While smartphone players have entered the TV space, it is not going to be an easy segment to compete in
Avneet Singh Marwah
Evolution of technology is not only brewed by talent, but also by what the customer is seeking today. Consumers are aware, tech-savvy and this has made it important for brands across sectors to shed deeper light into research and development with regard to their current and future product portfolio. Most evident being the recent surge in the need to have smart and connected homes.
The overall growth of the electronics industry has been awfully low. While the white goods market (refrigeration and air conditioners) took a front seat in sales this summer, brown goods sector, such as the television industry has been facing a slew of challenges. There has been 15-20 percent de-growth, an overall market slump due to low employment rates and resultantly, decrease in discretionary spending power and below-par market sentiments.
For the past year, or more, the segment has not been able to enjoy even its cyclical highs such as e-commerce sale days, major cricketing events, festive seasons, new launches, despite increase in marketing spends for awareness and customer engagement.
Smartphones and televisions (TVs) compete head-on. A phone has become synonymous with a television, for many, and is evidently eating into the latter's market share. The former is easy to use, handy to carry and content is readily available via applications. Cheaply available data has reinforced internet penetration in India.
Data has also enabled evolution of the television segment, with most players launching a series of smart and Android-enabled TVs. Consumers have been responsive to the new technologies. But, over the past year the television segment has achieved less than expected growth in volumes (3 percent) and next to no growth in terms of value, this year.
Still, the Indian market remains a favourite; consumers are many and a growing population promises a bigger pie. The opportunity that lies in India’s smart-phones category has attracted a plethora of foreign brands to the country, who are realising the potential that our market harbors and thus have become aggressive about expansion and investments. Some of these have entered India’s TV segment while expecting similar sales numbers.
The Indian market is huge and has also turned out to be very promising. This has allowed smartphone companies to experiment immensely with its design. The feasibility of size also makes the smartphone an easier medium to view content on, especially when on-the-go. While the entry of new companies in the TV sector is great news, we must consider the major pain points that the sector is facing, except for the while entering the segment.
The available market for the TV is much smaller than that for a smartphone company. Additionally, there are more TV companies, in India, than those in the mobile phone sector. A small market coupled with numerous competitors calls for extreme marketing spends in order to rise above the competition. Not only that, but apart from equipping a gadget with the latest technologies, companies have to bundle it all up at an affordable price point too.
India’s TV sector has been shaped by the top three to four players dominating the market today. These brands enjoy a large market share for they have shaped sector into what it is today- while leading the way for a tech-evolution and providing India with infrastructural abilities. These companies also offer an entire range of home-appliances and other products, that are tech-enabled to convert a home into a smart and connected home.
Another challenge that cellular turned TV companies will face would be the aspect of low brand loyalty that affordable brands face. A new entrant looking to capture a large chunk of the market, will price its product competitively. The Indian customer, one who is price and value conscious, is constantly on the lookout for newer technologies being offered within her or his budget. They do not hesitate to switch from one brand to the other.
A television company’s after-sales service is more complex from that of a mobile phone company’s service. It is relatively easy for the consumer to visit a service/repair centre and get her/his phone’s woes addressed. Whereas in case of the TV, the after-sales service is door to door. Given India’s diversity and size, it is challenging to set-up an efficient team across locations, one maybe selling at, in one go.
A local service centre has to be tactfully setup in order to manage factors such as- language, location and see to that all service repair centres are equipped to handle the problem at hand (if not, devices are mostly sent to a central location- which ends up increasing the gestation period for grievance redressal).
After-sales service makes or breaks a brand and is the best way to retain/sustain customers (at variably low costs) and even gain, especially by referrals/& word of mouth marketing. This makes the exercise even more important and challenging, no matter how standardised one’s outsourcing organisation may be.
We have already established the vastness of the Indian market. Without any experience in their home country, exploring a new product category in a new market becomes a daunting task. Success and sustainability for a brand only comes when one has understood the peculiarity of India’s TV market.
Yes, India has become a favorite for consumer electronics players across the globe, as it allows them immense scope to experiment in marketing and execution strategies. In addition to that, the government has recently also relaxed foreign direct investment norms for single brand retailers thus increasing the attractiveness of the market.
A new entrant will not only have to face the current sectoral issues but will also have to justify as to how and what is different about it. Most of the latest technologies are available in India and at feasible price points which is making it possible for households to own a TV, and truly enjoy content the way it is supposed to.
There are lesser explorative avenues while designing a television. Brands have gone over and beyond with the cellular phone, from flip to slide to sleek and so on; a lot of experiments have been carried out in a phone’s design--while some trended, most failed. There is not much to experiment in a TV’s design and user-interface and experience.
Brands have managed to cemented their positions across categories, in the TV sector, which would be hard to compete. Newbies will splurge across marketing avenues. But that will not sustain them in the long-term, thus making it even more important for them to figure out a viable strategy to remain in the market.The author is CEO, Super Plastronics (exclusive brand licensee of Thomson TV in India).Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.