The Hindu Business Line : The world is flat

Thin seems to be on the fast track to be the new `flat.' In fact, the growth in the LCD (liquid crystal display) and plasma television segments being seen at the moment is reminiscent of that seen in the flat CTVs segment 3-4 years ago.

Sample this: Last year, the market size for flat panel TVs (LCD and plasma) was 30,000 units. This year, it is expected to grow to two lakh units — 1.5 lakh for LCDs and the rest for plasma. Further, the first four months of this year have already seen the sale of about 30,000 LCD TVs and 10,000 PDPs (plasma display panel).

"I can say with a fair degree of confidence that the LCD market will double every year for the next couple of years at least. This growth is driven by consumers who already have a large screen flat or conventional TV in their home. The trend in the market is that high-end or technology-led product categories are doing better in the Indian market and that is the reason we expect better acceptance for the LCD product category in the Indian market," says R. Zutshi, Deputy Managing Director, Samsung India.

It comes as no surprise then that a host of domestic as well as international brands are drawing up aggressive strategies to make a mark in this fast-growing segment. Samsung India, for instance, started manufacturing LCD TVs at its Noida facility from June this year. The company has set up an initial capacity of 5,000 units which will be stepped up soon.

In fact, the company, which claims to be a market leader in both the LCD and Plasma TV segments with a market share of 47 per cent and 36.5 per cent respectively, says that its LCD TV sales have grown by over 1,100 per cent in the first six months of the year. Rival Korean consumer electronics firm LG Electronics India is also planning to commence assembly of LCD televisions in India during the second half of the current year. The company is also evaluating assembly of plasma televisions next year.

Bullish about growth in the Indian market, Kiju Song, Director - Digital Display Overseas Sales & Marketing Division, LG Electronics Ltd, recently said that the growth in both LCD and plasma TVs is being aided by the depreciation in prices of both PDPs and LCDs. "In fact, prices of LCDs may decline by as much as 25 per cent once we commence assembling these in India," he said. Further, there has already been an erosion in prices over the past year. In fact, last year, prices of LCD TVs fell by 35 per cent.

Globally, prices of PDPs came down by about 20 per cent last year and a further depreciation of 15 per cent is expected this year as volumes grow. Japanese consumer electronics major Hitachi, meanwhile, says that it will spend roughly Rs 12 crore to advertise and promote its LCD and plasma TVs in India and plans to capture a 20 per cent market share in the high-end plasma TV market by 2007-08.

"We will invest Rs 12 crore in India to market and promote our plasma and LCD TVs. A majority of the amount would be spent on electronic media apart from print and other media," says Tarun Jain, Country Head, Hitachi Home Electronics Pte Ltd. The company currently claims a market share of 17 per cent in the category. Panasonic India, the fully-owned subsidiary of the $75-billion Matsushita Group of Japan, too expects a quantum jump in domestic sales to between Rs 200 crore and Rs 300 crore for electronic consumer goods in 2006-07, largely driven by sales of its new range of plasma and LCD televisions. "We believe that the future of television lies in plasma and LCD televisions and we are going to concentrate on this segment. We hope to garner about 25 per cent of that market here," says Shrikrishna Kulkarni, Managing Director, Panasonic India.

Sharp India, another Japanese player in India, is also very bullish about the Indian market. Prasun Banerjee, Vice-President (Marketing), says Sharp is very aggressive about the LCD segment. "Increased disposable income, fast-changing lifestyles, rise in credit facilities from banks and other financial institutions and falling prices of high-end TVs augur well for the growth in this segment," says Banerjee. He too sees a 20 to 25 per cent fall in the prices of LCD televisions in another couple of years.

Even home-grown player Salora International is trying to revive its consumer electronics business by extending its presence in the top end of the electronics market. While the mother brand Salora would continue to focus on the mass end of the market, the company would tap middle-rung and high-end products through its recent tie-up with Japanese company TEAC. Apart from flat CTVs, TEAC branded LCD and plasma TVs would also be sold in the market. Meanwhile, the Videocon Group, which recently rolled out its LCD and plasma TVs, is likely to emerge as a key player in this segment should the company's acquisition of Korea's Daewoo Electronics go through.

Haier has also expanded its LCD/PDP range to include more models. It will also spend enough to ensure they are advertised well and make sure they are available at more and more outlets. "Two years ago, stores would not display plasma TVs, but today, they are making special efforts to show them off. Companies are also investing more in ensuring space for them," says R. T. Rajan, Vice-President (Consumer Electronics & Sales and Marketing) Haier Appliances India.

The vital links are retailers, says Prassana Raghavan, Product Group Head, LG. They have to pack in exciting promotions (easy payment plans, exchange offers). Brands also have to tie up with strong retail chains. Mumbai, in fact, is a real example of what a market can deliver, he says, adding that the potential markets are Mumbai, Kolkata, Delhi, Bangalore and Hyderabad.

According to market analysts, a positive trend in the plasma and LCD TVs segment has been that sales are no longer just restricted to just the institutional segment, though this segment still accounts for a chunk of total sales. As a result of the price erosion and increasing awareness, high-end televisions are making rapid inroads into Indian households. As a result, almost all major companies through their dealers are aggressively pushing attractive finance schemes to sell these products.

Some of these companies also launched new ranges of LCD and PDP televisions. For example, Samsung recently launched a range called Bordeaux in 26", 32" and 40" screen sizes. The new range, according to Zutshi, will produce stunning and more vivid images with a dynamic contrast. Sharp India too came out with AF3 Aquos, which the company claims has more features and is technically "brilliant."

Surely, with consumers getting better technology at increasingly affordable prices, the segment's growth curve is only going up.

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