3) Chapter 3 - Overview of India s Consumer Durable Industry

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1 3) Chapter 3 - Overview of India s Consumer Durable Industry 3.1 India s Consumer Market India s consumer market is riding the crest of the country s economic boom. Driven by a young population with access to disposable incomes and easy finance options, the consumer market has been throwing up staggering figures. India officially classifies its population in five groups, based on annual household income (based on year indices). These groups are: Lower Income; three subgroups of Middle Income; and Higher Income. However, the rupee income classifications by themselves do not present a realistic picture of market potential for a foreign business enterprise, because of significant differences in purchase power parities of various currencies. In fact, the Indian rupee has a very high purchase power parity compared to its international exchange value. For instance, while the exchange rate of one US dollar is 48.50i Rupees, the domestic purchasing power of a US dollar in the US is closer to the purchasing power of Rs 6 in India, for equivalent needs and services. As a result, India ranks fifth in the world, on purchase power parity terms, despite being having low per capita national income (US$ 340 per capita). (Bailey, Small Packets, Big business, 2003) 3.2 Structure of the Indian Consumer Market The target market segments considered for aspiration and lifestyle goods are the 35 million homes representing the consuming classes and the rich, or some 150 million people. It was the roughly 80 million households that comprise the upper aspiring to lower consuming that so excited the global market when they decided to enter the Indian market in the early 1990 s. It was not until 1992, when the Indian market first began to open up post liberalization, that the MNCs started taking a closer look at the purchasing power of the country s middle class. Inevitably, the first thing they saw was the massive volume of this potential market, rather than its cultural idiosyncrasies. The Indian consumer durables segment can be segregated into consumer electronics (TVs, VCD players and audio systems etc.) and consumer appliances (also known as white goods) like refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers. Most of the segments in this sector are characterized by intense competition, emergence of new companies (especially MNCs) 40

2 and introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies command more than 65 per cent market share in the colour television (CTV) segment. In consonance with the global trend, over the years, demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Products like air conditioners are no longer perceived as luxury products. The biggest attraction for MNCs is the growing Indian middle class. This market is characterised with low penetration levels. MNCs hold an edge over their Indian counterparts in terms of superior technology combined with a steady flow of capital, while domestic companies compete on the basis of their well-acknowledged brands, an extensive distribution network and an insight in local market conditions. One of the critical factors those influences durable demand is the government spending on infrastructure, especially the rural electrification programme. Given the government's inclination to cut back spending, rural electrification programmes have always lagged behind schedule. This has not favoured durable companies till now. Any incremental spending in infrastructure and electrification programmes could spur growth of the industry. The digital revolution is shaking up the consumer durables industry. With the advent of MP3 music files, personal video recorders, game machines, digital cameras, appliances with embedded devices, and a host of other media and services, it is no longer clear who controls which part of home entertainment. This has set off a battle for dominance, and the shakeup is spanning the entire technology spectrum. Microsoft Corp. is spending billions on entertainment initiatives such as its Xbox video game console. Compaq and HP sell MP3 music players that plug into home-stereo systems. Apple Computer is positioning its new imac as a digital-entertainment device. Sony is building Vaio computers that focus on integrating multimedia applications. Philips sells stereos that hook into a high-speed Internet connection to play music from the Web. More startups are trying to carve out profitable niches in digital music, video, and home networking. The industry is witnessing a number of strategic alliances, to 41

3 develop a range of capabilities - electronic hardware, software and entertainment content. As more consumers grow comfortable with technology, companies need to build simpler devices that offer more entertainment and convenience. These new machines need to work together readily, and should be as easy to set up and use as a telephone or a television. Consumerization of technology could be a major phenomenon over the next 5 to 10 years. This could hasten industry consolidation, as healthy companies gain market share by buying out weaker ones at attractive prices. Apart from steady income gains, consumer financing has become a major driver in the consumer durables industry. In the case of more expensive consumer goods, such as refrigerators, washing machines, colour televisions and personal computers, retailers are joining forces with banks and finance companies to market their goods more aggressively. Among department stores, other factors that will support rising sales include a strong emphasis on retail technology, loyalty schemes, private labels and the subletting of floor space in larger stores to smaller retailers selling a variety of products and services. (Bullis D., 1997) Consumer Classes Even discounting the purchase power parity factor, income classifications do not serve as an effective indicator of ownership and consumption trends in the economy. Accordingly, the National Council for Applied Economic Research (NCAER), India s premier economic research institution, has released an alternative classification system based on consumption indicators, which is more relevant for ascertaining consumption patterns of various classes of goods. There are five classes of consumer households, ranging from the destitute to the highly affluent, which differ considerably in their consumption behavior and ownership patterns across various categories of goods. These classes exist in urban as well as rural households both, and consumption trends may differ significantly between similar income households in urban and rural areas. (Bullis D., 1997) 42

4 3.2.2 Growth Scenario Rising disposable income and declining prices of durables have resulted in increased volumes. An increase in disposable income is aided by an increase n the number of both double-income and nuclear families. The market for consumer durables (including entertainment electronics, communitarian and IT products) is estimated at Rs 32 billion (US $7.1 billion). The market is expected to grow at 10 to 12 per cent annually and is expected to reach Rs 60 billion (US$13.3 billion) by The urban consumer durables market is growing at an annual rate of seven to 10 per cent, the rural durables market is growing at 25 per cent annually. Some high-growth categories within this segment include mobile phones, TVs and music systems. Consumer durables are expected to grow at per cent in , driven by the growth in CTV s and air conditioners. Value growth of durables is expected to be higher than historical levels as price declines for most of the products are not expected to be very significant. Though price declines will continue, it will cease to be the primary demand driver. Instead the continuing strength of income demographics will support volume growth. Players in Consumer Durables:LG,Philips,Onida,Videocon,Panasonic,Samsung,Sony (Prahalad, 2001) The Challenges Heavy taxation in the country is one of the challenges for the players. At its present structure the total tax incidence in India even now stands at around per cent, whereas the corresponding tariffs in other Asian countries are between 7 and 17 percent. About 65 per cent of Indian population that lives in its villages still remains relevant for some consumer durables companies. This India, at least a large proportion of its constituents, still buys black and white TVs and doesn't know what flat screens are. Also, foraying into these rural markets has a considerable cost component attached to it. Companies not only have to set up the basic infrastructure in terms of office space, manpower, but also spend on transportation for moving inventory. Even LG and 43

5 Samsung, which are touted as having the largest distribution network in the country,have a direct presence only in 15,000 to 18,000 of the around 40,000 retail outlets (for consumer durables) in the country. Poor infrastructure is another reason that seems to have held back the industry. Regular power supply is imperative for any consumer electronics product. But that remains amajor hiccup in India. (Krishnan) The Opportunities: The rising rate of growth of GDP, rising purchasing power of people with higher propensity to consume with preference for sophisticated brands would provide constant impetus to growth of white goods industry segment. Penetration of consumer durables would be deeper in rural India if banks and financial institutions come out with liberal incentive schemes for the white goods industry segment, growth in disposable income, improving lifestyles, power availability, low running cost, and rise in temperatures. While the consumer durables market is facing a slowdown due to saturation in the urban market, rural consumers should be provided with easily payable consumer finance schemes and basic services, after sales services to suit the infrastructure and the existing amenities like electricity, voltage etc. Currently, rural consumers purchase their durables from the nearest towns, leading to increased expenses due to transportation. Purchase necessarily done only during the harvest, festive and wedding seasons April to June and October to November in North India and October to February in the South, believed to be months `good for buying, should be converted to routine regular feature from the seasonal character. Rural India that accounts for nearly 70% of the total number of households, has a 2% penetration in case of refrigerators and 0.5% for washing machines, offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually. According to survey made by industry, the rural market is growing faster than the urban India now. The urban market is a replacement and up gradation market now. 44

6 The increasing popularity of easily available consumer loans and the expansion of hire purchase schemes will give a moral boost to the price-sensitive consumers. The attractive schemes of financial institutions and commercial banks are increasingly becoming suitable for the consumer. Consumer goods companies are themselves coming out with attractive financing schemes to consumers through their extensive dealer network. This has a direct bearing on future demand. The other factor for surging demand for consumer goods is the phenomenal growth of media in India. The flurry of television channels and the rising penetration of cinemas will continue to spread awareness of products in the remotest of markets. The vigorous marketing efforts being made by the domestic majors will help the industry. The Internet being now used by the market functionaries that will lead to intelligence sales of the products. It will help to sustain the demand boom witnessed recently in this sector. The ability of imports to compete is set to rise. However, the effective duty protection is still quite high at about per cent. So, a flood of imports is unlikely and would be rather need based. Reduction in import duties may significantly lower prices of products such as microwave ovens, whose market size is quite small in India. Otherwise, local manufacturing will continue to stay competitive. At the same time, there will be some positive benefits in the form of reduction in input costs. Washing machines and refrigerators will also benefit from lower input costs. So focus is all shifted to Rural Markets in India and companies are designing best suitable communication strategies for this market. (Saha, 2002) Critical Success Factors for Manufacturers in the Sector All key segments of the Indian consumer durables industry are growing and the industry offers an attractive investment option. Success would require players to address a few key factors, based on the industry drivers and trends. Distribution and Service Network :As the market spreads out from saturated urban regions to low penetration rural areas and tier II/III towns, distribution network and brand recognition will continue to play ever more significant roles in determining market share and profitability. The market for consumer durables is moving towards a 45

7 stage where it could soon be defined as broad as it can be reached. The central government plans of making electricity available for all by 2012, will also open up immense opportunities for the consumer durables segment. Product Technology : While the market is continuously expanding, there are several concerns that will have to be addressed while moving the focus towards tier III towns and rural areas. Total cost of ownership would be a key factor that would drive purchase in these regions. From an organised industry s perspective, success would be determined by superiority of product technology, which could provide added benefits to the customer, for example; low power consumption, low service requirement and low cost of operation. Innovation in Advertising and Promotions : Increasing competition and technology adoption has led to a situation where the basic function of most of the consumer durable goods has been largely commoditised. This has created a situation where identifying a unique differentiating factor and promoting it effectively has become imperative. The advertising and promotions spends in the industry have been growing steadily. Significant focus has been laid on mapping key concerns,that could act as demand drivers and proactive marketing campaigns aimed at addressing specific concerns of prospective customers. For instance, instead of focusing on the basic space conditioning attribute, LG s AC marketing campaigns focus on health benefits resulting from their superior air filtering technology, thus striking a chord with urban consumers for whom safety from pollution and dust is perhaps as significant a need as air-conditioning. Consumer financing has become a major engine of growth in the consumer-durables industry. In the case of more expensive consumer goods, such as refrigerators, washing machines, colour televisions and personal computers, retailers are joining forces with banks and finance companies to market their goods more aggressively. Among department stores, other factors that will support rising sales include a strong emphasis on retail technology, loyalty schemes, private labels and the sub-letting of floor space in larger stores to smaller retailers selling a variety of products and services, such as musical recordings and coffee. 46

8 3.3 Consumer Profile: One of the key reasons for the increased consumption is the impressive growth of the middle class. Around 70 per cent of the total households in India reside in the rural areas. The total number of rural household is expected to rise from 135 million in to 153 million in This presents the largest potential market in the world. According to the study conducted by NCEAR, the number of `lower middle income' group in rural areas is almost double as compared to the urban areas, having a large consuming class with 41% of the Indian middle class and 58% of the total disposable income. The Indian rural market has been growing at 3-4% per annum, adding more than 1 million new consumers every year and now accounts for close to 50% of the volume consumption of fast-moving consumer goods (FMCG) in India. The market size of the fast moving consumer goods sector is projected to be more than double to US$ billion by 2010 from the present US$ billion. As a result, it is becoming an important market place for fast moving consumer goods as well as consumer durables. There were nearly 70 mn households (33% of the total) with an income of more than US$3,000 in These "well-off" households already own relatively expensive consumer durables, such as air conditioners and refrigerators. 600 mn+ effective buyers by mn+ under the age of 20 by mn+ earn Rs. 8,00,000+ ($18,000) a year number to rise to 140 mn by 2011 Table 3-1 India's Income Classes RICH (annual income > US$ 4,700) * Own cars, PCs 3million households 6milliion households CONSUMING (US$ ) 55million 75million * Have bulk of banded consumer goods, 70% of 2-wheelers, refrigerators, washing machines CLIMBERS (US$ ) 66million 78million * Have atleast one major durable (mixer, sewing machine/tv) ASPIRANTS (US$ ) 32million 33million * Have bicycles, radios and fans DESTITUTES (Less than US$350) * Not buying 24million 17million Source: The Great Indian Retail Story 2006, Ernst & Young. 47

9 Consumer Behavior: Availability of lifestyle spending options is increasing for Indian consumers and that inducing higher spends on "status acquisition". Traditionally, Indian consumer is cautious about debts. In recent past, this attitude has changed radically and in recent year's credit is no more a feared entity. Indian consumer buying behavior to a large extent has a western influence. Foreign brands have gained wide consumer acceptance in India and they are much more open for experimentation. Beauty parlors in cities, eateries, designer wear, watches, hi-tech products are a few instances which reflect these changes. Purchasing priorities in India also influence the level of sales of individual products. Penetration data bear this out: televisions in use in 2006 were estimated at 95 per 1,000 populations, far higher than the level for white goods. This reflects the growing demand for entertainment in India. According to Ernst & Young report, 'The Great Indian Retail Story, 2006', the emergence of a larger middle and upper middle classes and the substantial increase in their disposable income has changed the nature of shopping in India from need based to lifestyle dictated. The self-employed segment has replaced the employed salaried segment as the mainstream market, thus resulting in an increasing consumption of productivity goods, especially mobile phones and 2-4 wheeler vehicles. There is also an easier acceptance of luxury and an increased willingness to experiment with the mainstream fashion, resulting in an increased willingness towards disposability and casting out from apparels to cars to mobile phones to consumer durables. Consumer Spending: The rate of growth of spending on discretionary items (unlike basic necessities like food) has been growing at an average of 9 per cent per year over the past five years. A nation of savers, India, has now altered into a nation of spenders. KSA Technopak's Consumer Outlook 2004 report estimates that an average Indian spends 40% of his monthly salary on food and grocery and 8% on personal care products. 48

10 3.4 Indian Consumer Spending Basket : The Indian consumers are spending huge amount of money ie: 53 percent of income is spend on on the durable purchases, the trend for these purchases are seen from their spending basket as follow: Consumer durables 53% Books & Music 32% Movies & Theater 38% Vacation 32% Home Textiles 29% Mobile phones 96% Payment Household help 48% Computer / peripherals 10% The following details shows how Indian consumer has spent in the year Consumer Spend (Year ) Total Consumer Spend : Rs. 20,00,000 cr ($ 445 bn) Retail : Rs. 12,00,000 cr ($ 270 billion) double digit growth expected Organized Retail: growth expected Rs. 55,000 cr ($ 12.4 bn) at current prices 40%+ annual Scope for Organized Retail: of 15+ per cent: there will be lot more consumption. Rs. 2, 00, 000 cr ($ 45 bn) by Av. Salary hike Leading retailers' sales growth: % in

11 Table 3-2 :Urban-Rural divide in Spending percentage: Category Rural Urban Entertainment Consumer Services Durables Misc. Consumer goods Clothing and Footwear Food Source: KPMG/Research The demanding assertive Indian consumer is now sowing the seeds for an exciting retail transformation that has already started bringing in larger interest from International Brands / formats. With the advent of these players, the race is on to please the Indian consumer and its time for the Indian Consumer to sit back and enjoy the hospitality of being treated like a King. 3.5 Consumer Durable Industry Related to our Products being Studied The Consumer Durables industry consists of durable goods and appliances for domestic use such as televisions, refrigerators, air conditioners and washing machines. Instruments such as cell phones and kitchen appliances like microwave ovens are also included in this category. The sector has been witnessing significant growth in recent years, helped by several drivers such as the emerging retail boom, real estate and housing demand, greater disposable income and an overall increase in the level of affluence of a significant section of the population. The industry is represented by major international and local players such as BPL, Videocon, Voltas, Blue Star, MIRC Electronics, Titan, Whirlpool, etc. The consumer durables industry can be broadly classified into two segments: Consumer Electronics and Consumer Appliances. Consumer Appliances can be further categorised into Brown Goods and White Goods. The key product lines under each segment are as follows. 50

12 Table 3-3 Consumer Durables Classification White Goods Kitchen Appliances/Brown Consumer Goods Electronics Refrigerators Mixers Mobile Washing Machines Grinders Televisions Air-conditioners Microwave MP3 Speakers & Audio Equipments Iron DVD Electric VCD Cooking Chimneys Source: Aug 2007, Edelweiss Report on Industrial Production The consumer durables market in India was estimated to be around US$ 4.5 billion in More than 7 million units of consumer durable appliances have been sold in the year with colour televisions (CTV) forming the bulk of the sales with 30 per cent share of volumes. CTV, refrigerators and Air-conditioners together constitute more than 60 per cent of the sales in terms of the number of units sold. In the refrigerators market, the frost-free category has grown by 8.3 per cent while direct cool segment has grown by 9 per cent. Companies like LG, Whirlpool and Samsung have registered double-digit growth in the direct cool refrigerator market. In the case of washing machines, the semi-automatic category with a higher base and fully-automatic categories have grown by 4 per cent to 526,000 units and by 8 per cent to 229,000 units, respectively. In the air-conditioners segment, the sales of window ACs have grown by 32 per cent and that of split ACs by 97 per cent. Since the penetration in the urban areas for these Consumer Durables products is already quite high, the markets for both CTVs and refrigerators are shifting to the semi-urban and rural areas. The growth across product categories in different segments is assessed in the following sections. Consumer Electronics : The CTV production was million units in and is expected to grow by at least 25 per cent. At the disaggregated level, conventional CTV volumes have been falling while flat TVs have grown strongly. Market sources indicate that most CTV majors have phased out conventional TVs and have been instead focusing more on flat TVs. The flat segment of CTVs now account for over 60 per cent of the total domestic TV production and is likely to be around 65 per cent in

13 High-end products such as liquid crystal display (LCD) and plasma display CTV grew by 400 per cent and 150 per cent respectively in following a sharp decline in prices of these products and this trend is expected to continue. The audio/video player market has seen significant growth rates in the domestic market as prices have dropped. This trend is expected to continue through , as competition is likely to intensify to scale and capture the mass market. White Goods: Increased consumer demand is expected to boost the white goods segment to achieve production levels of US$ 5.09 billion by the end of against US$ 4.54 billion in , with a growth rate of 12.5 per cent. Air-Conditioners: Growth in the white goods segment was largely driven by the Airconditioner (AC) segment. Within this, split ACs have been the main growth drivers, recording a growth of over 90 per cent in Growth, albeit at a slower rate. Washing Machines: The sales of washing machines has grown from about 780,000 units to 1,948,000 units during the period, fiscal year 1999 to 2007, registering a near 12.2 per cent annual growth rate. The washing machine market may be segmented into semi-automatic and fully automatic machines. Semiautomatic washing machines enjoy a dominant share of 85 per cent. Fully automatic washing machines have been gaining share as a consequence of product improvement, competitive pricing and resultant convenience. However, semi-automatic machines will continue to play a major role in the Indian market for quite some time. Fully automatic washing machines have been the growing at 44.5 per cent and semi-automatic segment, at about 18 per cent. Refrigerators: Refrigerators are one of the most sought after appliances in Indian middle class homes. The refrigerator market has two segments: Direct Cool and the relatively new Frost-Free type. The market for refrigerators in was about 6.5 million units. The growth of refrigerator segment is projected to be between 18 to 22 per cent over the next 5 years. A critical success factor for the refrigerator market, given its widespread use, is deeper reach into the market and increased penetration. Recently, the market is getting reinforced by the replacement segment as well. 52

14 Vacuum Cleaners: Vacuum Cleaners are an emerging segment in the Indian market, still at a nascent stage. The drivers for demand have been the improvement in life style and higher aspirations of urban middle class and the top income brackets. While the market has been growing, this segment is not expected to reach significant volumes soon. Part of this could be attributed to the lifestyle compatibility of Indian customers with the product. In the large majority of Indian houses, for instance, floors are not carpeted and the product will have to meet dual requirements of sweeping and mopping. Another impediment to the adoption of vacuum cleaners has been the availability of cheap domestic help in most cities. (Bagozzi, 2002) Domestic Electrical Appliances : Brown goods or domestic kitchen appliances are indicators of the changing consumer scenario in post-liberalisation economic environment. The major products constituting the brown goods market are mixers, grinders, irons, microwave-ovens, rice cookers, water heaters or geysers, electric fans and exhausts. The branded brown goods market has expanded at a significant pace and is expected to retain the momentum into the future as well. The market has been transformed by the entry of over a dozen new brands, moreover competition has intensified. While focus on price competency remains a key priority, players have also started focusing on other product features such as safety and total cost of ownership of the device. Goods, like the rice cooker have been continuously growing in a slow and steady manner over a significant period of time, while microwave ovens have grown exponentially after the initial period of customisation to local requirements. The electrical iron market can be divided into two segments: heavy and light-weight. The market is also segmented into two sub-segments: steam and non-steam irons. India being a tropical country, electric fans are an essential utility for more than six months of the year in most parts of the country. The present market size is estimated at around 11.6 million pieces. The market is divided among ceiling, pedestal, wall and table fans. Industrial and exhaust fans are another important segment. The major players include Orient Fan, Crompton Greaves, Jay Engineering, Bajaj Electricals, Polar, Khaitan and Alsthom. 53

15 The electrical appliances industry, which had been focused on the urban market, is now reaching out to semi-urban and rural markets as well, because of the shift in living style of the population, increasing electrification of villages and relatively higher purchasing power of consumers. As the market penetrates into the core middle class segment in both urban and rural areas, it is expected to expand phenomenally, offering large volumes to the industry. (National Institute Economic Review,1998) 3.6 Players & Market Share in Consumer Durable Industry 1) CTV The major brands in the Indian CTV industry are LG, Samsung, BPL, Onida, Videocon, Onida, Sansui, Sony, Akai, Aiwa, Philips, Panasonic, Sharp, Thomson and Daewoo. Competition has also intensified with Chinese consumer electronics player Haier, German company G-Hanz and Japan's Hitachi having leaped into the colour TV market. The company s marketing their CTV products under these brands are as follows: Company BPL Limited Videocon International Limited MIRC Electronics Limited Sony India Private Limited LG Electronics India Limited Samsung India Electronics Limited National Panasonic India Limited/Matsushita Television and Audio Private Limited Kalyani Sharp India Limited Thomson Consumer Electronics India Limited Brands BPL Videocon, Akai, Sansui, Toshiba Onida and Igo Sony LG Samsung Panasonic Sharp Thomson The Indian television industry has a size of around Rs 96 billion, comprising colour television (CTV) of Rs 91 bn and B&W TV market of Rs 5 bn. The top four players (LG, Samsung, Videocon group and Onida) have consolidated their position. Today, they account for 69 per cent of the market, up from 43 per cent a couple of years ago. Two or three factors have caused this change. BPL, once a leader with over 20 per cent market share, has dropped to 5.2 per cent. Second, multinationals brands like Sony, 54

16 Panasonic, Thomson, and Sharp have lost ground. Third, regional brands like Oscar, Texla, Weston, and Beltek have lost market share. The reason behind this is that the consumer electronic and the CTV market is characterized by continue innovation and use of state of art technology which these companies have been unable to keep pace. 2) Refrigerator Refrigerators constitute the second largest product segment within the Indian consumer durables sector in India, with an estimated annual turnover of Rs 39 bn during FY2005 with an estimated sale of 4.1m units. According to FICCI Survey April-March Whirlpool and Godrej are the top two players with market shares of 27 per cent and 20 per cent respectively. Electrolux Kelvinator and LG compete for third and fourth position with market shares of 16 per cent and 14.5 per cent respectively. Videocon (11 per cent), Samsung (6), BPL (4), Voltas and Akai are other significant players. Company BPL Limited Videocon International Limited LG Electronics India Limited Samsung India Electronics Limited Whirlpool of India Ltd Godrej & Boyce Mfg. Co. Ltd. Voltas Limited Electrolux Kelvinator Brands BPL Videocon, Akai LG Samsung Whirlpool Godrej Voltas Electrolux Kelvinator, Electrolux and Allwyn 3) Air-Conditioner The size of the room Air-conditioners industry is estimated at 1.1 m in volume terms, and Rs 24 bn in value terms. According to FICCI Air Conditioners (AC) it reveals that Indian AC industry, which has mainly dominated by players like Carrier and Voltas, has been taken over by the new MNCs in the last few years. AC market is dominated by four major players LG, Voltas, Carrier and Samsung. LG is the market leader with a 55

17 market share of 29 per cent followed by Voltas (11) and by Carrier and Samsung (9.2 each) in addition to other players like Hitachi and Videocon. Company Mirc Electronics Limited Videocon International Limited LG Electronics India Limited Samsung India Electronics Limited Whirlpool of India Ltd Godrej & Boyce Mfg. Co. Ltd. Voltas Limited Electrolux Kelvinator Blue Star India Ltd Daikin industries, ltd. Brands Onida Videocon LG Samsung Whirlpool Godrej Voltas Electrolux Blue Star Daikin 4) Washing Machine The Washing Machine industry has become highly competitive as a number of brands have entered the market and the consumer has a wide choice. Some of the company and their brands are as follows: Company MIRC Electronics Limited BPL Limited LG Electronics India Limited Samsung India Electronics Limited Whirlpool of India Ltd Godrej & Boyce Mfg. Co. Ltd. Electrolux Kelvinator Brands Onida BPL LG Samsung Whirlpool Godrej Electrolux LG Electronics has registered a remarkable growth of 36 % in the Washing Machine Segment in H1 The Fully Automatic Washing Machines segment has recorded a remarkable performance where volumes have grown by 22% and value by 25%.Here again LGEIL happens to be the undisputed leader with a 30.7 % market share in Fully Automatic Washing Machine and 33.7 % market share in Semi Automatic Washing Machine. (Source: ORG-GFK, May 2004). 56