DAIKIN

Riding the Wave!

As the North Indian plains, and parts of West and Central India, roast under an unrelenting heat wave, with temperatures skyrocketing to 44 degrees Celsius in many places, the AC market is coming back on track. Momentum had started to build up with scorching summer in Kerala and some parts of South India in March 2019. This was after two years of a relatively weak season hampered by intermittent rains. The seasonal climb is extending into the adjacent refrigerator segment too.

A back-of-the-envelope calculation shows that there has been good demand for television sets too. The IPL having commenced from March 23 set the tone. News channels saw major jump in viewership. The General Elections kept the Indian audiences glued to their TV sets right through the election season. The ICC Cricket World Cup is not disappointing the retailers, and with India as a strong contender for the title, the excitement shall continue till mid-July. Of course the aggressive stance of the e-commerce sector continues to give the dealer fraternity a hard time, and TV is not the only screen the millennials watch. The OTT platform does give some respite!

Globally, amid rising concerns over the intensifying trade war between the US and China, South Korean and Chinese TV makers are cutting panel orders in the second quarter. There is an increasing risk of a demand correction in the light of several negative indicators from TV brands, including rising inventories, order cuts, and increasing tariffs. These signs imply a slowdown in the market and a possible downward trend for panel prices. The fast-changing dynamics of the TV panel supply base will have an impact on TV makers’ buying plans during the next couple of months. These changes include the panel makers’ moves to manage their fab utilization in order to maintain their supply-chain agreements and their financial performance. Another major development is Beijing-based BOE’s plans to push Gen 10.5 capacity to 100 percent, and China Star slated to begin production of the 75-inch TV panels by mid-2019. Furthermore, there is the scheduled restructuring of fabs by Korean panel makers.

While it is heartening to ride the wave and seize the opportunities, there has to be a better way to drive brand growth.

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