DIGITAL POWERS CONSUMER DURABLES A $23 Bn opportunity by 2023 July 2019Boston Consulting Group (BCG) is a global management consulting firm and the worlds leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit bcg. Google India Private Limited (Google India) is a wholly owned subsidiary of Google LLC. It is engaged in the business of marketing social This report has been compiled using proprietary research and data from BCG choice of multiple payment options is one of the top 5 drivers Absence of in-person guidance and lack of touch TV, AC propensity for repeat purchase is over-indexed for low ASP durables Seizing the opportunity: What does this mean for consumer durable companies? Set up investments and create right digital organization structure to capitalize the upcoming USD 23 Bn digitally influenced opportunity Given disconnect in market share and digitally influenced shares reset the digital ambition. Market leaders should strive for at least fair share in digitally influenced sales to remain relevant. Aspirers have opportunity to beat the market leaders through digital leadership Drive focused interventions at individual consumer level across journey touchpoints to leverage short research window of 2-3 weeks of 80% undecided consumers Leverage 30% of consumers who post reviews online to influence 60% for whom this matters. Drive post purchase experience and amplify advocacy at scale This will require a big shift. From Digital as a channel to Digital as core of future marketing Current focus of driving purchase to Driving end to end consumer engagement Mass marketing to Personalized interventions Driving offline market share to Driving digitally influenced market share Driving company driven communication to Driving advocacy at scaleDECODING DIGITAL INFLUENCE 6 Digital Powers Consumer DurablesDecoding Digital Influence 78 8 Digital Powers Consumer Durables USD Bn The Consumer Durables industry is set to grow by 13% to reach $36Bn by 2023 1. Deendayal Upadhyaya Gram Jyoti Yojana Note: Exchange Rate 1US$ = INR 70 Source: Euromonitor; Press Search; Industry Reports, BCG Analysis Air conditioners Refrigerator Water Purifiers Consumer Durables Industry size 2023F 36 2022F 31 2021F 28 2020F 25 2019F 22 2018 20 2017 17 2016 15 2015 13 2014 12 2013 10 2012 9 Growth Drivers Middle class households to increase from 50Mn in 2018 to 80+ Mn by 2023 Increasing disposable income Low penetration of consumer durables in India vs developed economies (Eg: penetration levels of air conditioners and washing machines is INR 20,000; Low ASP products Appliances with ASP <INR 20,000 Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital Influence Study 2017 29% 53% 27% 63% 34% 63% 35% Online buyers as a % of digitally influenced buyers % of consumers 68% 21% 11% TelevisionDigital Matters 17 Decoding Digital Influence 1516 16 Digital Powers Consumer Durables Significant growth observed in digitally influenced buyers from non-tier 1 cities, women and higher age group consumers over the last 4 years. 10x growth in the % of digitally influenced female online buyers in the last 4 years. 5x growth for men in online buying between 2013 and 2017. Significant growth in digital influence high growth in women, 35+ age group and tier 2-3 city consumers in last 4 years By Gender 2013 Male 2017 10x increase in female online buyers over last 4 years Female 3% 1% 15% 10% 11% 9% 16% 10% Digitally influenced in-store buyers Digitally influenced online buyers 5x 10x Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital influence Study 2013, 2017, BCG Analysis