DAIKIN

Redefining Pricing Strategy!

Is the TV industry heading for another disruption? It is very early days but the clouds have started rumbling. Will the Korean and Japanese brands have to make way for their Chinese counterparts? No doubt, this seems far-fetched, but a serious dent is certainly being made.

It is perhaps the first year when all five leading brands showed slower growth. While LG, Samsung, Sony, and Panasonic have decided to focus on a premium line-up, Videocon is missing from the scene altogether.

However, Xiaomi seems intent on doing its cellphone act in the televisions segment. The company clocked sales of 500,000 sets in 6 months of its launch, and then totaled to 1 million sets in another 6 months. With an aggressive pricing strategy of keeping just a 5 percent margin, it has tied up with Dixon Technologies, the largest OEM manufacturer for its supplies. And TCL is not far behind.

Brands, which made an entry or cemented their position in 2018 are many. They include Akai, Vu, Abaj, Intex, Lloyd, Kodak, Thomson, Sharp, Skyworth, JVC, Blaupunkt, Philips, BPL, and many others. The private labels at modern retail counters continued to be on a growth trajectory.

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 culprit. 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 of 32-inch screen size, as the larger sets remain the domain of MNC brands.

While the e-commerce sector continues its roller-coaster ride, Budget 2019 did not offer anything specific for the TV, HA, and AC industry. Having said that, enhanced disposable income, digitizing 100,000 villages, and moving toward a USD 5 trillion economy should propel demand. However, anomalies as imposition of 5 percent duty on open cell panels, high GST slab for TV sets above 26-inch, and customs duty reduction on goods imported from Korea from 6.9 percent to 6.3 percent remain.

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