Financial Daily from THE HINDU group of publications
Friday, Aug 09, 2002
Industry & Economy - Television Sets
Industry optimistic about sales No drought of cricket for colour TV manufacturers
BANGALORE, Aug. 8
THE Indian television industry is not losing sleep over the D-Word. Despite the worst drought in 12 years, the colour television (CTV) market is expected to show robust growth and sell over six million sets in the ongoing financial year.
Emerging from a good first quarter, which saw sales rocket in certain markets on account of soccer World Cup, the CTV majors are assessing the damage caused by truant monsoon. But the sales projections made earlier this year may remain more or less intact. The optimistic figures suggest sale of at least 6.2 million sets this year, while even the conservative estimates indicate market potential for six million units.
The industry sold between 5.4 and 5.5 million sets in 2001-02. The broad consensus this year point towards 15 per cent volume growth - there are companies betting on 20 per cent plus growth - at a time when failure of monsoon is expected to dent sales across consumer durables and FMCG categories.
With showers disappointing in the first six weeks of the monsoon season, much of the CTV industry's quiet optimism hinges on the cricket World Cup, arguably the biggest sporting event for most Indians, scheduled in February 2003.
Mr Rajiv Karwal, Senior Vice-President (Consumer Electronics), Philips India Ltd, said drought would not drag down CTV sales. "The crop in Punjab and Haryana are safe as they have good irrigation systems in place. There may be problems in Rajasthan, Uttar Pradesh and Madhya Pradesh. But there were difficulties in these markets in the previous years," he said. Mr Karwal added that cricket World Cup, which falls in the last quarter of the ongoing financial year, would give further impetus to sales. "The industry will sell at least 6.2 million sets this year," he said.
However, Mr Anand Narasimha, Head of Corporate Brand Management, BPL Ltd, is among those who prefer caution. "The impact of drought on consumer durables is not felt overnight. There is a certain lag effect. Much depends on the rabi crop - how much of that is affected," he said. With World Cup cricket around the corner, Mr Narasimha has little doubt that the industry will emerge from the drought-affected year with a double-digit growth. Still, it is a far cry from the 90s when CTV business witnessed compounded annual growth rate (CAGR) of 28 per cent.
Mr R. Zutshi, Vice-President (Sales), Samsung India Electronics Ltd, said the drought situation would have an adverse impact on festival sales, especially in the North. "The feel-good factor that one was experiencing is no longer there. Moreover, the semi-urban markets largely drove the growth seen by the CTV industry last year. So, to that extent, the drought situation in Uttar Pradesh, Rajasthan and Haryana will affect the market growth," Mr Zutshi added.
Interestingly, even Samsung estimates that the CTV market will touch six million sets in the current year. "The question is whether it is going to be 6.2 or 6.5 million units," Mr Narasimha of BPL said. The CTV majors hope that the two sporting spectacles will insulate it from the drought panic gripping the Indian plains.
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