Anurag Sharma , Director , AKAI India
“The televisions industry in India will be going the smartphone way and a price war is expected to break out.”
Sales in 2017 are more skewed toward the bigger screen size TV despite effects of demonetization and GST; there is a growth in LED TVs sale from last year. Also, smart TVs are becoming more affordable leading to increase in sale of this particular category.
With affordability becoming the base, volume of this category is bound to witness a huge growth. Now consumers are moving toward the larger screen along with smart TV feature but above all of these things quality of the products is still the main concern whenever a consumer goes to buy a product. So, in a nutshell you can say that affordability, size, feature, and quality are the main parameters for any LED TV.
India has the world’s third-largest television industry. Consumers are increasingly changing their TV sets every four–five years, as prices of large screen models are becoming more affordable and with the state-of-art technology coming into picture, leading to growth in the segment. Consumers, these days, are showing inclination to buy the brands that are online-exclusive or are available both online and offline, much like in the smartphones market. So, the top players are coming up with more feature rich and innovative products.
By 2018, the television industry in India is expected to grow to USD 14.7 billion from USD 8.9 billion in 2015. Also, the introduction of HDTVs is set to drive demand growth from affluent consumers.
Challenges and Opportunities
Globally, there has been no decrease in prices of LED televisions, but the big brands are under pressure to reduce prices in India due to sales taking a hit with several brands entering the market and playing on price. This is across television sizes, but the maximum focus is on the 32–42-inch segment, which alone accounts for over 55 percent of the market.
Demand growth is likely to accelerate with rising disposable incomes and easy access to credit along with the rise in working age population. Also, increasing electrification of rural areas and wide usability of online sales would also aid growth in demand.
Impact of GST on TV Sales
The GST attracts additional tax rate over the electronic items of about 4–5 percent. Earlier it was 23–28 percent with cumulative tax (excise and value added tax) and this time as the tax rates are set for 28 percent on the electronic goods; this will severely impact the rising electronic consumerism in the nation.
But still, domestic electronics manufacturers are under the budget in front of their
MNC counterparts and have kept prices
low despite higher GST rate of 28 percent. They have lowered the discounts and margins in order to keep the prices in check and have maintained the decency in the market.
Goods and service tax is proving to be beneficial in a way for electronics manufacturers as due to the introduction of GST as the cost of warehouses and logistics are now reduced and the manufacturers are now passing on this cost reduction benefit to the consumers by which ultimate consumers of electronic products will be benefited.
Outlook for H2 2017
The televisions industry in India will be going the smartphone way and a price war is expected to break out. In the past one year, there have been new entries in the Indian market, while many have become price warriors. Also, there are local companies too who have decided to focus more on the television and appliances market.