Consumer electronic products business in india

Presented by :

Suhel KhanRakesh mishra

INDEX Introduction

History

Current Scenario

Stock Performance

Revenue Analysis

Brick & Mortar Vs. Online

Government Policies

Swot Analysis

Challenges faced by the Sector

Examples of the companies

References

Consumer electronics are electronic equipment intended for

everyday use, most often in entertainment, communications

and office productivity. In British English they are often

called brown goods by producers and sellers.

Radio broadcasting in the early 20th century brought the

first major consumer product, the broadcast receiver. Later

products include personal computers, telephones, MP3

players, audio equipment, televisions, calculators, GPS

automotive electronics, digital cameras and players and

recorders using video media such as DVDs, VCRs or

camcorders. Increasingly these products have become

based on digital technologies, and have largely merged with

the computer industry in what is increasingly referred to as

the consumerization of information technology.

HISTORY In 1965 ,the Electronics Industry in India took off around with an orientation

towards space and defense technologies. This was controlled and initiated by

the government.

The main products were transistor radios, Black & White TV, Calculators

and other audio products that are manufactured and followed that time.

Later in 1982, Color televisions been manufactured & followed for the first

time .

The government allowed thousands of color TV sets to be imported into the

country to coincide with the broadcast of Asian Games in New Delhi.

In 1985 saw the advent of Computers and Telephone Exchanges, which were

succeeded by Digital Exchanges in 1988.

The period between 1984 and 1990 was the golden period for electronics

during which the industry witnessed continuous and rapid growth.

Custom tariffs made the hardware sector suddenly vulnerable to international

competition.

Current Scenario The Indian market for electronic products is estimated at over US$25

billion. The industry is growing at about 30% per annum!

At this growth rate, the market size is projected to exceed US$158 billion

by 2015.

India is attracting big ticket investments from global players like

Solectron, Flextronics, Jabil, Nokia, and Elcoteq.India’s consumer

market for hardware can be a big incentive for the industry.

The growth of telecom products has been breathtaking - India is

adding 2 million mobile phone users every month! With telecom

penetration of around 10%, this growth is expected to continue at least

for another ten years.

India is going to import a whooping US$ 490 billion worth hardware in

the next five years. The country is also emerging a global hub of

electronic hardware manufacturing.

The output of the electronic hardware industry is worth $11.6 billion at

present.

Stock Performance

37%

27%

33%

3%

Consumer Electronics (Brown Goods) Market Share

Mobiles

Audio/Video/GamingComputers

Brick & mortar vs. online: Brick-and-mortar retailers are scared of being reduced to a

"showroom" where shoppers go to try items out before going online to make the final purchase. Some feel that the showrooming panic is totally overblown, but there's one segment of retailers that's particularly affected.

Consumer electronics retailers are experiencing more show rooming than any other category by far.

More than 6-in-10 customers who have used show rooming bought an item online in that category, a presentation by senior director Tiffany Walker. No other product category came anywhere close to that number.

As the biggest consumer electronics big box store out there, Best Buy needs to do something about this fast.

Acting CEO Mike Mikan said as much at his company's recent annual meeting. "[The customer's] needs have changed," he said. "We, unfortunately, have not."

Recent update about electronics by the PM:

In line with Prime Minister NarendraModi's stated agenda of promoting 'Made-in-India' items, the Department of Electronics and Information Technology has proposed to revise the electronics manufacturing subsidy scheme, making it more investor-friendly.

Several large multinational firms such as Panasonic, Samsung and Videocon, among others, are said to have approached the department seeking the same incentives offered to manufacturers of electronics.

The department is currently seeking the industry's inputs on the revised draft of the policy, which was notified in 2012 and is supposed to expire in July 2015. An official said that an extension of the policy for another three years is being proposed.

The electronic industry is valued at $1.75 trillion globally, and is expected to reach $2.4 trillion by 2020, according to 2013 estimates. The organizations had made representations to both the Department of Electronics and IT and the Department of Industry Policy and Promotion.

.

SWOT analysisStrengths

The domestic market is entering

a rapid growth phase, with

projected double-digit growth of

key products such as notebook

computers and mobile handsets.

Low rates of penetration for key products such as computers (2%) and mobile phones (43.5%).

Rising incomes and GDP growth are increasing affordability

Weaknesses

Low incomes and huge digital inequalities.

Large 'grey' market for illegal products.

Relatively low level of demand for higher end products such as LCD TV and 3G phones.

Infrastructure deficiencies, with only 20% of Indian houses capable of receiving broadband.

Contd..

Opportunities

Rapid growth in mobile

subscriber penetration to 145%

by 2015 will drive booming

mobile handset market.

Big opportunity for expansion in

underpenetrated semi-urban and

rural areas.

Hardware sector set to grow

faster after a number of

government measures to

encourage domestic

manufacturing and new

investment incentives under

consideration.

Threats

Global economic slowdown may

affect consumer spending.

Moves to stimulate the hardware

sector having mixed results.

Falling prices

1. Shrinking Operating Margins

Global competition and new innovations are driving prices down. Companies

must continually become more cost-efficient to remain profitable.

2. Complex Global Supply-Chain

More and more, companies are having to juggle internal and external resources

while staying within international standards. Issues such as traceability and

compliance are increasing operational burdens. It is not unusual for

components and sub-components to embark on a journey that touches three or

more continents before reaching the end-consumer.

3. Service and Warranty Management

Leveraging the global supply-chain is putting more focus on supplier quality

management. Having a strong quality and traceability system directly affects

warranty reserve and post-production service hours.

Contd..4. Short Product Lifecycles

With quickly changing consumer tastes and preferences, EMS companies and

contract manufacturers need to have effective New Product Introduction (NPI)

processes in place. Closed-loop communication between sales, manufacturing,

and engineering is vital to ensure product launches hit time, volume, and

quality targets.

5. Uncertain Demand

Aggregately, economic volatility and cyclical demand cause fluctuations in

production. On a more granular level, consumer preference can cause spikes in

demand for an individual product or company. Efficient lean capabilities must

be in place to keep inventory aligned with demand.

Examples of companies:

References http://www.businessdictionary.com/definition/brown-goods.html

http://www.dare.co.in/news/others/cut-duties-on-electronics-hardware-to-12-from-30-assocham.htm

www.themobilestore.in

www.cromaretail.com

http://www.cci.in/pdf/surveys_reports/indias_retail_sector.pdf