Fighting For Survival!

The television industry is in a state of upheaval. The leading brands are seeing their margins erode; profits and sales decline as an altogether different set of brands gain ground. For instance, Xiaomi, after having tasted blood, with a clean sweep in the mobile phone sector is spreading its wings. The brand, having sold 500,000 TV sets in the last six months online and secured its supplies from Dixon Technologies is encroaching into the offline network, till now the territory of established brands. Against the backdrop of surging oil prices, weakening rupee, an over-aggressive online retailer community (their budget for the month-long festive season is pegged at Rs. 7000 crore in cash), increased acceptance of private labels, and huge inventory build-ups, the leading brands have their hands tied, and in spite of the promising festive season, when consumer sentiments are high, the marketers are not able to take the risk of implementing a price increase. In fact, on the contrary, in retaliation, prices have recently been reduced by some. This is apart from the additional funds spent on marketing and branding, amounting to Rs. 30–45 crore for each brand. There is some respite from the discerning customer, who prefers the larger screen.

The smaller brands have their own set of challenges. There is a flood of spurious sets, where the LED panel, declared as glass has been imported by the unorganized players at a 3 percent customs duty as against 15 percent, thus pricing the small brands out of the market. Additionally, the gutsy entrepreneurs offer a one-year warranty, packaging the set in a branded carton for a 40 percent higher realization.

On another front, Videocon Industries, is fighting for management control. Sitting on a debt pile of Rs. 3900 crore, the bankruptcy court, led by SBI is breathing down its neck with an insolvency petition filed by creditors.

The multi-product makers have had some relief in the home appliances category. Washing machines and refrigerators gained traction in the first eight months of 2018, albeit the air conditioner industry is reeling from the doubling of customs duty from 10 percent to 20 percent, an increase of 2.5 percent for the compressors, and a 28 percent GST slab in a battered currency scenario.

We wish our readers a very Happy Dussehra!

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