How Much Does it Take to Start a TV Brand in India?

1
Advertisement
  • More than 100 smart TV brands are registered on various e-commerce portals in India
  • China-based vendors are offering 32-inch TVs in prices as low as Rs 5500 for bulk buyers
Futec LED TVs Factory in Noida – EFY Images

Faisal Kawoosa, founder and chief analyst, Techarc, had recently told Electronics For You that the smart TV industry in India was stepping on the trend set by smartphones, a trend that includes aggressively priced products and entry of new brands through the white labeling route. The chances that two different TV brands are manufactured or assembled by a same company, and yet retailed as different products exist more than a brand manufacturing its owns TVs and retailing them. The answer lies in two words – brand licensing. However, entering the smart TV business in India may be difficult for a lot of people through this route as it requires paying brand fees. Comparatively, introducing a new TV brand altogether is much, much easier.

Last year, we went to an event where a lot of China-based TV manufacturers were present. This event was attended by retailers, distributors and many others who form an integral part of the consumer electronics sales channels in India. The idea was simple – to help individuals and institutions start their own consumer electronics brands in India! The only catch was ordering in bulk! (Story here)

But what about an individual or an institution interested in starting his own smart TV business who is not ready to take the China-route? These questions were answered by Harpreet Malhotra, Director, HCV Pvt Ltd (Futec) India.

A million to two is all it takes

The first question that an individual willing to enter the smart TV business in India must ask himself is about the geographical area he plans to cover. For instance if he wants to start retailing smart TVs under a new brand name PAN India, the investment will be on the higher side.

Harpreet explains,”Starting smart TV business in a smaller circle is what we generally advise to people approaching us for orders. Doing same can not only help one do so in keeping the initial investment smaller, but can also help in planning the way forward. The smaller the size of the geographical area, the smaller initial investment will be. We estimate that Rs 10 to 20 lakh is an good amount to step into the business with.”

Research firm Techarc’s prelim estimate figures forecast that smart TVs penetration will increase in the range of 20 to 25 per cent in 2019, when compared to 2018. Speaking about LED TV business in the country, Faisal had earlier told EFY Group, “We expect to see more brands entering in the LED TV space in the country. The focus would be more on bringing the product in the entry to mid level of markets.”

As per a report by Techsci Research, India television market is projected to surpass $ 13 billion by 2023. Growth in the market is led by rising demand from increasing number of independent households as well as commercial and hospitality sectors.

Samrat Electronics, EFY Image

Deciding the TV sizes and area of operation

The best bet for a new TV brand, who does not want to invest a huge amount initially, can be on smaller TV sizes and on Tier III and IV markets. Rural areas also make for a great target audience for a new TV brand. Harpreet explains, “Choosing TV sizes is of utmost importance. If you wish to enter a metropolitan city like Delhi or Mumbai, the TVs you wish to sale should be above 40-inches. These are the areas where 32-inch and lower TV models are slowly witnessing decrease in sales.”

On the rural markets he explains, “However, the scenario is completely different in rural and Tier III and IV markets. Forget smart TVs, a lot of consumers in these areas are still to get their hands on a LED TV. Additionally, prices matter a lot in these markets. The reach of a lot of e-commerce portals is also not that good here. In fact, a lot of these are not ready to deliver in many of these areas.”

Rural India, as per Faisal Kawoosa, is expected to emerge as a key market for the TV industry in India. Most of the tier-1 and tier-2 cities have been penetrated already. However, rural India, is one the markets that is not only huge in potential, but is also untapped at the moment.

Faisal said, “The brands focusing on the affordability will devote a lot of energy and resources in tapping rural opportunities. Rural India is definitely going to be a key market in 2019.”

Interestingly, a new TV brand that goes by the name of Detel has recently established two shops in Rajasthan. Both these shops are located in areas adjoining rural as well as tier 2,3 and 4 markets. Detel claims of launching India’s most affordable TVs twice. Launched at prices below Rs 4,000, these TVs were 17 and 19-inch variants.

It is worth mentioning here that smaller size TVs like 24-inch and 32-inch cost a lot less than the bigger ones. A brand that goes by the name of Shinco, was retailing 32-inch smart TVs for Rs 6,990 to the end-consumer in the country.

Isha Electronics, EFY Image
Isha Electronics, EFY Image

Advertising and initial purchasing: Doing the math

Let’s consider that you want to start your TV brand with 200 TVs initially, 150 units of 32-inch ones and 50 units of 24-inch ones. You can easily contact a couple of TV manufacturers or assemblers in Delhi NCR itself. Remember that the market prices for 32-inch TV variants for end consumers start approximately at Rs 8000 and for 24 inch variants these start at around Rs 5500.

Doing the math, 150 units of 32-inch TVs will not cost you more than Rs 8 lakh (considering TV prices per unit to be within Rs 5000 to Rs 6000). Similarly 50 units of 24-inch TVs will cost you around Rs 1 Lakh 10 Thousand. The total initial investment than comes out to be around a million Rs. The rest of the investment (assuming it to be half a million Rupees) can be used for on-ground banners, social media advertisements as well as transportation.

As this investment amount is good only when you are considering to target a smaller geographical area, the cost of promoting your brand on Facebook should not cost more than Rs 100 or Rs 150 per day. Though setting target audience will be a tough task, it is not rocket science.

Similarly, flex boards also known as advertisement boards, in sizes of 6ft by 2ft each (100 pieces) will cost somewhere around Rs 190 each. The total cost of these comes out to be around Rs 19,000. Even after keeping Rs three lakh out for on-ground and social media promotions, you will still be left with Rs 2 to 2.5 lakh.

 

After sales service – Make or break

The biggest pain point for someone entering TV business in India by importing units directly from China can be in the form of sales and service support. Indian companies, on the other hand, not only provide servicing but also help in sales support.

Harpreet explains, “While we help setup service points anywhere in India, we also help new brands set up sales and marketing strategies. Our team at times also helps in on-ground product activation and advertising campaigns. Launching a new TV brand in a smaller geographical area, also helps one concentrate on one service point.”

Setting up a service center for a new TV brand can actually be done in many ways. A few technicians can be hired and sent from home to home to look into the complaints. These technicians can also be offered to sit at an setup while some field guys can bring in-faulty TVs. The other way around can be signing up a contract with a third party after sales service provider.

Faisal said, “After sales service is an aspect that has a big role in making or breaking of a brand. History is proof that brands with better after sales services enjoy bigger shares of the market.”

Harpreet highlights, “The brands that we have seen make a difference are the ones with super-efficient after sales service network. You have got to make your existing consumers your brand ambassadors and the only way to do the same is by providing them with out-of-the-world service. It is important to check with the TV manufacturer about the kind of support he will be providing in terms of after-sales. If any fault arises in a model or two, he must be ready to replace or offer repair services in real-time.”

Author – Mukul Yudhveer Singh. An avid reader, Mukul finds peace in books and technology. He’s as passionate about writing as he is about playing cricket and hitting the gym. If not writing or reading, you will most likely find him drawing tattoo designs or analyzing political campaigns.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here