. The government removed all restrictions, and now there is no restriction on foreign investment, and licenses are no longer required. Post-liberalization, a number of foreign companies entered the market and many domestic players also diversified into refrigerators. BPL and Videocon who already had a presence in the consumer electronics market, leveraged their strengths to enter the durables sector.

The refrigerator market has been growing at a rate of about 15% per year, while the consumer durables industry as a whole has grown at almost 8%. The size of the refrigerator market is estimated to be 3.5- 4 million units approximately, valued at Rs 50 billion. The domestic penetration rate of refrigerators is about 9%. The penetration of refrigerators is considerably higher in urban areas, which account for 75% of the demand, with rural areas constituting the other 25%. The demand is also higher in the northern and western parts of the country than in the east. The south also has high demand as the warmer weather of the south requires a refrigerator running throughout the year...