Who said consumer spending has slowed? The LCD/LED TV market is continuing to grow at a strong pace. Raj Kumar Rishi, Vice-President & Head (AV & CE Business) at Samsung Electronics (India) that has around 30 per cent share of the TV market in India is very bullish on growth opportunities for the industry as well as Samsung. With just 5 per cent penetration, flat panel TVs will grow rapidly and Samsung will drive that, Rishi tells BrandLine. Excerpts:

What changes have you observed in consumers' buying behaviour?

India is among the very few markets where consumers are still buying CRT TVs. But at the same time there's demand for panel televisions. From 1.5 millions units in 2009, the industry sold a total of three million units of panel TVs (LCD/LED and plasma televisions) in 2010. This year the figure would be around 4.5 million units. CRT TVs, on the other hand, are selling only in class ‘C' and class ‘D' towns where again consumers are slowly moving towards panel TVs. The tech-savvy crowd in the country is growing and so is the aspiration level. People in tier II/III towns have been increasingly moving towards panel TVs from CRT TVs as they moved from black-and-white TVs to CRT TVs 7-8 years ago.

To cater to this growing segment only we launched the LED TVs in 2009. In 2010 itself LEDs made up almost 10 per cent of our total TV sales in India and this year it would be anywhere around 20 per cent.

Innovation is giving TV viewers a spectacular TV watching experience. But in India 3D and smart TVs are still only for a niche. Do you make efforts to educate people on the technology?

Indian consumers are well informed and Internet penetration has played a big part in this. But from our side we make efforts too. We make sure we give the complete product details on our Web site and our training cell trains dealers so that they in turn can help the customer buy the right product.

Many players in the consumer product space are betting on tier II/III cities now. Where do you think growth will come from – metro cities or the interiors?

Definitely upcountry markets are growing faster than the metros. One reason for this is that the base in metro markets is quite big, so percentage growth looks lower when compared to upcountry markets. Second, there is also a lot of development in these upcountry markets which has resulted in income generation and higher disposable income for people in this region.

At Samsung we have a two-tier strategy. For metros we offer premium top-end products such as LEDs and smart TVs while offering CRT TVs and semi-automatic washing machines to the mass market. We have a portfolio that is relevant to both the markets and stand to benefit either way.

Panel TVs have seen a sharp drop in price since launch. Why? Will prices drop further?

It is a normal phenomenon – we saw it in mobile phones and laptops too. The drop in prices of panel TVs followed technology advancement in the industry as well as sharp increase in sales volumes for panel makers. Both these things together brought down prices. And, if you ask will prices come down further, I would say I don't know. It is not India volumes alone, the volumes sold globally will influence panel TV prices.

Do you have a specific strategy to garner more share in this market? Do you have a different pricing strategy for rural markets?

We will keep our product superior to others through technology development and by strengthening our distribution network.

We have a uniform pricing strategy across markets, be it the metros or the upcountry markets. For the latter, however, we give some customised features. For instance, we have the ‘easy view' feature in flat TVs that go to the non-metro towns where there is no set-top box facility. This feature helps customers sort channels as per their requirements under news, entertainment, and such.

Of other factors financing options have also played a crucial role in buttressing demand in rural market over the last two years. But now with interest having risen quite sharply, do you think demand will be affected?

The finance schemes are definitely a catalyst … but we don't think it influences the ‘buy' or ‘not to buy' decision. When the financing option is there people may upgrade to a better product. For example, someone who wants a 32-inch TV will go for a 40-inch if there is a financing option, that's all. Credit-driven buying is still less than 10 per cent in our industry and we don't think rising interest rates are going to influence us much. Unlike the car industry where almost 75 per cent of business happens in credit, ours is a more cash-and-carry business.

Ok, you appear very optimistic. But tell us, haven't you seen slowdown signals? Inflation has been rising in double digits, so isn't there a slowdown in consumer spending?

We are pretty much on track and we don't see any slowdown in demand. See, in panel TVs as far as I see the number of units sold is only growing. In percentage terms it may be slower as the base is getting bigger every time. Over the next two-three years, panel TVs will outgrow CRT TVs. We expect the coming festival season to be very good and we would be quite aggressive with a lot of promotional offers for Onam and then for Diwali.

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