In Times Of Disruption

The tussle for supremacy for the Top 3 positions is on again. The Indian consumer electronics industry has been dominated by three brands ever since 1982, when color television made its debut in India, and the TV set became an important member of the household.

In the 80’s and 90’s, Weston, Crown, and Dyanora-Salora jostled for the numero uno position, while they together dominated the industry. Gradually they were ousted by three brands, Videocon, BPL, and Onida. With the economy opening up, the seat of power gradually shifted to the trio, Videocon, LG, and Samsung.

And now it seems that there is again some disruption. Having exposed itself to major investments in oil and gas, there is an obvious stress on Videocon Industries’ balance sheet. The CE giant is struggling with its working capital requirement and supply chain. Its debt burden is pegged at over Rs. 43,000 crore, which it is finding difficult to repay. The company continues to remain exposed to high project execution risk and large investments necessary for commercializing oil and gas discoveries, translating into a leveraged capital structure.

And there is mayhem in the market space. Competitive intensity has increased among brands, while they jostle to fill in the vacuum created by Videocon.

No doubt the tide will turn again. While oil prices have fallen, the cost of exploration and production too has come down. Oil assets in Brazil will start pumping crude shortly. The brand has the requisite resilience and the promoters, dynamism and commitment. The fact that the Rs. 600-crore public issue of Dixon Technologies has been oversubscribed 117.83 times, indicates that the market favors Indian brands. However, the criticality of timing cannot be undermined.

In the meantime, the market is gearing up for the festive season. Disruptive pricing strategies, inventory build-up, aggressive advertising, marketing, and promotion offers are being finalized and targets set for a 25–30 percent increase in sales. There is an underlying anxiety, with sales having been dull during Onam and Ganesh Chaturthi compared to last year, the consumer having advanced his purchases in June during the pre-GST discounting.

We wish our readers a Happy Dussehra!

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