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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 oforganised retail is shown below.


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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 asBrown 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

y Rising disposable incomes coupled with increasing consumer exposure

y Increase in manufacturing in the local grounds

y Credit/Financing schemes which make purchase easy

y Growing competition , leading to better deals

y Increased reach due to better distribution networks

Key Drivers

y 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


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disc

e

ionary ex enditure is increasing.

y Availabili y of Easy Credi Options

Wit ll t j l i EMI it t i

t ti Credit rds, t e I di consumers now have an easier access to

consumer electronics

y 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.

y Falling Pri es 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 afterintroduction.

Figure 1 Share of Wallet - Indian Consumer Trends


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Figure 2 Retail Prices of Consumer Electronics


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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 alloverthe country . The SAMSUNG manufacturing complex housing manufacturing facilities

for Colour Televisions, ColourMonitors, Refrigerators and Washing Machines is located atNoida, near Delhi. SAMSUNG Made in India products like Colour Televisions, ColourMonitors and Refrigerators are being exported to Middle East, CIS and SAARC countriesfrom its Noida manufacturing complex. In November 2007, SAMSUNG has commenced themanufacture of Colour televisions and LCD televisions at its state-of-the-art manufacturing

facility at Sriperumbudur, Tamil Nadu.

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

From being a virtually unknown entity in the Year 1995, brand SAMSUNGtoday enjoys anawareness 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 Indianmarket coupled with the Companys efforts to customise products for the Indian consumers,have contributed to the success ofthe brand in the Indian market. The Company has carried

out over 170 Dream Home Road Shows a four day exhibition of its new products andtechnologies in the metros and smaller markets to create consumer awareness. To display

SAMSUNG products in a more lifestyle ambience and to communicate the product benefitsin a more interactive manner, SAMSUNG India has set up a widespread network of

SAMSUNG Digital Plazas all over the country. The SAMSUNG Brand shop networkcomplements over 8500 retail points for SAMSUNG products located across the length and

breadth ofthe country.

.

Samsung India Electronics Ltd - Related Companies


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Samsung Electronics Co., Ltd.

SamsungSemiconductor, Inc.

Supreme Electronics Co., Ltd.

R&S Networks Co., Ltd.

BenQ Corporation

STEC, Inc.

SamsungGroup

SiliconStorage Technology, Inc.

Xander International Corp.

Integrated SiliconSolution, Inc.

POS

ON

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

Practices

128.0

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 ProductAwards and recognitions across its Audio Video, Home Appliance, IT and Telecom Productcategories. The Corporate Recognitions received by the Company in the recent pastinclude:

y Electronics Organisation of the Year by EFY Magazine at its Readers Choice

Awards February, 2007y Electronics Company of the Year in 2006 by Consumer Electronics & TV

Manufacturers Associationy No.1 Channel Favourite Company in 2006 by Varindiay Most preferred TV partnerin Hospitality Industry by Hospitality India 2006y BestRetailer forthe Year 2005 by India Retail Forumy Most Trusted Company Award 2005 by VarIndiay ELCI NA (Electronics Industries Association of India) Awards for Excellence in

Electronics instituted by the IT department ofthe Government ofIndia. SAMSUNG


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India received the 1st Prize in the Consumer Electronics category for productivity,exports, R&D and quality assurance in 2002

y Golden Peacock Special commendation Certificate for Corporate SocialResponsibility (Private Sector) forthe year 2004

y Special Award by Electronic Industries Association of India for significantcontribution to the development and growth ofIndias Electronics Hardware and IT

industry. in 2004

LITERATURE REVIEWS

OBJECTIVES-

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