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GDP $3900
GSDP
$97.1
2.83%
Sources : IBEF, GEPL Capital Research
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
37
44.2
50.1
67.2
67.5
72.8
88.9
97.1
Karnataka's GSDP
CAGR 14.7%
Figures in US$ Billion
ECONOMIC SNAP SHORT
Per Capita Income Average Expenditure Average Savings
$1,624.4(Rs. 81,220)
$1124.83(Rs. 56,241.5)
$499.56(Rs. 24,978)
Range No. Of People
Avg Expenditure
Total Expenditure
0-20 47 10,000 4,70,000
21-40 43 30,000 12,90,000
41-60 9 50,000 4,50,000
61-80 10 70,000 7,00,000
81-Above 41 90,000 36,90,000
TOTAL 66,00,000
31%
29%6%
7%
27%
Exp. on consumer Durables
0-2021-4041-6061-8081-above
Sources : Marketing White Book 202-13 | Expenditure analysis – Questionnaire : Sample size 150 consumers
INCOME, INVESTMENT & SAVING PATTERN
AVERGAGE EXPENDITURE ON CONSUMER DURABLES
66,00,000/ 150 = 44,000 P.A
*Figures Per Annum
Why Do They Buy?
Increasing literacy rate
Chief earner contributing to
income
Rise in disposable income
Ease access to credit
Increase electrification of
rural areas
Change in life style
Change in education pattern
Web connectivity
When they buy, What all influence them & how much effort they make
Media Reach
Sources : Marketing White Book 2012-13 | IRS 2010, 2011, 2012 Data.
When they buy, What influence them & How much effort they put in
Kitchen Appliance Kitchen Utensils Home Electronics
66
49
62
2123
28
13
31
10
BRAND LOYAL BRAND NEUTRAL BRAND INDIFFERENT
PRESS TV SATELLITE RADIO CINEMAS0
10000
20000
30000
40000
50000
60000
201020112012
Brand Loyalty*Population in ‘000 *Figures in percentage
Decision Making
Sources The Knowledge Company, Technopak 2011
SELF HUSBAND OTHER FAMILY MEMBER FATHER/MOTHER CHILDREN
78
17
2 2 1
58
34
3 1 4
KITCHEN APPLIANCE HOME ELECTRONICS*Figures in percentage
When they buy, What influence them & How much effort they put in
Preferred Format
*Figures in percentage
KITCHEN APPLIANCE HOME ELECTRONICS 0
10
20
30
40
50
60
70
80
67
59
23 22
7
15
2 31 1
EXCLUSIVE OUTLETS OF THE PRODUCT EXCLUSIVE OUTLET OF THE BRAND MULTI BRAND OUTLETS EXIBITIONS & FAIRSOTHER FORMATS
When they buy, What influence them & how much effort they put in
Preferred Location
Sources The Knowledge Company, Technopak 2011
KITCHEN APPLIANCE HOME ELECTRONICS 0
10
20
30
40
50
60 5652
2927
1115
3 42 2
UPTO 1 KM 1KM - 2KM 2.1 KM - 5KM 5.1 KM - 10 KM More than 10 KM
*Figures in percentage
INDUSTRY ANALYSIS
30%
18%
13%5%
34%
MARKET CONSTITUENCY
Colour TV
Refrigerator
Air Conditioner
Washing Machine
Others
WHITE GOODS BROWN GOODS CONSUMER ELECTRONICS
Refrigerator Oven Television
Washing Machine Chimney DVD Player
Air Conditioner Cooking Range VCD Player
Audio System Mixer Mobile Phone
Cleaning Equipment Grinder MP3/4 Player
Electric Fan Computer
Iron Camera
Sources : IBEF, GEPL Capital Research
TV
Flat P
anel
TV
DVD Player
Refrige
rator
Wash
ing Mach
ine
Air Conditioner
Microwav
e Ove
n
85%
24% 24%18% 15%
3% 1%
PRODUCT PENETRATION
PRODUCT PENETRATION
INDUSTRY SIZE Rs. 350bn (as on March 2012)
KEY CATEGORIES White goods, Brown Goods & Consumer Electronics
COMPETITIVE LANDSCAPE Korean Players – LG & Samsung
GROWTH OPPERTUNITIES
Lower penetration coupled with increasing disposable income
Sources : CEAMA, MOSPI, GEPL Capital Research
Sources : IBEF, GEPL Capital Research Sources : IBEF, GEPL Capital Research
INDUSTRY ALL ABOUT
Carrier
Whirlpool
Bluestar
Haier
Videocon
Panasonic
LG
104.2
375
208.3
12.5
187.5
300
312.5
UPCOMING INVESTMENT BY MAJOR PLAYERS
USD millionSource: Business Standard, company websites, Aranca Research
YEAR COMPANY INVESTMENT(in USD million)
2012 LG 375
2014 Panasonic 208
2012 Videocon 12.5
2015 Samsung 94
Consumer Durables Firms to Augment Investments in Coming Years
FDI in Retailing encourages more
foreign (Single [100%] & Multi Brand
[51%]) Retailing
65%
35%
URBAN - RURAL PENETRATION FY11
UrbanRural
49%51%
URBAN - RURAL PENETRATION FY15
Urban
Rural
Source: Corporate Catalyst India, Aranca Research
INDUSTRY ATTRACTIVENESS
* Estimated figures for FY2020
Growing Demand
Higher real disposable income
Easy consumer credit
Growing consumer base
GROWTH DRIVERS
INVITING RESULTING
Notes: EHTP - Electronic Hardware Technology Park, FDI - Foreign Direct Investment, R&D - Research and Development
WHO ALL ARE THERE & WHERE ARE THEY PRESENT
CROMA RELIANCE DIGITAL
NEXT VIEVEKS E ZONE GIRIAS PAI
12
78
9
12
9
3
NUMBER OF STORES IN BANGALORE
STORES & BRANDS SERVED IN BANGALORE
1 2
STOCK LEVELS
Most of the national level stores have there own brands as well!
THE CONSUMER WAY
BUYING BEHAVIOR & BRANDS
LG SAMSUNG SONY GODREJ VIDEOCON WHIRLPOOL
10%
35%
52%
3% 0% 0%
TECHNOLOGY WISE RANKING
Technology *Figures in percentageSample Size 150 Consumers
GODREJ LG SAMSUNG SONY WHIRLPOOL VIDEOCON
9%
37%33%
15%
6%
0%
CUSTOMER SUPPORT AND SERVICE
*Figures in percentageSample Size 150 Consumers
GODREJ LG SAMSUNG SONY WHIRLPOOL VIDEOCON
5% 7%
43% 41%
3%0%
ATTRACTIVE LOOKS
*Figures in percentageSample Size 150 Consumers
Looks
Service
BUYING BEHAVIOR & BRANDS
*Figures in percentageSample Size 150 Consumers
GODREJ LG SAMSUNG SONY VIDEOCON
34%
22%
10%
34%
0%
LONG LASTING
GODREJ LG
SAMSU
NGSO
NY
WHIRLP
OOL
VIDEOCON
9%16% 19%
53%
3% 0%
BRAND VALUE
GODREJ LG SAMSUNG SONY WHIRLPOOL VIDEOCON
6%
65%
19%
7%3%
0%
FACE OF MICROWAVE OVEN
BRAND & BUYING PREFERENCE
Long Life*Figures in percentage
Sample Size 150 Consumers
Brand Value
*Figures in percentageSample Size 150 Consumers
Microwave Oven
LG SAMSUNG SONY VIDEOCON GODREJWHIRLPOOL
7%
22%
69%
3% 0% 0%
FACE OF TELEVISION
BRAND & BUYING PREFERENCE
TV*Figures in percentageSample Size 150 Consumers
AC*Figures in percentage
Sample Size 150 Consumers
GODREJ LG
SAMSU
NG
VIDEOCON
WHIRLP
OOLSO
NY
7%
43%
19%25%
7%0%
FACE OF AIR CONDITIONER
LG
SAMSU
NG
VIDEOCON
WHIRLP
OOLSO
NY
GODREJ
21% 19%
9%
51%
0% 0%
FACE OF WASHING MACHINE
Washing Machine *Figures in percentageSample Size 150 Consumers
Refrigerator
*Figures in percentageSample Size 150 Consumers
GODREJ LG SAMSUNG VIDEOCON WHIRLPOOL SONY
19%
33% 33%
7%9%
0%
FACE OF REFRIGERATOR
VISIBILITY OF THE BRAND IN TV
1 2 3 4 5
10%
3%
28%
25%
33%
6%
10%
22%
34%
28%
7%
13%
16%
30%
35%
16%
30%29%
25%
0%
15%
30%32%
23%
0%
25%
22% 22%
19%
13%
LG SONY SAMSUNG VIDEOCON WHIRLPOOL GODREJ
*Figures in percentage1, 2, 3, 4, 5 –RANKS
5 – HIGHEST| 1 - LEAST
FINDINGS & CONCLUSION
GENERAL
• Contribution of CDI to GSDP – 6.59% (approx.)
• A person spend about – 48% of his disposable income in CDI
• Living standard has increased
• Better connectivity
• More choices & options
• Affordability
COMPETITION
• High visibility of brands like LG, Samsung, Sony. – But Videocon rarely present
• Not utilizing all source of promotion – Which other brands are making a good use of
• No. of competitors is increasing (including house brands)
• Very intense marketing and reach towards consumers – Videocon inactive
• Deep product line – which Videocon is lacking
• A Good after sales service – many stores do not keep Videocon because of poor service
• Fewer incentives to dealers/retailers
OPPORTUNITIES
• Consumer durables market expected to expand at a CAGR of 14.8 per cent to USD12.5
billion in FY15 (from USD7.3 billion in FY11)
• Demand from rural and semi-urban areas is expected to expand at a CAGR of 25 per cent
to USD6.4 billion in FY15 from USD2.1 billion in FY10
• By FY15, rural and semi-urban markets are likely to contribute a majority of consumer
durables sales
CONSUMER PREFERENCE – for Videocon
• Shifting brand loyalty to other companies
• Low preferred brand
• Brand recall required
• Dull looks & poor technology
• Poor customer service
FINDINGS & CONCLUSION
Source: Corporate Catalyst India, Aranca Research
