The consumer durables industry faces a tough time amidst shifting consumer preference. Companies cannot afford to be dependent on a single category to ensure future growth and to take on growing competition.

Today, neither mama's magic nor those celebrity-endorsed com - mercials can propel the sales of consumer durables. Or, that's what the latest findings by ORG-GFK seem to suggest. More worrying is the fact, barring the refrigerator segment, all the major segments of the industry witnessed a slide in growth from double digit to single digit over the previous fiscal. For instance, the washing machine segment reported just 3.9% increase compared to 17% during FY05 while CTV reported a mere 7.7% growth against 17% during the same period. Refrigerator segment, which emerged as the only saving grace, clocked a growth of 7.7% from 5.7% during the period, as the report by ORG-GFK highlights. This disappointing performance comes amidst some rosy projections by organizations like FICCI and CII. But what is ailing the industry?

A major reason for the lackluster performance of the consumer durables industry is the shifting consumer preference. And technology is the biggest factor influencing that shift. According to the industry experts, consumer buying preferences are changing and moving towards high-end categories. This means that the companies which are slow to catch up with the latest technology would risk losing market share and in extreme cases their very survival (remember yesteryears' TV makers like Optron, Oscar, Nelson, etc.) "In the field of technology, companies will have to continuously think what the next wave will be and how one can ride on that. It's also equally important to work on a strong bargaining power with the trade", commented D Shivakumar, Executive Director and Vice-President, Philips India, in a recent interview with a leading business daily. Another factor that is impacting the industry players is their small product portfolio. The problem is that in today's rapidly changing technology environment as consumers shift their preference from one product to another (like from curved TV to Flat TV, or from Flat TV to LCD TV), a player with a small product portfolio will find it difficult to survive. BPL is a case in point. BPL, which once ruled the consumer electronics roost, began to lose its market share in the wake of onslaught from tech-savvy Korean giants like LG and Samsung, as they were quick to introduce the latest technology-based innovative products in the market.

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