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i the the the n in a l n d air e t to of to in in a ’ is o d e s s l PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-7 | Issue-8 | August-2018 | PRINT ISSN No 2250-1991 Some top domestic companies in India and their products include: 1.6 Shares in Total production of Electronic Goods According to government estimates, communication and Ÿ – central air conditioners, room air conditioners, broadcasting equipment constituted 31 per cent (the highest commercial refrigerators, cold storages, and specialty cooling share) of total production of electronic goods in India in 2013; products such as process chillers and mortuary chambers had the next highest share of 23 per cent. Ÿ Godrej Group – refrigerators, air conditioners, washing Not surprisingly, computers are a key component of total machines, DVD players, microwave ovens, audio-visual electronics output in India (14 per cent in 2013); the segment’s products, and digital-imaging products share is likely to go up over this decade, given greater policy focus Ÿ Onida Electronics – televisions, washing machines, air on encouraging computer hardware manufacturing Industrial conditioners, microwave ovens, and mobile phones electronics contributed 12 per cent of the total output of Ÿ Videocon Industries Limited – televisions, DVD players, electronics goods industry in 2013. microwave ovens, refrigerators, washing machines, air conditioners, and power backup Industrial electronics: Industrial electronics is expected to Ÿ Top foreign companies active in India’s consumer durables growth at a considerable pace with the new plans and schemes by sector include: government Production (by value) of C&B equipment in India is Ÿ Whirlpool Corporation (U.S.) – home appliances such as expected to expand at a CAGR of 17.5 per cent over 2008-2013 refrigerators, washing machines, microwave ovens, water (production in the segment is likely to reach USD10.1 billion in purifiers, and power backup FY13 from USD 8.5 billion in 2012). Growth in the segment is Ÿ LG Electronics (South Korea) – televisions, audio-visual expected to far outpace the overall growth of electronics goods solutions, computers, mobile phones, refrigerators, washing production in the country (CAGR of 9.2 per cent over the same machines, microwave ovens, air conditioners, and vacuum period); given C&B equipment’s large share in the electronics cleaners sector, it emerged as the key growth driver for the overall sector Ÿ Group (South Korea) – mobile phones, digital Production value of all other segments in the electronics sector cameras, camcorders, refrigerators, air conditioners, washing (other than C&B equipment) grew at a rate of 12.7 per cent over machines, and computers 2007-2012. With growth in C&B equipment far outpacing those Ÿ Daikin Industries, Ltd. (Japan) – air conditioners and cooling in other segments, the former’s share in total electronics equipment production has doubled over 2007–2012 to 28.3 per cent and is Ÿ Sony Corporation (Japan) – televisions, projectors, DVD estimated to reach 31 per cent in 2013. players, audio systems, digital cameras, camcorders, and videogame products Table 1.1 shares in Total production of Electronic Goods Ÿ Philips N.V. (Netherlands) – televisions, home theater Name of the electronic segment Share in the total systems, DVD players, audio products, computers, and phones production (%) Consumer Electronics 23 1.5 Consumer electronics market Industrial Electronics 12 Consumer durable makers expect to clock up to 40 percent sales Computers 14 growth this festive season by offering freebies and discounts to C& B equipment 31 woo consumers, hoping to put behind the woes they faced in the run-up to GST rollout. Manufacturers, including Sony, LG, Strategic Electronics 5 Panasonic, and Haier, are pinning hopes on pent-up demand post- Components 15 GST after destocking by trade partners in June, to keep their sales Source: Department of Information Technology (2012-13 Annual counter ticking. Report)

The companies are also loosening their purse strings for marketing Fig 1.1 shares in Total production of Electronic Goods campaigns, with Sony alone earmarking Rs 250 crore and Panasonic looking to spend 1.4 times more this season on branding and marketing exercise. Haier is spending 70 percent more this year compared to last year."In the festive season this year, we plan 25 percent sales growth from August to November, 2017, over the corresponding period last year. There is a huge demand in the market and the same is expected to rise ahead of the festive season, he said, adding "we plan to invest Rs 250 crore towards our marketing activities". Industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) said most of the factors point to favourable sales in the festive season. 1.7 Stagnant performance of consumer electronics The consumer electronics industry in India recorded yet another "Pent-up demand due to GST and favourable monsoons leading stagnant performance in 2017, and this was mainly due to a to good harvest shall boost the rural demand for consumer slowdown in demand from institutions for products such as durables," CEAMA President Manish Sharma said. Moreover, an increase in central employees allowance and the rate cut by RBI in laptops and computers. According to Euro monitor International's August will further build consumer confidence to drive the sales of Economies and Consumers data, real GDP growth of the country consumer durables, he added. In June, the industry saw pre-GST slowed down to 7.1 per cent in 2017, compared to 8.0 per cent in clearance sale as stockiest and trade partners sought to liquidate the previous year. This slowdown forced many businesses in India inventories to avoid losses during transition to the new tax regime. to increase the lifecycles of computers and peripherals, thus Haier, which is expecting up to 50 percent rise in sales this year, slowing down replacement demand. sees online retail channels contributing to growth, besides the traditional retail format. "Overall, e-commerce contributes to 10 GST (goods and central tax), which was much anticipated by the percent of our sales and was expecting the festive season to make country, came into effect from 1 July 2017. Manufacturers and this contribution more robust. Panasonic, which is looking at 30- purchasers of consumer electronics in the country were expecting 40 percent growth, plans to invest 1.4 times more this season on a positive impact, with tax rate cuts on many products, which was branding and marketing to draw buyers. This will be in the form of not the case. Products such as mobile phones and analogue/digital TVC commercials, print ad, in-shop brandings, digital marketing cameras are set to record price cuts, thus having a positive impact efforts and hoardings, besides other local level below-the-line on category sales; however, products such as televisions, laptops, activities. The festive season in India has already started in south desktops, monitors and printers are expected to become more with Onam and will go up to Christmas in December. expensive, thus slowing down demand in the short term. www.worldwidejournals.com 43 PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-7 | Issue-8 | August-2018 | PRINT ISSN No 2250-1991 Traditionally, the consumer electronics industry in India has been of the Indian consumers, their price sensitivity, distribution channel dominated by international players. The last couple of years of the analysis, and future prospects of the consumer electronics market review period were particularly tough for domestic manufacturers, in rural India. particularly manufacturers, and this was due to the entry of Chinese mobile phone manufacturers. Leading domestic 1.10 Future trend in Consumer electronics industry companies within mobile phones, such as , If India grow in future at current levels, average household and Karbonn Mobile India Pvt, posted incomes will double over the next few years, making India the significant drops in their volume shares of mobile phones in 2017. world's 7th largest consumer economy by 2020, up from the Chinese mobile phone manufacturers that entered India in the last current 9th position. Global organizations view India as one of the couple of years of the review period managed to offer high- prime market, where future growth is likely to appear. Growth in specification products and at lower prices. Companies such as Indian consumer market would be largely driven by a favorable Technology India Pvt, Mobile India Pvt and Vivo population composition and increasing disposable income. Indian Mobile India Pvt managed to outperform the rest of the industry. consumer electronics market is expected to become US$ 1.15 trillion by 2020. India has become 2nd largest Smartphone market Electronics and appliance specialist retailers continued to account in the world in 2014 and may become market leader by 2021. India for the majority of sales of consumer electronics in India in 2017; is also world's fastest growing tablet market. however, the channel's share fell over the review period and was further impacted in 2017 by demonetisation, which was Major International players like Samsung, LG, Videocon, Sony, announced in the final quarter of 2016. Due to demonetisation, Philips, , Acer, , Microsoft (including ) and others consumers in India did not have the cash in hand, which forced have tapped electronics market and gained a significant market them to postpone their purchases or to turn to online retailers. In share. All these companies are now leading players in one or other addition, due to heavy discounts offered by online retailers, category. consumers shifted even more towards online purchases, resulting in internet retailing being the fastest growing channel in 2017. The India is well recognized Consumer Electronics manufacturing hub shift towards online purchases is expected to continue during the in the world because of its low cost production. Cheap labor, easy forecast period. availability and low cost of raw materials and weak currency are the factors that are driving manufacturing Industry. Growing 1.8 Booming Consumer Electronics Market in India working population and expanding middle class are the main The consumer electronics industry in India is expected to recover drivers for the growth of Consumer Electronics and Consumer during the forecast period, with the recovery driven by increasing Electronics components industry in India. rural demand and the introduction of new products. The majority of rural consumers in India still used feature phones as of 2017, Make in India initiative have boosted the Consumer Electronics and with increasing technological awareness and the declining manufacturing industry in India and as a result we will witness a prices of smart phones, demand from rural consumers is expected marvelous growth in the industry over a period of time. Local to increase, thus boosting industry growth. In addition, the companies are the biggest threat to international players, which introduction of more products under new categories such as are coming up with cheap and non-durable products. In last few convertible tablets, portable speakers and wearable electronics years, many local mobile manufacturers have established in India, will further support growth. who are giving tough competition to international brands. Indian Consumer Electronics Industry is expected to grow with a CAGR of 1.9 Indian consumer electronics industry 27 per cent till 2020. The Indian consumer electronics industry has been growing at a double-digit growth rate since past few years. Higher disposable Demand of electronic products in India is expected to grow at a income, increased product awareness, affordable pricing, and CAGR (compound annual growth rate) of 41per cent during 2017- shift in lifestyles have together been instrumental in changing the 2020 to reach $400 billion by 2020, the domestic production amount and pattern of consumer spending; thereby, resulting in which is currently growing at a CAGR of 27 per cent may touch strong growth in the consumer electronics industry. But still, the $104 billion leaving a huge gap for import to the extent of $300 consumer electronics goods, like refrigerators, televisions and air billion. conditioners, have low penetration in the country, leaving vast room for future growth. India predicts the growth of its Consumer Electronics industry growth, market trends, progress, challenges, opportunities, The Indian consumer electronics industry will grow at a CAGR of government regulations, technologies in use, growth forecast, around 18 per cent during 2011-2014. During this time period, we major companies, upcoming companies and projects etc. in the expect that LCD TV will capture majority of the television market Consumer Electronics Sector of India. In addition to it, the share as it will replace Color televisions market to a large extent. economic conditions of and future forecast of its current economic scenario and effect of its current policy changes in to its economy, Moreover, observed that the air-conditioner (AC) segment is one reasons and implications on the growth of this sector. of the most important product segments driving the overall growth of the Indian home appliances market. Introduction of 1.11 Conclusion innovative features and technology coupled with the expansion of It could be concluded that the consumer electronics industry in distribution network is helping the market to grow at a faster rate. India recorded yet another stagnant performance in 2017, and this Besides this, is becoming a high growth segment was mainly due to a slowdown in demand from institutions for in the consumer electronics market in India. The market will products such as laptops and computers. According to Euro witness a dramatic change in the competitive landscape over the monitor International’s Economies and Consumers data, real GDP next few years. A large number of companies will foray into the growth of the country slowed down to 7.1 per cent in 2017, lucrative Indian consumer electronics market with their diversified compared to 8.0 per cent in the previous year. This slowdown product portfolio. This will lead the incumbent players to invest forced many businesses in India to increase the lifecycles of heavily in establishing their stores across different states of the computers and peripherals, thus slowing down replacement country. The key consumer electronics companies operating in the demand. country including their business overview, after sales service & support system, distribution channel and their promotional & The biggest attraction for MNCs is the growing Indian middle class. corporate strategies. This market is characterized with low penetration levels. MNCs hold an edge over their Indian counterparts in terms of superior The current and emerging trends in the consumer electronics technology combined with a steady flow of capital, while domestic industry, underlining the future potential areas and key issues companies compete on the basis of their well acknowledged crucial for the development of the industry, the behavioral aspect brands, an extensive distribution network and an insight in local

44 www.worldwidejournals.com PARIPEX - INDIAN JOURNAL OF RESEARCH Volume-7 | Issue-8 | August-2018 | PRINT ISSN No 2250-1991 market conditions. One of the critical factors those influences durable demand is the government spending on infrastructure, especially the rural electrification programme. Given the government's inclination to cut back spending, rural electrification programmes have always lagged behind schedule. This has not favoured durable companies till now. Any incremental spending in infrastructure and electrification programmes could spur growth of the industry.

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