The expanding IT market, especially the increase in the PC penetration, has been creating the desired foundation for digital products in the country. There is a noticeable growth in the demand of consumer goods and durables that has been driven by high economic growth, large base of a young consumer population, rising disposable incomes and retail a boom in the country. It is expected that digital imaging products will drive large growth of the consumer durable segment in the future.
IT and digital lifestyle products are complementing each other. So, the growth of digital lifestyle products is certainly fuelling the growth of IT products. Lifestyle products are not only increasing revenue for IT, but, at same time, it is also giving advantage of increasing retail presence, which was difficult in the past. This is surely a sign of industry maturing, wherein people are ready to buy products off the shelf instead of through references or even abroad either for better prices or technology. Today, any of the digital lifestyle products are available immediately after their launch in India too.
The growing home segment is definitely helping the growth of such products and the IT channel space has already recognized this growing demand. But the question arises how much the IT channel benefits from this business?
Nitin Malhotra, Kingston Country Manager, India, says, “The IT business does get a lot out of the digital lifestyle business. There are always new ideas coming out, which implies that there is always a business opportunity for those new innovations. As digital lifestyle products are playing a key role in everyone’s daily life now, fancier and exciting digital lifestyle products are expected. Also, taking the trends into consideration, end-users tend to own some personal electronic devices that can reflect their own lifestyles. All mentioned above result in increasing market demands of digital lifestyle devices, and therefore it stimulates the market supplies.”
“The channel community is looking at dealing with quality products. Only quality products can help the industry to grow and sustain it, and the channel community has already realized this. Previously, there were specialized dealers dealing in this vertical only, but many of the traditional partners have also started focussing on these products to bolster `heir bottom line,” says George Van Der Merwe, COO, Sahara Computers.
Agrees Ish Bawa, Marcom Head, BenQ India, “With the technology getting more affordable and familiarized with the customers, there has been a growing interest amongst the channel community, not only in metros and mini-metros but also in the tier 2 cities. The digital age provides the channel partners an opportunity to sell quality products and hence do a profitable business. It is a win-win situation for the end-customers and the business community.”
Suresh Pansari, Managing Director, Rashi Peripherals, said, “Slowly and steadily, IT channels are getting a feel and hang of these lifestyle products. At the same time, they are also getting experience of retail sales. Understanding the importance of touch-and- feel factor, many channel partners have slowly started adopting these and are also taking initiative in updating their sales team to handle these kinds of customer enquiries. Understanding the importance, some partners have also started creating experience zone where no sales happen helping customers to make a correct decision.”
Fastest Moving Products
Amongst the fastest moving lifestyle products are MP3/MP4 players, USB drives, notebooks, Digi Cams, Multi Media Speakers, Wireless Products, Mobile Phones and LCD monitors. A number of factors like increase in disposable incomes, growing consumerism, desire to have tech gadgets, increase in PC penetration and PC awareness as well as ease of use are responsible for the growth of these items in India. The other factor is that they do not need any post-buying installation support and prices for these products are getting very competitive. Many end-users tend to purchase the latest fancy, exciting digital devices to show their unique personality and lifestyle. Therefore, they look for the latest digital devices and then change those devices very frequently. They just want the latest and the fanciest ones.
The reasons for the phenomenal growth in the mobile phone segment are the increase in the number of users, increasing awareness and familiarization with high-end technology products and affordability.
Adds K. S. Sachar, COO, IDLDPL (India Digital Life Style Distributors Pvt. Ltd.),
“Digital Life style products are all moving in their own category so being such a advanced category its very difficult to compare and come up with the winner as digital camera market is booming at around 100% so is the case with Mobile, MP3 and MP4 Players have started catching up the market and are big craze with the youngsters. Thus each category of digital lifestyle is a segment in itself and is booming. Though the market is still quite price driven thus low price selling items are high selling items.””
Increasing Digital Camera Market
Riding high on the digital imaging wave, digital camera market has evolved well during the last few years in India. Vendor initiatives coupled with the end-user awareness and interest have led to this upsurge in the market activities for digital cameras. Given the expanding IT market specially increasing PC penetration is creating the desired foundation for digital camera usage in the country. According to IDC, the digital camera market will peak in 2010. There is tremendous potential for digital cameras as the Indian consumer is becoming more aware of the rich features of digital cameras.
According to IDC, India is one of the world’s largest growing markets for digital cameras. The Indian digital camera market in 2006 was 430,000 units and it is expected that the digital camera market will be over Rs.1,000 crore by 2008. Commenting further, Alok Bharadwaj, Senior Vice-President, Canon India, said, “The increase in awareness on the options that digital photography offers to the consumers has been a key factor driving growth for digital cameras. Digital camcorders have been seeing increasing sales with people wanting to capture special moments with their families. The ease in transferring recordings to a PC for editing and sharing has been a key factor driving camcorder sales. We are looking at doubling our revenues in India over the next two years to reach a target of Rs.800 crore in 2008. The growth in demand for digital cameras has been driven by high economic growth, a large base of a young consumer population, rising disposable incomes and a retail boom. We expect to see a large growth of the consumer durable segment to be driven by digital imaging products. More than 75 per cent of all the cameras that are sold today are digital and digital images are expected to account for 90 per cent of all professionally taken photographs by 2010.”
Market Trend
A basic trend nowadays is connectivity. Today, customers look at easy connectivity, smaller size, portable, fancy design, affordable pricing, multifunctional and synchronization of various gadgets with each other. Retail is the in thing for IT that includes LFR as well as partners venturing in retail at their own level. Consumers are moving towards reliability. They are looking for the latest in technology and are constantly upgrading. IT products have become lifestyle products, and hence aesthetics of the product also plays a major role. Customers want a complete digital experience and hence prefer purchases at retail outlets rather than standalone shops, as they want to touch and feel all products before making a decision. Value for money and comfort (like plug-n-play) are the key ingredients for lifestyle products.
Sachar says, “Trend in the market is that the digital life style products are getting a craze specially among the youngsters. Today trendy technology oriented customers are ready to pay that extra premium for a style.”
Buying Pattern
The buying behaviour is influenced by technology most of the times, because as the individual’s purchasing power is increasing day by day, customers first tend to evaluate the requirement of the product and then make an assessment of the cost of the products, which is followed by fixing a budget accordingly. The Indian consumers have started considering technology as well as quality while taking a decision. So, players who would provide quality products at a competitive price would nurture and sustain the growth in the market.
Importance of Service Support
After-sales service support is of utmost importance for any industry. After-sales service support plays a key role if the company would like to deliver a delightful consumer experience of the brand to increase customer satisfaction level and increase brand loyalty. In the case of retail products, least wait is expected and as end-user is in contact directly, he expects overnight services.
Says Malhotra, “Nowadays, customer is the most important. So, of course, after-sales service support is what can differentiate numerous brands in the market. Kingston’s after-sales service support is always one of the competitive advantages over competition, which we can be proud of.”
Future Trend
The future trend will be convergence, connectivity and mobility...The demand for higher mega pixel products will increase and people will buy quality products at a competitive price. Also, with the increase in demand for multimedia devices, more integrated on-the- move devices like MP3/MP4 players, digital photo frames, speakers, Webcams, handycams, digital cameras, etc. will see an upsurge.
“We are expecting that in the days to come, the demand for higher mega pixel cameras will increase. Apart from large retail chains/retail stores, the IT channel community is going to play a major role in boosting the sales of digicams in India,” says Merwe.
In the future, more and more interesting new products will be launched. Devices will get smaller, multifunctional and portable. The most important thing is that all devices will be able to show user’s personality or lifestyle.
