DIGITAL POWERS

CONSUMER DURABLES
A $23 Bn opportunity by 2023
July 2019
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06 20 52
DECODING DECODING SEIZING THE
DIGITAL DIGITAL OPPORTUNITY
INFLUENCE CONSUMER
EXECUTIVE SUMMARY
The consumer durables industry is penetration, falling smart phone expected to become 55% by 2023
expected to continue the growth prices, decline in data tariffs, more • Between 2013 and 2017, number of
momentum to become USD 36 Bn vernacular content & sales thrust by digitally influenced consumers has
by 2023 on back of multiple growth ecommerce companies grown disproportionately for tier
drivers viz. low product penetration, • We expect USD 10 Bn out of the 2-3 city consumers (5X) and women
rising disposable income, increasing above to be online sale consumers (10X)
urbanization, easy access to credit &
Government’s thrust on electrification Digital Influence varies by product Digital influence varies by brands
categories • Offline market share by brand does
Decoding Digital Influence:
• 3 out of 10 consumers today are not translate into similar share for
Digital Influence will power digitally influenced for high average digitally influenced purchases today
consumer durables selling price (ASP) durables like
Decoding Digital Consumer:
ACs, Televisions, Refrigerators and
• We define a sale as ‘digitally
influenced sale’ if the buyer uses
Washing machines. 1 in 3 buy these Pre-purchase phase:
products online
internet during any stage of • 84% in-store buyers and 74% online
purchase cycle • 2 out of 10 consumers today buyers are not decided on their
are digitally influenced for choice of brand when they start
• Percentage of digitally influenced
comparatively lower ASP products their search
sales in consumer durable industry
like small appliances, water purifiers
has more than doubled over last • Influence window is short. Digitally
& microwaves. 1 in 2 buy these
five years and in next 5 years we influenced buyers typically research
products online
expect 63% of overall consumer for 2-3 weeks before making the
durable sales to be digitally Digital influence varies by consumer final purchase
influenced. USD 23 Bn by 2023!!! demographics • Digitally influenced buyers use
• Multitude of drivers will propel this • 29% of urban consumer are digitally search engines as the primary
growth in India viz. rising internet influenced today & this number is source for online research; social

This report has been compiled using proprietary research and data from BCG & Google. We have also considered perspectives of industry leaders
 media, online videos, blogs & online Post-purchase phase: • Drive focused interventions at
forums are other key sources for individual consumer level across
• Nearly 1 out of every 3 online
online research journey touchpoints to leverage
buyers provides digital review post
• Consumers tend to search for high short research window of 2-3 weeks
purchase
ASP durables by brand & low asp of ~80% undecided consumers
• ~26% in-store buyers and ~36%
durables by product specifications • Leverage ~30% of consumers who
online buyers look for other
• Nearly 2 out of every 3 digitally post reviews online to influence
offerings from the same brand post
influenced consumers rate online ~60% for whom this matters. Drive
purchase; propensity for repeat
reviews as a significant influencer in post purchase experience and
purchase is over-indexed for low ASP
their purchase decisions amplify advocacy at scale
durables
Purchase phase: This will require a big shift. From
Seizing the opportunity:
• Low price and convenience are the • ‘Digital as a channel’ to ‘Digital as
What does this mean for consumer
largest drivers of online purchase; core of future marketing’
durable companies?
choice of multiple payment options • ‘Current focus of driving purchase’
is one of the top 5 drivers • Set up investments and create right to ‘Driving end to end consumer
• Absence of in-person guidance and digital organization structure to engagement’
lack of ‘touch & feel’ are the biggest capitalize the upcoming USD 23 Bn
• ‘Mass marketing’ to ‘Personalized
barriers of online purchase digitally influenced opportunity
interventions’
• Buying from e-commerce • Given disconnect in market share
• ‘Driving offline market share’ to
aggregators is preferred over and digitally influenced shares –
‘Driving digitally influenced market
individual brands’ website/apps reset the digital ambition. Market
share’
across categories; TV, AC & water leaders should strive for at least fair
• ‘Driving company driven
purifiers are relatively over-indexed share in digitally influenced sales
communication’ to ‘Driving advocacy
on brand website or app led to remain relevant. Aspirers have
at scale’
purchases opportunity to beat the market
leaders through digital leadership
DECODING
DIGITAL
INFLUENCE

6 Digital Powers Consumer Durables

Decoding Digital Influence 7
 The Consumer Durables industry is set to grow by 13%
to reach ~$36Bn by 2023
Growth Drivers Consumer Durables Industry size
USD Bn 36
Low penetration levels
Low penetration of consumer 31
durables in India vs developed 13%
economies (Eg: penetration
28
levels of air conditioners and
washing machines is <15% in
25
India vs 50%+ in developed
economies) 22
Increasing disposable 20
income
14%
17
Middle class households 15
13
to increase from 50Mn in 12
2018 to 80+ Mn by 2023 10
9

Easy access to credit

Rise of microfinance & low
cost EMIs are driving easy
access to credit 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F

Rapid urbanization
Expected to increase to 37% Television Small Appliances Washing Machines Microwave
in 2025 from 33% in 2018

Government initiatives to
enhance electrification Refrigerator Air conditioners Water Purifiers
Electrification for all by 2022
under the DDUGJY1 to drive 1. Deendayal Upadhyaya Gram Jyoti Yojana
Note: Exchange Rate – 1US$ = INR 70
penetration across the country Source: Euromonitor; Press Search; Industry Reports, BCG Analysis

88 Digital Powers Consumer Durables

 By 2023, 63% of total consumer durable sales is expected
to be digitally influenced: A $23 Bn opportunity to embrace
A sale is called ‘digitally
influenced’ sale, if the buyer
uses the internet during any
USD Bn stage of the purchase cycle
36.4
e.g. for product discovery,
research and/or purchase.
10.4 Approx
For this report we have
$23 Bn (63%
broken this into two types
of overall sale)
as defined below.
is expected
to be digitally A sale is called ‘digitally
influenced influenced in-store sale’
16.9 12.5 sale when the buyer uses
1.7
internet during the
13.2 purchase cycle but makes
0.9 3.0
10.3 the purchase in-store
0.3 1.7 (offline- brick & mortar
1.0 store).

13.6 A sale is called ‘digitally

10.6 12.3
9.0 influenced online sale’ when
the buyer purchases online.

2013 2015 2017 2023E

Digitally influenced Digitally influenced Non digitally

online sale In-store sale influenced sale

Source:BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital Influence Study 2013, 2015, 2017; BCG Analysis

Decoding Digital Influence 9

 In terms of number of consumers, 55% of urban
consumers will be digitally influenced by 2023
2013 2017 2023E
Digital footprint is defined
as the % consumer durable
buyers with access to % of Urban buyers
internet.
85%
For urban consumers, digital
footprint has grown from 69%
32% in 2013 to 69% in 2017
and is expected to become Digital 32%
85% by 2023 (~2.5x vs 2013). Footprint

Concurrently, digital
influence has grown from 55%
14% in 2013 to 29% in 2017
and is expected to reach 29%
55% by 2023 (~4x vs 2013).
Digital 14%
The % of online buyers Influence
has witnessed exponential
growth from a mere 3% in
22%
2013 to 9% in 2017 and is
expected to reach 22% by
2023 (~7x vs 2013).
9%

Online 3%
Buyers
1. Urban Buyers – Any consumer in urban India who bought any consumer durable in past 1 year
2. Digital Footprint - % urban consumer durable buyers with internet access
3. Digital Influence - % urban consumer durable buyers using internet during any stage of the purchase process
4. Online Buyers - % urban consumer durable buyers buying consumer durables online
Note : Consumer durables include television, air conditioner, refrigerator, washing machines, water purifier, microwave oven & small
appliances; Also, numbers are different from last page as one consumer can buy multiple items & these numbers are only for urban
consumers
Source : BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital Influence Study 2013, 2015, 2017, Press Search,
BCG Analysis
10
10 Digital Powers Consumer Durables
 High digital influence & online buying in other emerging
economies like China & Brazil show potential for India
Digitally influenced consumers in Emerging Markets
A comparative study of digitally
influenced consumers in
emerging markets shows
that India currently lags
50 behind other markets such
as China, Brazil etc. in terms
of digital influence on the
consumer durables purchase
40 Brazil journey. Only ~29% consumer
durable consumers are
digitally influenced in India,
China
as compared with ~90% and
30
~80% in China and Brazil,
% Online buyers Significant respectively.
potential to
For online buyers, the
20 increase share of
difference is starker. Only ~9%
digital influence
consumers buy online in India
& online buying vs ~40% and ~50% in China
Philippines Nigeria and Brazil, respectively.
10 India
South Africa India has the potential to
move up the digital ladder
Morocco Indonesia in the years to come owing
0 to factors like increasing
0 20 40 60 80 100 internet penetration, cheaper
smartphones and data, rise
of vernacular content and
% Digitally Influenced consumers
e-commerce companies thrust
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG – Digital Consumers, Emerging Markets &
on online buying.
the $4 Trillion Future Report, BCG CCI Digital Influence Survey 2017
Decoding Digital Influence 11
 Increasing internet penetration, cheaper smartphones
and data, vernacular content and ecommerce thrust
will continue to drive digital influence
India is currently 1 Increasing internet penetration 2 Falling smart phone prices
undergoing a digital
explosion driven by a Internet users in India Average smartphone price ($)
multitude of factors. These
include:

Increasing internet
1 penetration (650 650
million+ 250-260
million+ internet
users expected in
India by 2020)

Falling smartphone 150-160

2 prices

Significant decline in
3 data tariffs 500

2011

2018
million
Increasing
4 availability of
vernacular content 2020
Sales thrust by
5 ecommerce
companies

These factors will continue

to drive disproportionate 2018
growth in digital influence
over coming years.

Source: Press search, BCG Analysis

12
12 Digital Powers Consumer Durables
 3 Significant decrease in data tariffs 4 Increase in vernacular content 5 Ecommerce companies thrust on
online buying
Data consumed per user per month
(MB) vs Price per MB (Paise)

Promotions and offers

12,000
Jan
2018 20x
Increase in non
English watch time Exchange offers
Data consumed per user (MB)

on Youtube
9,000

No cost EMIs

6,000
Faster delivery
Jun
2017 9 out of 10
Mar New Internet users in
3,000 2017 Sep India are likely to be 24x7 product tracking
2016 Indian language users

0 5 10 15 20 25 Post sale support or service

Price per MB (paise)

Source: Press search, Google Year in Search 2017, 2018, 2019, BCG Analysis

Decoding Digital Influence 13

 Digital influence varies for different durable categories
and is higher for high ASP durables
High ASP1 durables Low ASP1 durables
The extent of digital
influence varies by category ~3 out of 10 of consumers are ~2 out of 10 consumers are
and is higher for high digitally influenced digitally influenced
ASP durables (e.g. TV, AC,
washing machines and 10% 9%
refrigerators) and lower 25% 29% 8% 53%
for low ASP durables (e.g. Washing Small
Microwaves, water purifiers Machine 65% Appliances 83%
and small appliances).
9% 10%
Low ASP durables have
higher percentage of online Air 24% 27% 6% 63%
Water
buyers. A strong 53-63% of Conditioner 67% 84%
Purifiers
digitally influenced buyers
% of consumers

vs only 27-35% for High ASP

durables. 11% 10%
21% 34% 6% 63%
Television Microwave
68% 84%

9%
Online buyers as a %
17% 35% of digitally influenced
Refrigerator 74% buyers is high for low
ASP durables
Digitally influenced Digitally influenced Non digitally influenced
online buyers in-store buyers
Online buyers as a % of digitally influenced buyers
1. High ASP products – Appliances with ASP >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

14
14 Digital Powers Consumer Durables
 DigitalInfluence
Decoding Digital Matters 15
17
 Digital influence varies by demographics; high growth
in women, 35+ age group and tier 2-3 city consumers in
last 4 years
Significant growth observed
in digitally influenced 10x increase in female online buyers over last 4 years
buyers from non-tier 1
cities, women and higher
age group consumers over
the last 4 years.
By Gender 2013 2017
10x growth in the % of
digitally influenced female
online buyers in the last 4
years. 5x growth for men ~5x
in online buying between 3% 15%
2013 and 2017. Male
11% 16%
Significant growth in
digital influence & online
purchases in the 35-55 year
age bracket.

Tier-2 and Tier-3 cities ~10x

have witnessed the fastest 1% 10%
growth in terms of digital Female
influence (5x growth over 9% 10%
the last 4 years).

Digitally influenced online buyers Digitally influenced in-store buyers

Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital influence Study 2013, 2017, BCG Analysis

16
16 Digital Powers Consumer Durables
 3-5x growth in digital influence & online purchases in the 35-55 year age bracket over last 4 years
By Age Group 2013 2017
~2x
18-24 year 3% 13% 17% 15%

~2x
25-34 year 3% 16% 13% 19%

~3x
35-44 year 2% 5% 11% 13%

~5x
45-54 year 2% 2% 14% 7%

~3x
>54 year 1% 4% 5% 8%

5x growth in digital influence in Tier-2 and Tier-3 cities

By City Tier 2013 2017
5% ~2x 18%
Metro 16% 18%

1% ~2x 9%
Tier-1 10% 14%

1% ~5x 8%
Tier-2 3% 12%

1% ~5x 15%
Tier-3 4% 8%

Digitally influenced online buyers Digitally influenced in-store buyers

Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital influence Study 2013, 2017, BCG Analysis

Decoding Digital Influence 17

 For brands, offline market share does not translate
into similar share for digitally influenced purchases
Challengers are leveraging digital platforms over the traditional mediums to
Market leaders in the enhance reach
respective categories are Overall market share1
not necessarily the most % share by brand
effective in driving digital
influence. In washing Brand 1 24%
machines for example, the
overall market leader ranks Brand 2 20%
third in terms of share of
online purchases; losing out
to market challengers in the Brand 3 18%
Washing Machine
online space.
Brand 4 10%
The scenario is similar in
case of other categories like
air conditioners, where only Brand 5 9%
2 of the top 5 overall market
leaders feature in the top 5
brands in online purchases.

Challengers are leveraging Brand 1 21%

digital platforms over the
traditional mediums to Brand 2 18%
enhance reach. Air Conditioners
Brand 3 10%

Brand 4 8%

Brand 5 7%

1.Euromonitor
2.BCG-Google Digital Influence on Consumer Durables Study 2019

18
18 Digital Powers Consumer Durables
Digitally influenced in-store purchases2 Online purchases2

Brand 1 27% Brand 2 24%

Brand 2 18% Brand 5 18%

Overall market share

Brand 5 18% Brand 1 17%

Brand 6 8% Brand 6 9%
Digitally influenced in-store
purchase market share
Brand 4 7% Brand 3 6%

Online purchase
Brand 1 14% Brand 3 26% market share

Brand 3 12% Brand 8 10%

Brand 6 10% Brand 1 9%

Brand 7 10% Brand 6 9%

Brand 2 7% Brand 7 7%

Decoding Digital Influence 19

DECODING
DIGITAL
CONSUMER

20 Digital Powers Consumer Durables

Decoding Digital Consumer 21
 Consumer durable buyers traverse through multiple
journeys before making their purchase decision
All purchase transactions Journeys
can be grouped into 4 broad
archetypes based on the Share of transactions
Pathway
pathway followed for research for consumer durable
and purchase- as shown in the Pre-purchase purchase Post-purchase buyers
exhibit. Pure Online
For consumer durables, - Negligible
nearly all digitally influenced
transactions involve an
omnichannel interaction: Research offline;
buyers typically traverse purchase online
through multiple online &
9%
offline touchpoints before
making the final purchase. To
This complex mesh of become
interactions across online 55%+
Research online, by 2023
and offline channels presents
purchase offline
multiple opportunities for
leading consumer durable 20%
players to delight and influence
the customer journey.

With increase in digital

Pure Offline
influence, % of digitally
influenced consumer durable 71%
buyers is expected to become
~2x by 2023.
Online touchpoints Offline touchpoints
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG CCI Digital Influence Study 2017, BCG Analysis

22 Digital Powers Consumer Durables

Decoding Digital Consumer 23
 Consumer journey and opportunities for intervention
Example 1: Research Offline - Purchase Online for TV

Research Offline
Purchase Online
HI I’M
RAJ Profile Raj wishes to
replace his
existing TV, wants
22 years, Delhi to upgrade to

Offline
Interaction across channels
latest technology

Tech savvy
television buyer Digital Age
ends up buying
6 years
online owing to

Online
The tech savvy
better prices shopper
Decides to check
specifications
online using his
smartphone

Opportunities
Create greater
engagement
through
personalized
content

1. MBOs: Multi brand outlets

Source: BCG-Google Digital Influence on Consumer Durables Study 2019, Industry interactions, BCG Analysis

24 Digital Powers Consumer Durables

 Eg: Television

Pre-purchase Purchase Post-purchase

Tracks product
Gets Word of Mouth rigorously
Visits MBOs1 to check recommendations
different brands & models from friends & family
to ratify features in-person &
receive salesman guidance Further, reads product
reviews and contacts Appreciates
customer care for installation
clarifications regarding support
"money back policy"

Prompted by
Finds 15% discount the app, he
Turns to mobile search on e-commerce site rates the seller
again- explores TV models Orders TV
– he gets excited online, pays
through e-commerce but is also wary of
apps and search engines online
spending.
that allow comparison of
features & prices

Leverage digital Proactive data Reviews from Optimize supply Incentivize post
marketing to driven targeted trusted influencers chain for faster purchase advocacy;
make relevant offers basis past to overcome initial delivery closely manage
recommendations purchases, age hesitation in online social sentiment
and showcase product group/income shopping about the products
offerings profiles

Decoding Digital Consumer 25

 Example 2: Research Offline - Purchase Online
for Microwave

Research Offline
Purchase Online
HI I’M Mamta wants
MAMTA to purchase a
Profile new convection
microwave with
30 years, preloaded dishes;

Offline
Interaction across channels
Bhopal to experiment
with new ways of
cooking

Tier-3 buyer
orders Digital Age
microwave
4 years
online due

Online
The tech savvy
to greater shopper
Searches online
for "convection
availability & microwave
cookware"
variety

Opportunities
Personalization-tailor
messages to consumer
profile

Consumers are increasingly searching

for latest technology & trends. For
example, searches for double-door
refrigerators are growing at >30% YoY
Source: BCG-Google Digital Influence on Consumer Durables Study 2019,
Google Trends data, Industry interactions, BCG Analysis
26 Digital Powers Consumer Durables
 Eg: Microwave

Pre-purchase Purchase Post-purchase

Checks with her sister who Expects next

recently bought a convection Visits local wholesale day delivery
microwave oven; her sister store to see the product.
recommends to purchase However, the model that
from nearby store she has selected is not Gets
available. installation
support

Researches
online using
appliance Returns online
guides, brand Decides the final to complete her Orders microwave
product & adds She rates
websites & purchase online online; avails the the seller
user reviews to cart without COD option
to zero in completing purchase
on the exact
model

Integrate Influencer Digital kiosks Easy financing Online videos,

reviews from marketing, network in stores to options like no virtual assistants
common sites of advocates to extend in-store cost EMIs to drive to provide
with social promote products inventory online payments customer support
media & answer queries and installation
assistance

Decoding Digital Consumer 27

 Example 3: Research Online - Purchase Offline
for Refrigerator

Research Online
Purchase Offline
HI I’M
Sarika is looking
SARIKA Profile to replace
her fridge; to

Offline
31 years, accommodate
the needs of her

Interaction across channels

Hyderabad
growing family

Refrigerator
buyer switches Digital Age
offline for
1 year
salesman
The Patient Searches online

Online
guidance and evaluator using her
touch & feel of smartphone
the product Consumers are increasingly
using mobile devices to do
research. In categories such as
AC, Refrigerator queries from
mobiles are growing at 25%+

Opportunities
Tailored marketing to relevant
age groups/ income profiles to
increase product awareness
Source: BCG-Google Digital Influence on Consumer Durables Study 2019,
Google Trends data, Industry interactions, BCG Analysis
28 Digital Powers Consumer Durables
 Eg: Refrigerator

Pre-purchase Purchase Post-purchase

Visits a multi brand

outlet to explore Fixes an immediate
different brands delivery and
and models Returns home to installation date
confer with family
and friends

Receives salesperson Decides to make the

guidance on size & final purchase offline;
capacity at the store touch & feel and
salesman guidance
factors supersede online
Checks on a benefits
e-commerce Back home, watches
website but product videos
is unable to online on Youtube
understand
features

Use of online tools such

Digital companions Digital kiosks
Digital billboards for as augmented and virtual
like chatbots, expert for faster order
flashing targeted offers reality to help better
recommendations to assist placement and self
to passer-by consumers visualize product, gauge size,
with purchase decision checkout at stores
shape and capacity
Decoding Digital Consumer 29
 Example 4: Research Online - Purchase Offline
for Mixer

Research Online
Purchase Offline
HI I’M
VARUN Profile Varun wants to
purchase a new
mixer to replace
40 years, his existing mixer

Offline
Interaction across channels
Lucknow

Buyer decides
to buy the mixer Digital Age
offline for fear
2 years
of duplicate/

Online
The Patient Actively starts taking
damaged evaluator feedback from
products friend/family online
on the brands that
they use

Opportunities
Proactive data
driven targeted
offers

Source: BCG-Google Digital Influence on Consumer Durables Study 2019,

Google Trends data, Industry interactions, BCG Analysis
30 Digital Powers Consumer Durables
 Eg: Small Appliances

Pre-purchase Purchase Post-purchase

Visits a local store from

where he has purchased
kitchen appliances in
the past; trusts the store
Searches online more than online
by the term
"mixer" for all
brands available Makes final Expects good after
in the category purchase offline sales services from
the dealer

Checks on a e-commerce Seeks sales

websites for prices, person guidance
reviews and ratings of and finalizes the
the product; however, model
doesn’t order online
for fear of duplicate/
damaged product

Recommendations One click user Virtual assistants for Data analytics driven
with similar interests– friendly process for advisory and prompt targeted marketing for
‘people like you also returns and refunds customer support in similar/ related product
buy’ – integrated into in case of damaged case of complaints offerings; personalized
browsing experience products loyalty programs and offers
to drive repeat purchases

Decoding Digital Consumer 31

 Key insights accross 3 phases of digitally influenced
consumer journeys

Brand decisiveness: ~84% in-store buyers and ~74% online buyers are undecided on
1
their choice of brand at start of research

Research Duration: Digitally influenced buyers typically research for upto 2-3 weeks before
2
making the final purchase

Research channel: Digitally influenced buyers use search engines as the primary source for
Pre- 3 online research; social media, online videos, blogs & online forums are other key sources for
online research
Purchase

Search Behavior: Consumers tend to search for high ASP durables by brand and low ASP
4
durables by product specifications

Role of online reviews: 2 out of every 3 digitally influenced consumers rate ‘online
5
reviews’ as important influencer in their purchase decisions

32 Digital Powers Consumer Durables

 Triggers for online purchase: Low price and convenience are the
6
largest drivers of online purchase; choice of multiple payment
options is one of the top 5 drivers

Barriers for online purchase: Absence of in-person guidance and

7
Purchase lack of ‘touch & feel’ are the biggest barriers of online purchase

Channel for online purchase: Buying from e-commerce aggregators

is preferred over individual brands’ website/apps across categories;
8
TV, AC & water purifiers are relatively over-indexed on brand
website or app led purchases

Product Review: Nearly 1 out of every 3 online buyers provides

9 digital review post purchase
Post
Purchase 10
Repeat purchase: ~26% in-store buyers and ~36% online buyers look
for other offerings from the same brand post purchase; propensity
for repeat purchase is over-indexed towards low ASP durables

Decoding Digital Consumer 33

 PRE-PURCHASE
PHASE

34 Digital Powers Consumer Durables

Decoding Digital Consumer 35
 84% in-store buyers and 74% online buyers are
undecided on their brand choice initially
A significant proportion
of both online and
in-store buyers do not
exhibit a concrete brand % buyers who start with % buyers who made
choice at the beginning 1 brand choice & end up their brand decision
of their research cycle. buying the same brand during the research cycle

Only 16% digitally

influenced in-store
buyers and 26% digitally 16%
influenced online buyers
start with 1 brand choice
& end up buying the Digitally
same brand. influenced
84% Consumers are turning
in-store buyers to search to get answers
On the other hand, on the “best” products in
84% digitally influenced the market. For example,
+300% YoY growth in
in-store buyers and terms like “best water
74% digitally influenced 26% purifier 2018”
online buyers made their
brand decision during
74%
the research cycle.
Digitally influenced
online buyers

Opportunity to influence brand

choice using dedicated digital

Question: How many brands were you considering at the start of your research activities? & Was this the brand you had planned to buy initially?
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, Google Trends data, BCG Analysis

36 Digital Powers Consumer Durables

 Digitally influenced buyers typically research for upto
2-3 weeks before making the final purchase

2 out of every 3
digitally influenced
buyers research upto
2-3 weeks before
Online making the final
Buyers 34% 30% 24% 8% 4% purchase.

~65% Online buyers

Around >3
a week A months
month
~60% In-store buyers
research for upto 2-3 weeks before
making the final purchase 2-3 2-3
weeks months

In-store 28% 32% 23% 12% 5%

buyers

Question: How much time passed between the time you started to research and the time you actually bought on your most recent occasion?
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG Analysis

Decoding Digital Consumer 37

 Digitally influenced buyers use search engines, blogs &
social media as the primary source for online research
Digitally influenced in-store
buyers primarily use search
engines (56%) to look for
product information online, Digitally influenced in-store buyers Digitally influenced online buyers
followed by social media
(36%), online videos (26%),
blogs & online forums (24%). % in-store buyers % online buyers
Over 90% of people
In the case of digitally say they discover
influenced online buyers, new brands or

56%
products on
search engines (43%) YouTube

43%
followed by blogs & online
forums (36%) and online Watchtime
videos (31%), e-commerce for Consumer

Brands & e-commerce websites

Brands & e-commerce websites

websites (25%) make up Electronics videos

43%
in India doubled

36%
for top sources for online year over year in

31%
research. 2018
36%

Blogs & online forums

Blogs & online forums

25%
Promotional emails

Promotional emails
26%
Search engines

Search engines
24%
Online videos

Online videos
20%

20%
Social media

Social media
13%

11%
Source for online research Source for online research

Question: Where did you find the information you were looking for online?
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG Analysis

38 Digital Powers Consumer Durables

 Consumers tend to search for high ASP durables by
brand and low ASP durables by product specifications
Category-wise most searched terms
Google trends on most
searched terms indicate
that consumers tend to
Televisions Water Purifiers look for a specific brand
‘Sony TV’, ‘32 inch LED TV’, ‘Eureka Forbes’, ‘Kent RO’, while searching for high ASP
‘Smart TV’, ‘Samsung TV’, ‘Aquaguard’ durables like TV, washing
‘MI TV’ machines etc.

Whereas, while buying a

low ASP durable, they tend
Air Conditioners Microwaves to start with the product
‘Inverter AC’, ‘Voltas AC’, ‘Microwave oven’, ‘OTG’, specification in mind.
‘Lloyd AC’, ‘Portable AC’, ‘Convection oven’, ‘LG microwave’,
However, water purifiers
‘Samsung AC’ ‘Samsung Microwave’
are an exception as
consumers tend to search
for a few specific brands
Washing Machines Small Appliances
of water purifiers than just
‘LG washing machine’, ‘Mixer grinder’, ‘Juicer’, specifications.
‘IFB washing machine’, ‘Electric rice cooker’
‘Fully automatic washing
machine’,

Refrigerators

‘LG refrigerator’, ‘Samsung

refrigerator’, ‘Double door
fridge’

Source: BCG-Google Digital Influence on Consumer Durables Study 2019, Google search trends data, BCG Analysis

Decoding Digital Consumer 39

 A majority of digitally influenced buyers rely on
online reviews to arrive at purchase decision
% respondents who believe that online reviews played a ‘very important’ role in
The influence of online their purchase decision
reviews on the purchase
of consumer durables has Overall High ASP Low ASP
been on the rise. Durables Durables
67% of in-store buyers
and 74% of online
buyers consider online
reviews to have played
67% 68% 65%
a ‘very important’ role in
influencing their purchase
decision. Digitally influenced
Online reviews have in-store buyers
marginally higher
importance for purchase
of high ASP durables vs
low ASP durables. 74% 74% 73%

Digitally influenced
online buyers
More and more people are going to
YouTube to research and learn about
tech products. The searches happening
on YouTube for reviews and unboxing
has doubled since last year for TVs

Question: How important were online reviews/ratings in influencing your decision about what to buy/book/sign up for?
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, Year in Search 2018, BCG Analysis

40 Digital Powers Consumer Durables

Decoding Digital Consumer 41
 PURCHASE
PHASE

42 Digital
DigitalInfluence on consumer
Powers Consumer durables
Durables
Decoding Digital Consumer 43
 Low price and convenience are the largest drivers of online
purchase; Choice of multiple payment options in Top 5 drivers

I have bought three

electronic appliances in
just last year – Fridge, % online buyers
Washing Machine, Cooler
– and I didn’t face any Low Price 52%
problem. I got good
discounts and EMI options Non-metro television
online. So why not T.V.?” Convenience 46% buyers believe ease of
returns & refunds to be
- Online buyer, Male, Ease of returns the key trigger
Indore & refunds 40%

Availability 29%
Product availability
We had gone to a local is the key trigger for
store to window shop Multiple
24% online purchases in
& check out the screen payment options
Tier-3 cities
size we wanted. But the
Helps making
salespeople are quite 19%
informed decisions
impatient. They want you
to just purchase. So we
Post sale support 19% Washing machine and
didn’t consult them. Had a
AC buyers consider
look and returned.”
‘good post sale support’
Variety 15% as one of the top 3
- Online buyer, Female,
Delhi triggers for online
Status symbol 14% purchase

Percentages mentioned are on a base of total consumers and not relative in nature, the total may exceed 100%
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG research & analysis

44 Digital Powers Consumer Durables

 Absence of in-person guidance and lack of ‘touch & feel’
are the biggest barriers for online purchase

I did a search on Amazon

app and Google. There
% In-store buyers
were a lot of options. But
I got so confused. Then I
Absence of in-
person guidance 51% asked my senior at work, he
suggested a nearby store.
More critical for He said that they have a
Lack of 49% sale of high ASP good team to guide on this
touch & feel matter.”
durables, vis-à-vis
low ASP durables
- Offline buyer, Male,
Fear of duplicate/ Mumbai
damaged products 38%
~50% of Tier-2 and
Tier-3 buyers consider
potential delivery of
Delayed delivery & 36% The interaction with the
installation damaged/duplicate
products to be the sales staff, discount offered
key barrier for online and trust/point of contact
purchase were the key reason for
Concerns regarding
online payments 26% purchasing the product
offline.”

Difficult to repair & - Offline buyer, Female,

service the product 27%
Mumbai

Percentages mentioned are on a base of total consumers and not relative in nature, the total may exceed 100%
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG research & analysis

Decoding Digital Consumer 45

 Buying from e-commerce aggregators preferred over
individual brands’ website/apps
Highly imperative for brands to simultaneously compete & collaborate
Individual brands’ websites
/ apps contribute to only
~10% of the total online
purchases. Nearly ~90% % of online buyers purchasing from brand website / app
of online buyers buy from % online buyers
e-commerce aggregators.
17%
TV, AC & water purifiers are Television
90%
relatively over-indexed on
brand website or app led
purchases. Nearly 17% of 16%
online buyers for TV, 16% Air Conditioner
for air conditioner and 12%
for water purifiers purchase
12%
from brand website / app.
E-commerce Water Purifiers
aggregators
7%
Washing Machine

7%
10% Small Appliances

4%
Brand website Microwave
or App

3%
Refrigerator
Question: Which website or app did you buy from?
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG analysis

46 Digital Powers Consumer Durables

Decoding Digital Consumer 47
 POST-PURCHASE
PHASE

48
48 Digital
DigitalPowers
PowersConsumer
ConsumerDurables
Durables
Decoding Digital Consumer 49
 Nearly 1 in every 3 online buyers provides digital
review post purchase
32% of online buyers 32% of online 60-65% in case of Interaction on social media,
provide product reviews buyers provided a other digitally evolved brand website and online blogs
online after purchasing a digital review post / forums are the key modes of
countries such as China
consumer durables across purchase in India review
category.

Buyers typically post on Posted on the 13%

% of online buyers
the brand’s social media brand’s social media page
page for providing product
reviews; closely followed Shared a review on 12%
by writing on the brand’s the brand’s website
website.
32%
Other than providing Provided Shared or liked a post or page 11%
reviews and a digital of the product via social media
recommendations; review
buyers typically engage Wrote on blogs or
in other post purchase online forums 11%
activities such as seeking
information on installation
& use, availing warranty Recorded and posted an 11%
services, downloading the Did not 68% online video review
brand’s app & searching provide Wrote an
for more/ similar offerings a digital email to the 8%
from the same brand.
review company

5 10 15
% of online buyers
Question: How did you share your review or recommendation?
Note: Percentages mentioned are on a base of total consumers and not relative in nature, the total will exceed 100% because of choice
of multiple selections to the question
Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG Analysis

50 Digital Powers Consumer Durables

 26% in-store buyers and 36% online buyers look for
other offerings from the same brand post purchase
26% in-store buyers who 36% online buyers who
Approximately 36%
Product Category look for similar offerings look for similar offerings
online buyers and 26%
from the same brand from the same brand post
offline buyers either
post purchase purchase
research for more
27% 34% offerings from the same
Television brand and/or buy more
from the same brand
24% 30% post purchase of a
Air Conditioner consumer durable.

This propensity for

23% 34% repeat purchase is over-
Washing Machine indexed towards low ASP
durables as compared to
high ASP durables.
26% 27%
Refrigerator

24% 43% Propensity for

repeat purchase
Water Purifiers
increases as ASP
decreases
34% 41% Opportunity to
Microwave cross sell through
dedicated digital
26% 40% marketing efforts
Small Appliances

Question: What did you do after completing the purchase?

Source: BCG-Google Digital Influence on Consumer Durables Study 2019, BCG Analysis

Decoding Digital Consumer 51

SEIZING THE
OPPORTUNITY

52 Digital Powers Consumer Durables

52
Seizing the Opportunity 53
 Key themes to leverage the digital influence opportunity
Key takeaways How to win Case study

Digitally influenced sale will grow Set up investments and create right
disproportionately. However, it digital organization structure to 1 2
varies by categories capitalize this opportunity

Offline market share does not Achieve fair share or strive to beat
translate into digitally influenced the market leaders in the future 3 4
share through digital leadership

~80% of digitally influenced

Focused interventions at individual
consumers finalize the brand
consumer level across journey 5 6
during the research cycle, in a short
touchpoints
window of 2-3 weeks

Lack of “in person guidance” and

Leverage technology solutions like
“touch and feel” biggest barriers to 7 8
AR/VR to mitigate barriers
online purchase

Drive post purchase experience

30%+ digitally influenced
and amplify advocacy at scale to 9 10
consumers post reviews online
influence new consumers

54 Digital Powers Consumer Durables

54
What does this mean for Consumer Durable players?

From To

Digital as a Digital as the core of

small channel future marketing

Focus on driving End-to-end consumer

purchase engagement

Mass Personalized
marketing interventions

Battling offline Driving digitally

market share influenced share

Company-driven Enabling advocacy

communication at scale

Seizing the Opportunity 55

 Case study 1

Align digital budgets to tap the opportunity early

Leveraging digital
and social media
platforms enabled Analytics based
customized marketing
the company to
efforts to tap rich
A leading drive its ‘celebrating
available data and
the new’ campaign
multinational and garner over a
drive actionable
consumer insights
electronics million views within
company’s a day of the launch
digital budget
went up from
high single- digit
figures in 2014
to ~30% of its
total marketing
budget in 2018

Source: External reports, Press search, BCG Analysis

56 Digital Powers Consumer Durables

Case study 2

Digital initiatives to be complemented with

organizational enablement to ensure success

A leading Indian consumer goods company re-organized itself to carve out

digital business as a separate business unit to ensure right focus at senior
management level

Select examples
A mid sized Indian consumer company set up digital brand team to enable from India
efficient digital marketing ecosystem for larger group of brand managers & and globally
driving synergies on increasing
importance of
organizational
enablement

An American electric car-maker selling its cars online through its website, is
using social media platforms, such as Twitter, to allow customers to interact
directly with the company, including its leadership

Source: External reports, Press search, BCG Analysis

Seizing the Opportunity 57

 Case study 3

Achieve fair share or strive to beat the market leaders in

the future through digital leadership

The smartphone maker held

~51% market share of online
smartphone sales as of 2017
Nearly 80%
The founder believes the company to be
of sales for a more in the e-commerce business, than as
leading Chinese a smartphone manufacturer. This indicates
smartphone the company’s focus towards online
maker comes presence and digital leadership

from online The company also manages social media sentiment

channel by creating a buzz for it’s products and flash sales,
offering incentives for retweets, how-to-guides, and
events like photo contests etc.

Source: External reports, Press search, BCG Analysis

58 Digital Powers Consumer Durables

Case study 4

Critical to simultaneously compete & collaborate in the

e-commerce space

A leading
European
Focus on leading online It aims to hit a target of It uses its ever-widening sportswear
retailers helped a €4 billion ($4.9 billion) portfolio of apps to manufacturer
European sportswear by 2020 by leveraging push rarer — and more
uses its app to
company achieve €1.5 the likes of both leading expensive — products,
billion ($1.9 billion) in e-tailers and retailers while using other online push rarer &
online sales in 2017, as well as its’ company retailers to sell its cheaper more expensive
an unprecedented 57% owned channels, products products, while
growth over the previous particularly its apps
year
online retailers
sell its cheaper
products

Source: External reports, Press search, BCG Analysis

Seizing the Opportunity 59

 Case study 5

Focused interventions at the consumer level in their

research journey

A leading Indian hypermarket retain

chain has created ‘Smart Search’ where With this campaign, the company
anyone who searches for anything with successfully added young digital
the company name prefixed is offered customers, who seek offers and
exclusive offers from the company which
A leading Indian can be redeemed across its network of
information online, to its fold and
drove them to shop at its stores
hypermarket 225 stores throughout India
retail chain
is targeting
consumers
with focused
Over 1,80,000 discount coupons
interventions were distributed against each search
in their search on every occasion, which saw an
journey increase of more than 30,000 people
visiting the retail chain’s stores

Source: External reports, Press search, BCG Analysis

60 Digital Powers Consumer Durables

Case study 6

Leverage AI to generate data-driven actionable

business insights

An online healthcare
platform connects patients
with doctors in real time
using chatbots. They have
dedicated doctors at the
backend but are building an
AI layer to scale operations
An Indian
healthcare
venture which
provides online
They have built AI engines which
process over 10 million minutes The company then performs consultations
of talk time every month. This analytics on this data to is using AI to
generate actionable business
has enabled them to profile their pitch the right
customers for their preferences, insights (Eg: the company
is aware to what extent the product to the
likes and dislikes and the kind of
queries they raise agents were able to answer right customer
the queries and accordingly
pitch the right product)

Source: External reports, Press search, BCG Analysis

Seizing the Opportunity 61

 Case study 7

Bring the physical ‘touch & feel’ and eliminate other

related barriers to digital purchase

A large global furniture retailer brings the ‘touch &

feel’ experience to the digital consumer through the
use of augmented reality to improve the furniture
buying experience

A large global
furniture retailer
uses augmented Consumers can preview how furniture will look like in
reality to help life-size proportions in their homes and order directly
consumers from the free app
visualize furniture
in their homes

This initiative has greatly helped in eliminating the

barrier of ‘lack of touch & feel’ in online buying

Source: External reports, Press search, BCG Analysis

62 Digital Powers Consumer Durables

Case study 8

Use technologies like AR/VR to create immersive

environments and provide engaging experience for users

As a result, the ad netted

nearly 10 million views with
65% audience retention
One of India’s top
e-commerce brand
created a TrueView
in- stream ad with
state-of-the-art VR360 A leading Indian
equipment in an effort e-commerce
to reach consumers on brand created an
their mobile devices
ad with VR360
equipment to
reach consumers
on their mobile
The VR360 project capitalized on the devices
growing prominence of on-demand
music, smartphone penetration and
effective use of media. The results
of this project -from retention rates
to brand lift – surpassed all internal
benchmarks.
Source: External reports, Press search, BCG Analysis

Seizing the Opportunity 63

 Case study 9

Leverage digital for continued post purchase experience

The company’s users will

now be able to interact with
Google’s virtual assistant
to get answers to various
An Indian telecom giant is queries pertaining to their
offering Google Assistant- subscribed plans, data
based Digital Customer usage and account balance.
Care experience to step up Notably, the feature is
the customer experience available for both, the
An Indian global
postpaid and prepaid users
communications
services company
is leveraging
technology to The newly launched feature
is part of the company’s
make digital
Project Next - it’s digital
self-care more innovation program, aimed
interactive at transforming customer
experience across all of its
services and touch points

Source: External reports, Press search, BCG Analysis

64 Digital Powers Consumer Durables

Case study 10

Re-imagine the role of advocacy

Interestingly, the
company’s bookstore
has less than 5000
titles, compared with
the millions of titles in
its online store. Using
technology and big
A US chain of retail data around customer
bookstores uses reviews, the company
customer ratings, has been able to make
reviews and data
collected from their
the shopping experience A US chain of
more efficient & effective
e-commerce business retail bookstores
and Kindle devices to offers a curated
display books that are
most likely to entice range of books
The featured books
readers to make a
table isn’t selected
based on online
purchase
by a local employee popularity
or organized by latest hyped
releases—it’s a selection of
most highly rated online books

Source: External reports, Press search, BCG Analysis

Seizing the Opportunity 65

NOTE TO THE READER
ABOUT THE AUTHORS
Nimisha Jain is a Partner and Managing Director in the New Delhi office of Boston Consulting Group and leads the Center for Customer
Insight for Emerging Markets. She is also the India Lead for Marketing, Sales & Pricing. Anubhav Pateriya is a Senior Principal in the New
Delhi office of Boston Consulting Group and works extensively with consumer and retail companies. Kanika Sanghi is a Partner & Associate
Director in the Mumbai office of Boston Consulting Group and leads the Centre for Customer Insights in India.

ACKNOWLEDGMENTS
This report has been prepared by Boston Consulting Group in collaboration with Google India. We would like to thank and acknowledge
the contributions of Vikas Agnihotri (Country Director, India Sales), Shaurab Kapadia (Industry Head – Technology), Prabhanshu Pandey
(Principal Account Manager – Technology) and Bhavna Jagwani (Industry Analyst – Technology) from Google India Pvt Ltd and Ankur Jain,
Akash Sethia, Viren Rajani and Ity Jain from Boston Consulting Group. We would also like to thank Kantar IMRB for conducting extensive
quantitative survey of 6800 consumer durable buyers & qualitative discussions for BCG-Google Digital Influence on Consumer Durables
Study 2019. A special thanks to Jasmin Pithawala for managing the marketing process and Jamshed Daruwalla, Saroj Singh and Divya
Mehrotra for their contribution towards design and production of the report.

FOR FURTHER CONTACT

If you would like to discuss the themes and content of this report, please contact:

NIMISHA JAIN ANUBHAV PATERIYA VIKAS AGNIHOTRI

Partner & Managing Director Senior Principal Country Director, India Sales
BCG, New Delhi BCG, New Delhi Google India Pvt. Ltd.
+91 124 459 7210 +91 124 457 5659 +91 22 66117129
[email protected] [email protected] [email protected]

KANIKA SANGHI SHAURAB KAPADIA

Partner & Associate Director Industry Head - Technology
BCG, Mumbai Google India Pvt Ltd.
+91 22 6749 7134 +91 124 451 2900
[email protected] [email protected]
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07/19