COMPARATIVE STUDY IN ELECTRONICS CONSUMER GOODS MARKET OF INDIA

INTRODUCTION-

SECTOR CHOSEN- Consumer Electronics goods

WHY????

According to a McKinsey 2005 report, while Food and Grocery took

the highest share of wallet, and electronics took only a mere 5%, the
proportion of spending on electronics was definite bound to increase
by 2015 and also the growth rate for the share of organised retail in
the electronics segment was set to increase from 15% to a astounding
45% in 2015. A graph representing the share of wallet to the share of
organised retail is shown below.
Segment Definition

In general consumer electronics refers to a variety of electronic equipment used by private

customers. This industry can be divided into many segments:

1. ‘Traditional’ Consumer Electronics: audio and video equipment

2. Computing Devices: Computers, Calculators, Laptops

3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuum
cleaners, grinders, etc

4. Personal Care: Hair Dryers, shavers, electric toothbrushes.

In addition to this, the emergence of telecommunication has lead to the convergence of mobile
technology into the consumer electronics industry and hence this paper will only deal with
traditional consumer electronics, mobile phones and computing devices which can be termed as
Brown Goods as per industry definitions

GROWTH PROSPECTUS -

Consumer electronic Industry is all geared up for fast growth in the coming years. The predicted
figure for the consumer electronic market by 2013 is around $46 billion, growing at a compound
annual growth rate (CAGR) of 16%. This astounding growth is due to many factors, the major ones
including

 Rising disposable incomes coupled with increasing consumer exposure

 Increase in manufacturing in the local grounds
 Credit/Financing schemes which make purchase easy
 Growing competition , leading to better deals
 Increased reach due to better distribution networks

Key Drivers
 Young Population with rising incomes

45% of the Indian population is below 25 years which accounts to close to 500 million consumers
(18+) of which 230 million are in Urban India. With the rising incomes and education levels, the
discretionary expenditure is increasing.

Figure 1 Share of Wallet - Indian Consumer Trends

 Availability of Easy Credit Options
With all the major players offering easy EMI schemes and with the increased
penetration of Credit cards, the Indian consumers now have an easier access to
consumer electronics
 Changing Consumption Patterns
Gone are the times when people bought electronics with the intension of using it for
years together. With increasing speed of innovations and as new technologies come
in, the Indian consumer wants the latest and the best. Now mobile phones are changed
every year, laptops once in 2 years ,etc. People want to be trendy and are becoming
gizmo frenzy.
 Falling Prices of Consumer Electronics
With new models, products and more competition, prices are being driven even
further down. Especially in the mobile phone segment, prices fall as much 20% after 6
months after introduction.

Figure 2 Retail Prices of Consumer Electronics

 Firm chosen –Samsung India electronics ltd.

Samsung India was formed in 1995.

Sales turnover-US $ 1 billion
Employee base-1600
Headquarters-Delhi
Branch offices-19 (located in all over India)

Headquartered in New Delhi, SAMSUNG India has widespread network of sales offices all
over the country . The SAMSUNG manufacturing complex housing manufacturing facilities
for Colour Televisions, Colour Monitors, Refrigerators and Washing Machines is located at
Noida, near Delhi. SAMSUNG ‘Made in India’ products like Colour Televisions, Colour
Monitors and Refrigerators are being exported to Middle East, CIS and SAARC countries
from its Noida manufacturing complex. In November 2007, SAMSUNG has commenced the
manufacture of Colour televisions and LCD televisions at its state-of-the-art manufacturing
facility at Sriperumbudur, Tamil Nadu.

SAMSUNG India is the hub for SAMSUNG’s South West Asia Regional operations. The
South West Asia Headquarters, looks after the SAMSUNG business in Nepal, Sri Lanka,
Bangladesh, Maldives and Bhutan besides India. SAMSUNG India which commenced its
operations in India in December 1995 enjoys a sales turnover of over US$ 1Bn in just a
decade of operations in the country.

From being a virtually unknown entity in the Year 1995, brand SAMSUNG today enjoys an
awareness level of over 65% and a positive opinion of over 80% in the country today (source:
BAS 2007). The introduction of World First, Wow, leading technology products in the Indian
market coupled with the Company’s efforts to customise products for the Indian consumers,
have contributed to the success of the brand in the Indian market. The Company has carried
out over 170 Dream Home Road Shows – a four day exhibition of its new products and
technologies – in the metros and smaller markets to create consumer awareness. To display
SAMSUNG products in a more lifestyle ambience and to communicate the product benefits
in a more interactive manner, SAMSUNG India has set up a widespread network of
SAMSUNG Digital Plazas all over the country. The SAMSUNG Brand shop network
complements over 8500 retail points for SAMSUNG products located across the length and
breadth of the country.

Samsung India Electronics Ltd - Related Companies

Samsung Electronics Co., Ltd.

Samsung Semiconductor, Inc.

Supreme Electronics Co., Ltd.

R&S Networks Co., Ltd.

BenQ Corporation

STEC, Inc.

Samsung Group

Silicon Storage Technology, Inc.

Xander International Corp.

Integrated Silicon Solution, Inc.

POSITION –
In a survey conducted by Business World in 2006, Samsung India Electronics was ranked as No. 5 in the consumer
durable sector and was given the following scores based on the different parameters:

Samsung India Electronics

Innovativeness 144.0
Quality & Depth of Management 128.0
Financial Performance 134.0
Ethics & Transparency 134.0
Quality of Products & Services 136.0
Talent Management/People 128.0
Practices
Global Competitiveness 148.9
Total Score 952.9

AWARDS AND RECOGNITION

During its tenure of 12 years in the country, SAMSUNG India has won several Product
Awards and recognitions across its Audio Video, Home Appliance, IT and Telecom Product
categories. The Corporate Recognitions received by the Company in the recent past include:

 ‘Electronics Organisation of the Year’ by EFY Magazine at its ‘Readers’ Choice

Awards’ February, 2007
 Electronics Company of the Year – in 2006 by Consumer Electronics & TV
Manufacturers Association
 No.1 Channel Favourite Company – in 2006 by Varindia
 Most preferred TV partner in Hospitality Industry by Hospitality India 2006
 Best Retailer for the Year 2005 by India Retail Forum
 Most Trusted Company Award 2005 by Var India
 ELCINA (Electronics Industries Association of India) Awards for ‘Excellence in
Electronics’ instituted by the IT department of the Government of India. SAMSUNG
 India received the 1st Prize in the Consumer Electronics category for productivity,
exports, R&D and quality assurance in 2002
 Golden Peacock Special commendation Certificate for Corporate Social
Responsibility (Private Sector) for the year 2004
 ‘Special Award’ by Electronic Industries Association of India for ’significant
contribution to the development and growth of India’s Electronics Hardware and IT
industry.’ in 2004

LITERATURE REVIEWS

OBJECTIVES-