1) Durables majors confident of 30% growth in 2010

The Hindu, October 8, 2010

R. Ravikumar, Chennai

The consumer electronics and durables industry is expected to post at least 20-25 per cent
growth this calendar year. Industry majors, LG and Samsung, are confident of
outperforming the industry with at least 30 per cent growth in 2010 over 2009.

According to Mr Pradeep Kumar, spokesperson of the Consumer electronics and

Appliances Manufacturers Association (CEAMA), aided by increasing household income
and expanding distribution networks, newer technology and price erosion in certain
categories, the durables industry has seen better growth in 2010.

For example, in Q2 (April-June) 2010, 1.32 million air-conditioners were sold against 1.2
million in the comparable previous year period. Refrigerators registered a 30 per cent
growth with total sales of 1.7 million units in Q2, 2010 (1.3 million).

In the audio-video segment too, the same kind of growth has been witnessed. LCD TVs,
backed by sporting events and festive season demand, gained major sales during the
period.

The major players such as Samsung and LG are focusing on structural revamping,
launching new technologically superior products and increasing after-sales service

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network. They are replacing and upgrading their products – particularly air-conditioners,
washing machines and refrigerators to drive the market demand in metros and tier II
cities, say industry watchers and major retailers.

Says Mr Ajai Bajaj, Business Head (Air-conditioners), LG India, so far this year, LG has
introduced 36 new models across split and window air-conditioners in the market.

“We have seen a growth of a little over 30 per cent in the first nine months of this year
over that of last year,” he said. LG, which posted a turnover of Rs 13,000 crore in 2009,
expects to register 30 per cent growth “comfortably” this year. LG commands 28 per cent
share of the country's air-conditioner market.

According to Mr Rajiv Jain, Business Head (Washing machine and Refrigerator) LG

India, the company has completely revamped its entire range of top-end front-loading
washing machines with 13 new models during the year.

“Besides, we introduced a range of direct drive models too.”

In the refrigerator segment, LG launched over seven side-by-side models (which are part
of the top-end collection).

“We expect these product categories to post at least 35 per cent growth in 2010. In fact,
our fully automatic washing machine category has so far registered a growth of 50 per
cent,” says Mr Jain.

Samsung too introduced a lot of new models in these categories. It has launched nine new
models in its top loading washing machines category with 6.2kg-7.5kg capacity.

“The new product range is differentiated on account of its superior performance and
water saving features,” said Mr Ravinder Zutshi, Deputy Managing Director, Samsung
India.

The company has also signed up Bollywood actor Priyanka Chopra as its new Brand
Ambassador for its Home Appliance products. The company's turnover crossed $2 billion
in 2009.

“We hope to post over 35 per cent growth during 2010,” says Mr Zutshi.

2) Consumer durable majors get ready for record sales

New launches, easy finance and promotional offers are key drivers.
The Hindu, October 18, 2010
Rajalakshmi Sivam

Festive feel. LCD and LED televisions are expected to post strong sales
Financing options for consumer durables are back in full force after a lull during the
financial crisis

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Dealers of consumer durables too are getting more attractive incentives to drive sales

Consumer durables are already among the fastest growing industry segments over the
past year.

But players in the industry aren't resting on their laurels. They are getting ready with new
product launches across categories, lining up easier options of finance from NBFCs and
lacing them with other features to accelerate sales over the next three months as the
country goes into the festive season.

New launches

Players such as Whirlpool India, TTK Prestige, Bajaj Electricals and VIP Industries are
some that have lined up new product offerings. Whirlpool is launching a 180-litre
refrigerator and three models of a new semi-automatic washing machine. Bajaj
Electricals has entered the water purifiers segment.

A plastic pressure cooker that can be used in a microwave oven is the planned offering
from TTK Prestige while the moulded luggage manufacturer VIP Industries has plans to
launch three models of soft luggage for the premium business traveller. These would fill
the shelves of showrooms across the country ahead of Diwali.

Players are adopting a specific focus on premium products this year, as consumers are in
the mood to upgrade. Among high-value durables, LCD and LED televisions are
expected to post strong sales.

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The market for lower priced CRT colour televisions has been shrinking every year and
this trend is expected to continue. Air-conditioners may, however, see moderate sales as
monsoon rains are keeping consumers cool.

Easier finance
Financing options for consumer durables, which were practically absent last year in the
aftermath of the crisis, are back in full force too.

Says Mr B.A. Srinivasa, Director, Viveks Ltd, a leading durable retail chain in South:
“Consumers have better offers than last year in terms of extended instalment period and
lower down-payment requirement on finance schemes across brands”.

In an attempt to drive sales, consumer appliance manufacturers have rolled out finance
schemes with down payments as low as 8-10 per cent of the cost, by tying up with
lending institutions; the single largest player here being Bajaj Finserv.

Mr Devang Mody, Business Head- Sales Finance & Cross Sell, Bajaj Finserv, says, “In
high-end products like LED televisions, many manufacturers are offering schemes that
require a 17-25 per cent down payment with the option of settling the balance in the next
12-14 months. And yes, with the ‘zero' interest options, customers are getting a real value
bet”.

It is a win-win situation here; the financier gets his business and the manufacturer gets
volumes.

Mr Mody expects robust turnover in theconsumer goods segment. “We expect this year to
be the biggest-ever festive season for consumer durables. Demand for loans should be
significantly higher than industry growth given the higher loan required for high
aspiration product categories like LCD/LED and side-by-side refrigerators”.

Dealer schemes
Dealers of consumer durables too are getting more attractive incentives to drive sales.
Bajaj Electricals, for example, takes its dealers, who have crossed sales target of Rs
5,51,000 (between July and end-October), on a trip to Kuala Lumpur.

Bajaj Electricals offers discounts in the range of Rs 1,000-2,500 on microwave ovens.

VIP Industries is doing some cross-promotions by tying up with players such as Jet
Airways, Kingfisher Airlines, HDFC Bank and Kotak Mahindra Bank. Whirlpool has
earmarked around Rs 20 crore for marketing spend this Diwali.

The manufacturer-run exclusive showrooms and the dealer and retailer venues are
sporting a new look, with new in-store advertising techniques.

The modern format stores of TTK Prestige, Mr K. Shankaran, Director, Corporate

Affairs, TTK Prestige, says, will drive a lot of impulse purchases this Diwali.

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3) LEDs, LCDs light up Diwali sales
The Times of India, October 28, 2010
Krishnendu Mukherjee TNN

Kolkata: Diwali has lit up the consumer durables sector this year even before its arrival.
From LCDs and LEDs to refrigerators and washing machines, sales are picking up.

“We are betting big on the LED segment this time. And from nonfestive months to
festive months, we have seen an almost 150% growth in the LED/LCD segment,” says
Pranay Dhabhai, MD, Akai India, which started its campaign before ‘Navratri’ and
expects more pick-up in sales

“Flat panel television sets, including plasma and LCDs, have seen almost 100% growth
in festive sales this year,” says Manish Sharma, director, marketing, Panasonic India. For
Panasonic, almost 30 to 35% of total business comes from festive sales.

According to Ruchika Batra, general manager, corporate communications, Samsung,

South West Asia, the electronics major is targeting a 100% volume jump this year in the
flat panel segment.

Sony, which is the market leader in LCDs, expects a 50% growth in Diwali over last
year. “We have already recorded increased customer footfalls compared to last year and it
is increasing steadily,” says Tadato Kimura, general manager, marketing, Sony India.

Shanta Roy Sanjeev, head, marketing, Haier Appliances India, says, “Lifestyle has
evolved and people understand the need and aspire to upgrade lifestyle with hitech
products.” The company expects a robust 200% year-on-year growth in sales this festive
season.

Betting big on the changing lifestyles and a healthy economic momentum, LG India eyes
a growth of 45% this Diwali. According to Amitabh Tiwari, national sales head, LG
India, the company is expecting a sales turnover target of Rs 3,600 crore in home
entertainment and home appliances. It is spending Rs 65 crore on festive campaigns.

And for consumers, it’s raining freebies. According to Akai’s Dhabhai, in certain
locations his firm is offering watches and DTH connections free with products. “We have
some value-added offers with our products and we are expecting an over 20% jump in
this year’s festive sales,” says Dhabhai, adding that festive sales comprise 30% of a
year’s total business.

Easy finance schemes also have a role to play. “Freebies playing a good role in smaller
cities. But in themetros,0%financeandthewarranty schemes are doing the trick,” says
Sharma of Panasonic.

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4) Durables dazzle as prices tumble
Demand For Premium Consumer Electronics Soars
The Economic Times, October 28, 2010
Pramugdha Mamgain NEW DELHI

IF SELLING like hot cakes is a safe metaphor for soaring sales, these are outselling hot
cakes. Well, kind of.

Growth rates in sales of premium consumer electronic products such as LED televisions
and Blu-ray disc players are outpacing those of mass consumption products this festive
season, with rising incomes in a booming economy and a steep fall in prices of these
items triggering a demand boom that only promises to get better thanks to a strengthening
rupee.

The prices of light-emitting diode (LED) televisions, high-definition camcorders and

home theatres have fallen by up to 30% since January, while Blu-ray disc players cost
just half of what they used to at the start of the year, thanks to cheaper raw materials,
higher volumes and a stronger rupee.

“The drop in prices of some key raw materials and growing economies of scale is the key
reason for the steep fall in prices of high-end products,” says Rishi Tandon, product
group head (flat-panel TV and home theatre) at LG India, the country’s largest consumer
durables maker.

LG has slashed the price of its entry-level 32-inch LED TV by more than 25% over the
last 10 months to 40,000. Rival Sony too has cut its entry-level LED model’s price by a
similar amount to 52,900. Mr Tandon attributes this to a global drop in LED panel prices.

Plus, the rupee has been growing stronger, making imports cheaper. The rupee rose 9%
against the US dollar in the last 16 months. Most premium electronics, or their key parts,
are imported.

Indians taking up new tech

IN FACT, as ETreported recently, the festival demand for premium consumer products
took most marketers by surprise and forced them to tweak their product mix and
promotional activities in favour of high-end products.

Higher sales lead to economies of scale, making it possible for companies to work on
tighter margins.

"The Indian consumers have shown good adoption of new technology and this is one key
factor fuelling the growth of premium technology apart from factors like growing
disposable incomes and increasing affordability," says R Zutshi, deputy managing
director at Samsung India.

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While prices of entry-level Blu-ray disc players have halved since January to Rs 9,000-
10,000, those of HD camcorders have dropped by more than 20%. Home theatres and
digital SLR cameras too are 10-12% cheaper than 10 months ago.

Now, companies are pushing new technologies. Going forward, electronics players such
as LG, Sony and Samsung are expected to shift their focus to LED televisions from
existing LCD televisions.

Technically, an LED TV is a member of the LCD TV family. Both have liquid crystal
displays. The only difference is, LED uses a panel of light-emitting diodes for back-
lighting while a traditional LCD screen uses cold cathode fluorescent lamps.
This has a dramatic impact on picture quality and makes the set much slimmer issues so
close to the new-age consumer who aspires for the best in everything.

The LED TV segment, which is growing manifold every quarter, is expected to

contribute 10% of LCD TV sales, projected at 3 million units, this year. The share was
less than 1% last year.

"The price difference between a normal LCD and an LED TV has come down drastically
and even first-time buyers are considering buying an LED TV these days," says LG's
Tandon.

That is because the initial premium on LED television when it was introduced as a new
technology is gone.

The same is the case with Bluray players and HD camcorders. They no longer have the
'new tech' premium, their prices are now being rationalised.

"When we create sub-categories we charge the market for it since we are creating a
market which did not exist earlier. So, new products are priced higher," says Alok
Bhardwaj, senior vicepresident at Canon India. Entry of new players and market
competition cause prices to fall, he adds.

But electronic companies expect prices of high-end products such as LED TV, Blu-ray
players and HD camcorders to come down further over the next 2-3 months with the
rupee growing stronger, making imports cheaper. This will make more consumers go for
these products.

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