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Why Online-Only Smart TV Brands Need To Move Offline

After Xiaomi tasted success with its smart TVs, other smartphone companies have been eyeing the big screen. Realme is prepping to unveil its smart TV at the Mobile World Congress 2020, while Nokia launched a smart TV in partnership with e-commerce behemoth Flipkart late last year. OnePlus, Micromax and Motorola, too, are dabbling in this bustling category.

According to IDC Research, 40% of the television sets shipped in India in the April-June quarter of 2019 were smart TVs, growing 50% y-o-y. As per its worldwide quarterly smart home device tracker, Xiaomi was the leading player in this market in Q3 2019 with 33% market share, followed by Samsung with 14% market share, LG with 13%, Sony with 10% and TCL with 9% share.

Higher margins rendered by smart TVs, as opposed to the single-digit margins earned from smartphones, is what has piqued the interest of smartphone players in this category. “Considering that the supply chain framework for smartphones and smart TVs are similar, phone brands face very low barriers for entry in the smart TV segment,” says Prabhu Ram, head, industry intelligence group, CyberMedia.

Online push
Most of them have been tapping the e-commerce platform to gain a foothold in the market. Motorola and Nokia, for example, tied up with Flipkart to launch their smart TVs, while OnePlus tied up with Amazon.

“Today, 86% of the TVs sold on our platform are smart TVs. This is driven by factors such as the rise in internet penetration, uptake of video and OTT content and increased disposable income,” says Adarsh Menon, head of private labels, furnishings and electronics, Flipkart.

Motorola’s smart TV range starts at Rs 13,999 (32 inch) and goes up to Rs 1,19,999 (75 inch). Nokia has introduced only one variant in the market — a 55-inch smart TV priced at Rs 41,999, while OnePlus’s smart TVs are in the premium segment.

Xiaomi’s smart TVs come for as low as Rs 12,499, going up to Rs 54,999. The company, which has 10 Mi TV SKUs (stock keeping units), gained initial momentum through the online channel, and is now building its offline capabilities.

“While we started primarily through online, we have significantly expanded into offline. Almost 30-40% of our sales currently comes from the offline channel,” says Eshwar Nilakantan, category lead – Mi TV, Xiaomi India. The brand claims to be present in 3,000 partner stores currently, apart from its own store network.

Offline hurdles
Experts say that moving on to the offline space is a requisite in order to get a larger share in the market. And that is not going to be easy for these online-dependent players.

“Stocking inventory is a challenge because in the space they can stock a single television unit, they can probably stock 150 phones. Also, it is a very involved purchase, so displays are important,” says Navkendar Singh, research director, IDC India.

Having solid after-sales support, too, is crucial. According to Shobhit Shrivastava, research analyst at Counterpoint Research, players such as Samsung and LG are doing well offline. “They have built their retail presence over the years and have after-sales support even in the tier II and III cities. They will give stiff competition to players trying to tap the offline channel now,” he adds.

Experts say that since the towns beyond tier I and II form a major market for this segment, smartphone manufacturers will have to establish a strong presence to induce purchase. Financial Express

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