In an interaction with India Pharma Outlook, Arjun Bajaj, Director, Videotex International Group shares his views on the current trends in smart TV market and how TV manufacturing is evolving in India.
Smart TV market is expected to grow at double-digit CAGR in the next five years. How do you see the current evolution of this market in India? What are the major factors driving its growth?
The Smart TV market has seen a strong and steady growth especially during the pandemic. India is the world’s fastest growing OTT Market and witnessing a 30% growth YOY in this segment, which indirectly has also boosted the TV Industry. The pattern that has strongly evolved is that of consumers hogging content on TV (cinemas being shut during pandemic), which has surged to record breaking numbers during lockdown. In fact, last year post lockdown the smart TV market really picked up, as it was the only source of entertainment for consumers at home and with all latest releases happening on
OTT platforms & cinemas being shut.
The Smart TV Market was earlier largely dominated by 32inch screen TVs and has now evolved to larger screen. In spite of the price optimization on the TVs, manufacturers too have offered a range of possibilities from mid to high price range, making Smart TV an affordable reality for all. Both surge of Smart TV with booming OTT and preference towards larger screens leads the way forward for the Smart TV Market in India
What are the major challenges faced by TV manufacturers in India? How do you propose to address them?
The key concern is the increased prices of the TVs and shortage of raw material such as the Open Cells which contributes to 70% of the total TV cost. Over a period of time, the cost of the open cells has gone up by 400% as compared to June 2020. Also, another challenge is that the leading smart TV brands in the industry are bearing the margin crunch and not increasing prices, which diminishes the price gap between different category brands. There is also a huge shortage in the semiconductor industry which in return has led to shortage of IC chipsets which are required for the manufacturing. The shortage of the raw materials has impacted the entire electronics industry leading to an overall price rise.
Which are the new technologies emerging in this segment with regard to manufacturing? How are they transforming the segment and making the India market more competitive with the global one?
The government has just started the emphasis on Make in India production, however still a lot of the raw materials is imported from other countries and it is very important that we get these companies in India and setup a
component manufacturing industry, which will help India become a Global Manufacturing Hub. It is important to make components here rather than allowing outside companies to put the assembly plants here in India, as this is not helping India in becoming a manufacturing hub and this in return has added more issues for the domestic manufactures who already have huge manufacturing capacities to support the International/ domestic brands.
Given the second wave of Covid-19, the fear in the minds of migrant workers of returning back to their hometown is also an obstacle that the manufacturing units have yet again started facing.
Where does India stand in terms of research and development in this field when compared to the global market? What measures need to be taken in this direction for further growth?
India is doing a lot of progress and is quite ahead in many sectors. However, for the Consumer Electronics Industry we are majorly dependent on Imports, it’s high time India should focus on setting up a component industry, so that we don’t have to depend upon the other countries in difficult times. Indian Manufacturers such as us are working day and night to provide the best technology products specially designed for the Indian markets as compared to the global brands as they make a centralized product not meeting the demands of many users.
For instance, the television sets designed by the leading player do not meet the demand for the Indian climatic/power condition but we at Videotex have created products that are designed specific to Indian climatic/power conditions. India has the capabilities, however, lacks the resources and support that it should have.
How is the problem of procuring raw materials affecting the business of TV manufacturers? What is the way forward to achieve business continuity?
It is predicted that the first three quarters of the FY 2021-22, Indian Manufacturers are going to face immense shortage of raw material and the prices are going to continue to rise. Till the time the top brands don’t increase their prices, the pricing gap will continue in the market, and the market is going to suffer. Currently, there is immense shortage of components which has led to increase in prices, and overall increase in the cost of the product. However, it is predicted that the shortage of IC’s will be corrected only by the end of this year and supply chain will start improving for both raw materials and Open cell which is being impacted due to the semiconductors.
Where do you see this market in the near future? What can be the road ahead for India to achieve self-reliance in this segment?
The TV market has a great future and huge opportunities as more and more brands coming to India are looking for local factories to manufacture their products. India should draw a lesson from China’s success in the exports. While there is no doubt in my mind that promoting Indian manufacturing is the way forward for the economy, one often ponders how the government is going to tackle the sensitive issues like regulations, skilled labour, custom duties, High GST etc. It is important we promote manufacturing India and not just assembly in India.
