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Another Round of Disruption Imminent

Leading brands are looking for growth from advanced TV technologies. Chinese manufacturers are continuing to make a dent with aggressive pricing, albeit sustainability may be a difficult proposition. In the meantime, the millennials and younger viewers are adamant on viewing TV anywhere, anytime and from any device.

The nature of televisions is changing. With emerging technologies and new consumer behaviors, organizations need to adapt to a market and media landscape that is complex and ever evolving. This requires continuous innovation, agility, and transformation. Usage of television is no longer an urban phenomenon with penetration of television in more than 99 million homes in rural India.

The Indian television market seems to be heading toward another disruption. 2018 saw share of other brands (apart from the top three brands, Samsung, LG, and Sony) and unorganized players increase.

In 2018, the FPD market is estimated at 14 million sets, valued at Rs 20,000 crore. Samsung, LG, and Sony had a combined share of 55 percent. This is a decline from the 67-percent combined share the three had in 2017. Panasonic and Haier were aggressive in 2018. Onida, brought back its iconic devil, but did not make much of a dent.

Daiwa, Akai, Vu, T-Series, Truvison, Wybor, Daenyx, Intex, Micromax, Mitashi, Lloyd, Sharp, Sansui, Sanyo, JVC, Aisen, Philips, and Blaupunkt all jostled for consumer attention in an attempt to be the preferred brand and take the slot vacated by Videocon.

Brands update
Samsung Electronics’ consumer electronics business, took a hit in 2018 with sales declining from KRW 44.6 trillion in 2017 to KRW 42.11 trillion in 2018, though operating margins improved from KRW 1.8 trillion in 2017 to KRW 2.02 trillion in 2018. In India, this could be attributed to the intense competition and sales taking a hit in the 32-inch segment – which accounts for almost 50 percent of total TV market – from the online-focused brands like Vu, BPL, Xiaomi, and Thomson, and the unorganized players’ stronger presence in 2018. Samsung has decided to focus on the higher-margin premium and large-screen TV models. With the recent hike in import duty on open-cell TV panels, the vendor discontinued its annual production of 1 million TVs at its Chennai plant, and proceeded to import from Vietnam, India’s FTA partner country.

LG Electronics India completed its 21-year-long journey in India in 2018. The company in a video, released at the anniversary celebrations, reiterated its determination to develop innovative products and solutions that act as a catalyst in offering better lifestyle to all its consumers. The company is stepping up its efforts to design and manufacture innovative products and solutions that satisfy the specific requirements of Indian customers. Incidentally, the company has just released its annual financial results. The LG Home Entertainment Company recorded full-year revenues of KRW 16.21 trillion (USD 14.37 billion) with a record-high profit of KRW 1.52 trillion (USD 1.35 billion) thanks to the strengths of LG’s premium product lineup. Fourth-quarter 2018 sales of KRW 4.56 trillion (USD 4.04 billion) were 6 percent lower from the previous year but 23 percent higher than the previous quarter due in large part to strong seasonal demand. Going forward, LG intends to grow both revenue and operating profit by focusing on increasing sales of premium OLED TVs and large-screen UHD TVs.

The first non-Japanese managing director heading Sony’s operations in India, Sunil Nayyar, came on board in April, 2018. Nayyar is unequivocal in the company’s strategy of not playing the price game. The brand would continue enhancing the premium line-up and grow its contribution to overall revenues. The company claims a 40 percent market share in terms of value in the premium TV segment (55-inch and above segment). The company has been working on further localizing its products in the past one year through its third-party contract-manufacturing arrangement with Foxconn Group’s subsidiary CTTI in India. Sony Corporation results, in 9 months ended December 31, have seen a drop in television sales and operating revenue from 700,403 million yen in 2017 to 642,513 million yen in 2018.

Xiaomi, having established its dominance in the cellphone segment, has shipped 1 million smart TV sets since its entry in the Indian market in 2018. With an aggressive pricing strategy of keeping just a 5-percent margin, the company in October 2018, also announced that it would manufacture its popular Mi LED TVs in India. It has partnered with Dixon Technologies at its state-of-the art facility in Tirupati. The factory will churn out 100,000 Mi LED TVs per month by the first quarter of 2019. The company, at present focusing on top 50 markets in the country for its offline presence, has set itself an expansion target of entering 500 new towns in the country.

TCL, its Chinese counterpart, is close behind. On December 20, 2018 it kick-started the construction of a smart integrated manufacturing Industrial Park in Tirupati. The primary facility of the Industrial Park will be a panel module factory – the first overseas production unit of TCL’s subsidiary, Shenzhen China Star Optoelectronics Technology Co. Ltd. (CSOT). The factory has an annual production capacity of eight million 22-inch to 55-inch, large-sized TV screens and 30 million 3.5-inch to 8-inch, small-sized mobile screens. The Industrial Park will also include a smart TV manufacturing facility to integrate the panel module and TV set production. The facility will have a manufacturing capacity of 6 million 32-inch to 65-inch TV sets per year. The TCL industrial park is scheduled to commence operations from the fourth quarter of 2019. The manufacturing facility will not only be responsible for churning out TCL products, but will also offer ODM services to other domestic brands.

Haier India plans to invest Rs 3000 crore over four years to set up an industrial park at Greater Noida in Uttar Pradesh. This expansion will serve as an opportunity for vendors and original equipment manufacturers (OEMs), bringing about an expanded business with increased local production and lesser imports of products. This is in line with the Indian government’s Make in India initiative. The company has a manufacturing facility in Ranjangaon, Pune. The company aims to touch the USD 1 billion mark by 2020 in revenues and be among the top three consumer electronics brands in the country.

Intex has launched five new models of LED TVs – 55-inch UHD, 43-inch, 50-inch FHD, 43-inch FHD, and 32-inch HD. The company also unveiled a free-to-air television with an in-built set-top box and a dish antenna, targeted at Tier-III and Tier-IV markets, with poor set-top box penetration. The free-to-air television is currently available in four states including Uttar Pradesh, Bihar, Uttarakhand, and Jharkhand in the first phase, with plans to take it to Gujarat and Maharashtra in the future.

Daiwa continues to expand its product portfolio and has brought innovation to its newest range of launches. The spirit of the company is that consumers must enjoy the best, with no compromise on quality or technology. In sync with the growing trend of 4K TVs, the brand has an exciting new line up of products. Very recently two AI-powered, 4K ultra HD Quantum Luminit smart LED TVs have been launched in 124 cm (49-inch) D50QUHD-M10 and 140 cm (55-inch) D55QUHD-M10 at cut-throat prices. Seeing the positive response of these two, a 65-inch Quantum Luminit TV is also planned.

In 2018, Vu launched a new range of smart televisions – the Pop Smart, Office Smart, and Premium Smart. Aimed at today’s internet generation, the smart TVs range in size and price from 32-inch to 75-inch, and Rs 22,000 to Rs 250,000.

Akai has a wide range of affordable LED TVs ranging from 24 inch to 65 inch in various variants, which are both in the normal and smart segments along with 4K UHD. Akai, in terms of technology, is supported by leading Korean and Japanese brands and is considered to be of high quality. One of the differentiating factors of Akai has been that even though they offer all the features and specifications of a high-end smart TV, the cost of it has been kept taking into consideration the spending capacity of India’s working middle class.

Just before the onset of festive season, Truvison launched its fresh line up of smart TVs in bigger screen size. And then again in December 2018, it extended its TV portfolio with the launch of TW3262 32-inch TV, combined with high-performance engine and high-speed response. Having in-built NES games, it brings versatility to the gaming experience. Truvison TVs have witnessed a great demand and have emerged to be one of the promising brands in a very short time of entering the Indian market. The team is excited about the encouraging response the brand is receiving from India, ever since its launch. Its continuous endeavor is to live up to the promise of innovative technology at an affordable price.

Daenyx International is targeting a 100-percent growth in turnover as compared to last year’s and 200-percent growth in terms of partner network. Daenyx believes in working through a standard policy which includes the periodical development of products, keeping in mind the needs of contemporary times and the latest technological standards of the industry. The aim is to produce innovative utility products for a comfortable lifestyle and give an elegant touch to the number of households that put their trust in the brand to ensure that the company keeps up with the technological advancements, investing heavily on research and development. The key scheme with which the brand has anchored itself is value creation for all consumers.

Wybor is a premium brand launched by Malhotra Electronics Private Limited (MEPL). The inception of MEPL took place 41 years ago and it is now an electronics and home appliances manufacturing company that caters to its customers globally and across India as OEM/ODM for LED TVs and semi-automatic washing machines. Over the years, with an experience of end-to-end manufacturing in consumer electronics, MEPL has brought enormous innovation to the table. MEPL’s indigenous determination has driven them to a strong position, that is, a combination of domain expertise and comprehensive back-end integration of manufacturing capabilities.

T-Series is a well-established strong brand in the Indian market and has an established, strong network of distribution through branches that are attached and loyal to the company for over decades. T-Series’ consumer electronics products are regarded as true value for money.

Production at BPL has also started for 32-inch and 40-inch sets, and plans are to expand to include larger screens and smart TVs.

Super Plastronics (SPPL), a brand licensee to make televisions for Eastman Kodak Company and Thomson in India, having reported a revenue of Rs 220 crore in 2017-18, is looking to more than double its revenue to Rs 500 crore by the end of this financial year, riding on the back of new brand addition, improved sales, increased presence through major e-commerce portals and modern retail counters, a larger network, and a new manufacturing line in its facility at Noida.

China-based Skyworth Electronics, with its Metz brand, is looking to garner around 6 percent share, of the fast-growing LED TV market here by 2021 as it expands its network and product portfolio. The company expects to have around 0.8 percent market share in the LED TV segment this year and 2.5 percent in 2019.

247around serves as a unique buddy for all TV and home appliances post-purchase needs, from installation to disposal. Service facility is available through its Android App, website or call center. The company caters to a market with 700 million appliances population. 150 million appliances go for repairs every year. Quality repair at an optimum price is a challenge here. 247around has addressed this issue by a qualified on-ground team, which has several years of experience and enables customers to do self-diagnostics and decipher the issue on its Android app. Reasons for failure and price estimates can be seen much before the engineer arrives at home, thus saving time and money and bringing transparency in the process. Analytics combined with artificial intelligence and IoT form the technology backbone and eliminate key issues of quality in home appliances servicing and repair. With technology-assisted analytics-based training, the on-ground engineers take better repair decisions, challenging traditional models. 247around is the first company to use analytics-based approach, which has found value proposition for customers.

E-commerce market. The online televisions market is growing in India with the entry of several new brands such as Xiaomi and TCL. Other leading brands in this market include Vu, TCL, Sharp, BPL, Kodak, Micromax, Panasonic, and Sanyo, with mainstream brands like LG and Samsung too expanding their presence.

Unorganized players. The unorganized players thrived in 2018, with sales increasing from 1 million sets in 2017 to 3 million sets in 2018. Change in the tax structure is the sole major contributory factor. With excise tax and customs duty subsumed in GST, the small players had a field-day importing sets, and selling them, particularly in Tier-II and Tier-III cities, and semi-rural areas. These were largely 32-inch screen size, as the larger sets remained the domain of MNC brands.

Smart TVs. The Indian smart TV market is expected to grow at a CAGR of 30.2 percent during 2018–2024, according to ResearchAndMarkets. In 2018, smart TVs had a 50-percent share in September compared to 45 percent in January.

Substantial investment flows by video streaming media companies like Netflix, Amazon Prime, and Hotstar has led to an increase in the number of Pay-TV subscribers. Furthermore, the rise in disposable income levels and growing internet penetration in the country has also contributed to an increase in sales of smart TVs.

Households in India are at a cusp of transition, and a shift in preference has been witnessed from conventional TV sets to smart TV sets. Changing the lifestyle of middle-income population is attributed to the rise in income level, increasing awareness, adoption of new technology, and increasing internet penetration. Additionally, government initiatives primarily in Tier-II and Tier-III cities are some of the key factors, which are likely to bolster the growth of the Indian smart TV market.

Amongst all the verticals, the residential vertical was the highest revenue contributor toward smart TV market in India. The residential vertical is likely to maintain its dominance over the next few years as well, and is likely to witness a relatively higher growth as compared to the commercial vertical.

For Sony, smart TVs contributed 65 percent of sales in October, while for LG India it was 70 percent. For brands like Vu, Kodak, and Thomson, smart TVs accounted for upwards of 80 percent with sales even in smaller towns. The impetus was largely provided by the narrowing price gap between smart and conventional TVs from Rs 7000-8000 down to Rs 2000-3000.

Road ahead
Looking ahead at 2019, TV brands will be looking for more growth from advanced TV technologies, including OLED, QLED, 4K, and 8K. On the other hand, Chinese manufacturers, while continuing to explore overseas markets may find the going tough, as sustainability on aggressive pricing is a difficult proposition.

Based on market research conducted by TV Veopar Journal in February 2019.

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