BWI: Household & Socio Economic Segments “C” Emerge as New Engines of Growth for PCs

Press release from Business Wire India
Source: MAIT
Wednesday, September 05, 2012 04:00 PM IST (10:30 AM GMT)
Editors: General: Consumer interest, People; Business: Business services, Electronic appliances & components, Information technology; Technology
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Household & Socio Economic Segments "C" Emerge as New Engines of Growth for PCs


New Delhi, Delhi, India, Wednesday, September 05, 2012 -- (Business Wire India) -- -- PC sales up by 16% in 2011-12 to cross 10.8 million.
- Desktop grows by 11%
- Notebook grows by 26%
-- Tier II & III towns emerge as big drivers contributing 59%
-- Household share rises to 55% in PC market.
- 53% of Desktops
- 60 % of Notebook
-- SEC "C" segment builds traction. Grows 45% and constitutes 36% of the industry.
-- MNC Brands share increases to 59%. Indian Brands share declines.

MAIT, the apex body representing India's IT hardware, training and R&D services sectors, today announced the findings of its Industry Performance Review for the financial year 2011-12. The total PC sales between April 2011 and March 2012, with desktop computers, notebooks and netbooks taken together, were 10.8 million units, registering a growth of 16% over the last fiscal. The sales of desktops stood at 6.7 million units registering a growth of 11%. Notebooks recorded a consumption of 3.7 million units, growing 26% over the last year.

Commenting on the industry performance, Dr. Alok Bhardwaj, President, MAIT, said: "The industry experienced very nervous business environment in 2011-12. The year has been plagued by many problems like Hard Disk shortage and inflation accompanied with rupee devaluation. The market has actually performed quite well considering the above circumstances and the growth seems to be at a consolidation stage for PC market. The bright point in the last year PC market saw the surge in PC penetration in the SEC "C" Households, with impressive growth of 45%. Infact it constituted 36% of the industry. The trend of households emerging as major drivers of the industry continues. It accounted for 55% of PC market."

"The current economic slowdown is well reflected in the sentiments that we measured for 2012-13. The PC industry is expected to grow @ 15% to reach 12.4 million units in 2012-13. Some steps in macroeconomic drivers can push the growth to higher levels. Rising contribution of the SEC "C" segment and higher internet and PC penetration in smaller towns may give desktops stronger traction", Dr. Bharadwaj further added.

MAIT Executive Director, Mr Sabyasachi Patra said: "The PC market growing by 16% and crossing 10 million mark and the internet penetration growing by 15% despite the Tsunami in Japan, Thailand floods and steep slide of the Rupee is a very heartening sign. Considering its multiplier effect on the economy and especially since a major growth is witnessed in the Class II and Class III towns, we strongly urge the Government to provide cheaper loans to the common man so that PC and internet penetration can be further increased and reduce the digital divide".

The annual MAIT Industry Performance Review - ITOPs, conducted by India's leading market research firm IMRB International is a survey of the IT hardware sector's efforts to manage the business environment, gauge the market potential and consumer trends. This round of the study involved face-to-face interviews with over 28,000 respondents selected randomly across 35 cities in India. The MAIT-IMRB study was initiated in 1996-97 and encompasses five broad product segments - computers, networking products, printers, other peripherals and Internet connections. Apart from the yearly review, a supply-side estimation module is used to monitor industry performance every half-yearly, alternating with the annual review.

Some salient findings of the 2011-12 Study are given below.

The Notebook Market:

-- The Notebook and Netbook combined sales, which posted a growth, last year (31%), posted a healthy growth of 22% this year despite the rising inflation. This growth was primarily driven by the Household segment, which accounted for about 58% of the total Notebook sales and registered a growth of 26% during 2011-12 over the previous year.
-- Similar to the last year, the contribution among lower SEC's (SEC B and SEC C) was on the increase contributing around 55%, but this has mainly come from SEC C which is an encouraging sign among hardware makers posting a huge growth of 45%
-- Notebook sales among Establishments during 2011-12 ended with a growth of 18%.The growth has mainly come from Small and Large Establishments posting a significant growth rate of 38% and 35% and Large Establishments has increased its contribution to 55% from 48% from the previous year 2010-11.
-- Netbook registered sales of 2.87 lakh unit, and the market has gone for a decline of 11% over the previous year. The decline has largely come from Establishment which has registered a negative growth of 35%. But in the meantime, the HH segment has shown a positive growth of 32%

The Desktop Market:

-- Market segmentation by businesses vs. household consumption: For the first time in the market, the Household Desktop market contribution has overtaken the Establishment contributing 53% and 47% respectively.

-- Household contribution to the Desktop market increased to Fifty-three per cent of the total desktop market during 2011-12 from 50% during the previous year. With this, households also registered a growth of 17% during 2011-12 over the previous year.

-- Market segmentation by town-class: The top four metros, accounted around 28% of the total desktops purchased, while the Class B cities accounted for thirteen per cent of the market. Consumption in top four metros grew by a meagre 4 per cent, while that in Class B cities it grew remarkably by twelve per cent. Smaller cities, contribution has increased from 57% to 59% and managed to post a healthy growth of 15%


The Servers Market:

-- During the year 2011-12, sales of Servers registered a growth of 3% over the last financial year posting a figure of 90,699 units.


The Peripherals Market:

-- Overall printer sales have de-grown by five per cent during 2011-12 over the last fiscal to reach 2.96 million (29.6 lakh) units.

- Laser printers had stagnant sales with a consumption of 1.38 million (13.8 lakh) units and a growth of nil percentage over last year.

-- Consumption of inkjet printers stood at 1.19 million (11.9 lakh) units and registered a negative decline of 12%. While Businesses segment posted a negative growth of 14%, Household posted a negative growth of 12%

-- Dot-matrix printers was the only printer category that registered some positive growth, the sales of DMP at 0.39 million (3.9 lakh) units in 2011-12 with a growth of 2% over the previous year. This growth has come from Establishment segment registering a growth of 2% while Households registered a negative growth of 1%

-- The UPS market had a sales of 2.54 million (25.4 lakh) with Establishment segment posting a strong growth of 11% while Household market had a growth of 6%

The Internet Entities:

-- The number of active Internet entities posted 15.9 million in March 2012 i.e. a growth of fifteen per cent over March 2011.

-- Internet penetration in the 22 cities was sixty-three per cent among businesses and thirty-two per cent among households.

-- Dial up contributed around 40% of the total internet connection in Establishment while ISBN, Leased Line, Data card contributed around 13%,10% and 22% respectively in 2011-12.

Summary of Findings:

Definitions:

-- Top four Cities/Metros/Class A cities - Delhi, Mumbai, Chennai, Kolkata
-- Next four Cities/Class B Cities - Bangalore, Hyderabad, Ahmedabad, Pune
-- Class C Cities/Towns: Other Smaller Towns/Cities
-- Internet entities - Entities are establishments/individuals with Internet connection; an entity could house multiple users.

About the study:

ITOPS is a syndicated end-user based study on the IT hardware market conducted by the eTechnology Group of IMRB International since 1996-97. The study is based on over 15,000 face-to-face interviews with end-users spread over 17 cities, with data projected to the 'all India urban market'.

The MAIT-IMRB study involves data collection after the 'last mile' that the product travels, i.e. from the premise where the product is finally installed. It is therefore an accurate estimate of 'what' was bought, 'by whom', and for 'what purpose'. Since the MAIT-IMRB study is based entirely on data collected from 'users', it is able to accurately estimate the large unorganised market as well as direct imports. It does not suffer from shortcomings of estimates based on shipment or supply which in addition to under or over-counting, may also reflect biases in perception of vendors and resellers.

With thirteen consecutive years of ITOPS data, the study is now able to closely track emerging segments such as small offices, home users, first time buyers, etc. and identify the role of key drivers for purchase such as the internet. By virtue of tracking the installed base built over the
years, and monitoring the extent of upgradation/ replacements taking place in the market, the study has been able to identify emerging business opportunities that promise to expand the market for IT products in India.

About MAIT:

Set up in 1982 for purposes of scientific, educational and IT industry promotion, MAIT has emerged as an effective, influential and dynamic organisation. Representing IT hardware, training, R&D, and associated services in India, MAIT's charter is to develop a globally competitive Indian IT Industry, promote the usage of IT in India, strengthen the role of IT in national economic development and promote business through international alliances.

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http://www.BusinessWireIndia.com/attachments/Summary_of_Findings(1).pdf
Summary_of_Findings(1).pdf


CONTACT DETAILS
Krityanand Kundan, IPAN Hill & Knowlton, +91 9990099562, Kkundan@ipanhillandknowlton.com

KEYWORDS
CONSUMER, PEOPLE, BUSINESS SERVICES, ELECTRONICS, IT, TECHNOLOGY

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