Financial Daily from THE HINDU group of publications
Saturday, Jul 24, 2004
Industry & Economy
Marketing - Promotions & Offers
CETMA hopeful of selling 90 lakh CTVs
New Delhi , July 23
A BUOYANT market has kept colour televisions (CTV) sales ticking in 2004-05 so far.
While sales in June touched 6 lakh units, which was a reasonable consumer response, July sales reportedly have been lacklustre.
According to industry sources, "Sentiments were low in July mainly due to poor monsoon and the prevailing drought like situation in many parts of the country."
However, according to Consumer Electronics & TV Manufacturers Association (CETMA), the industry is hopeful of closing the full year with a sale of 90 lakh units.
In fact, the entry of Chinese players such as Haier and the re-entry of TCL in a joint venture with Thomson, are not likely to have any significant impact on the industry, the research organisation CRIS INFAC report on the CTV segment pointed out.
"Favourable buying sentiments, coupled with the intense marketing efforts of key CTV players, led to the sales moving up by 12.4 per cent to 1.14 million units in April-May 2004," it said. During the period, the flat CTV market stood at 2,38,450 units (88,870 units)."Rapid growth in this market has been possible due to substantial price cuts, almost 30 per cent lower than 2002-03, and the strong focus of leading brands on this segment," the report said.
There exists a wide gap between the market leader, LG and the second largest player, Samsung, the report stated. While the shares of these two Korean players marched upwards, Onida and Sansui saw their market shares drop in May over the April level.
A look at the brands' performance reveals that over the last few months, LG has been increasing its dominance in the market, thereby moving much ahead of its competitors. While the industry grew at 12-13 per cent during April-May, LG's sales escalated by 40-45 per cent, the report states. "Apart from effectively using its marketing and distribution strength, the company has implemented a competitive pricing strategy to induce demand," it said.
On the other hand, the marketing initiatives of its nearest rival, Samsung, have been less aggressive. "Samsung is gradually moving out of the volume game and is increasing its focus on the flat CTV market. To start with, the company has moved out of the mass volume 14-inch CTV segment, except for 15-inch flat CTVs," CRIS INFAC said.
Further, most of the CTV players saw their market shares improve in May year-on-year. While Mirc Electronics maintained its market share vis-à-vis May 2003, LG's market share jumped to 24 per cent from 18 per cent last year.
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