Financial Daily from THE HINDU group of publications
Thursday, May 22, 2003
Onida sees big potential in home theatres, DVDs
MUMBAI, May 21
INDIA is a huge cinema market - and that is clear not only in the increasing Indian presence in Cannes but also in the booming sales of DVDs and home theatres in the last couple of years. And Mirc Electronics, which makes the Onida brand of TVs, is betting big on its KY home theatre and DVD players.
The 29-inch Onida KY, which was launched last April, sold 10,000 units in 2002-03, and the company expects that 22,000 units will be sold this year, said Mr V. Chandramouli, Vice President - Sales, Marketing & Service, Mirc Electronics.
``At a very general level, India is a cinema market, so just the way VCRs boomed some years back, any product that comes in the zone of cinema will boom,'' Mr Chandramouli said. ``Also, we are very strong in sound, which is a big advantage in this segment.''
Erosion in the prices of TVs and DVDs is also driving the market; and, as more Hindi titles are made available on discs, DVD players will soon sell as much as VCRs, Mr Chandramouli said.
In home theatres, the Onida brand has a clear distinction: while the 5.1 amplifier and speaker system are typically outside the TV, research indicated that viewers were watching more movies on HBO and Star Movies, Mr Chandramouli said. So the Onida home theatre has an in-built amplifier besides the 5.1 circle surround sound, so even a movie on HBO has home theatre sound, he added.
Its DVD players, also launched last April, sold 7,000 units last year; this year, Mirc hopes to sell 30,000 units. The ad spend on home theatre and DVDs is about Rs 11 crore.
With TVs, Onida is looking to take advantage of two trends: the growing preference for flat screens, and the tendency to upgrade purchases. The Onida Black flat TV was launched in 2001, and its franchise has been successfully established. The company has invested about Rs 9 crore in flat models this year.
Onida claims to be the market leader in the 21-inch and 29-inch segments; the 29-inch segment is the most lucrative segment, and Onida is keen to tap it, as it helps consolidate the premium and technologically superior image of the brand.
Mirc launched the 29-inch Onida KY Thunder more than two years back, and has built the brand on the franchise of sound.
``There is parity in picture, and hence the next parameter is sound, and in India sound is important, because of movies and songs,'' Mr Chandramouli said.
``Besides, at the higher end, the consumer is looking for more than picture.''
Overall, there is also rapid price erosion in TVs: prices fell by 7-8 per cent last year, enabling the consumer to buy higher than he intended to.
So Onida is working on building a strong range priced just above economy.
The Onida 20-inch TV is priced at Rs 8,000, as compared to Rs 7,300 economy-pricing, and the 21-inch TV is priced at Rs 9,500, compared to Rs 9,000.
With its products and communication strategies in place, Onida will be that much closer to being a ``multi-product entertainment electronics giant'', Mr Chandramouli said.
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