Consumers in the rural markets could not have asked for more this festival season -- prices of colour televisions have crashed to unheard of levels.
As big brands penetrate deeper into rural and semi-urban markets, smaller players have slashed their prices to survive.
As a result, a branded 14-inch colour television is available for as low a price as Rs 3,600, a 20-inch CTV for Rs 6,000 and 21-inch CTV for Rs 6,200. Just three months ago, a 14-inch cost nothing less than Rs 5,000 and a 21-inch CTV around Rs 8,000.
"What happened in between was the rains and the realisation that the rural demand would pick up. So every company, including LG and Samsung, turned to these markets with low prices. But their prices still do not match ours," says RS Khandari of Beltek, which has launched a 21-inch pure flat CTV for Rs 7,990.
Arpita Khurana, the young director of another local firm Oscar, which has conspicuously made its way into the ORG-Gfk's list of top ten CTV markets this year, says, "As per our assessment, the rural market is growing at the rate of 80 per cent year-on-year. This is the market, which is the most lucrative. But in the rush of competition, prices are at their lowest and margins are squeezed significantly."
Oscar is selling a 14-inch for Rs 4,490. A little haggling, and the dealer is ready to give you a 'better' price.
R K Caprihan, an old industry hand and the chief executive of The Kelon Corporation, claims he is selling 14-inch for Rs 3,600 and a 20-inch for Rs 5,500. "We are forced to bring down prices, there is such a huddle here," he says.
Big companies are finding it hard to match these prices. For instance, a 14-inch CTV from companies such as Samsung and LG -- the leaders in the market -- come for close to Rs 5,500 and a 20-inch for around Rs 7,500.
CM Singh, head of LG Electronics' CTV division, admits that though the company gets 70 per cent of its sales from the rural markets, it has encountered well-entrenched local players in markets like Punjab and Uttar Pradesh. These local players sell at a sizeable discount to the national players.
In the month of September, the CTV industry bought 950,000 picture tubes from domestic manufacturers. There is also some amount of imports coming in the high-end segment. Plus, there has been some inventory built up because of poor sales after the cricket World Cup.
Says a Cetma executive, "The total number of units floating in the market is around 11-13 lakhs (110-130 million). Industry has to sell at least 10 lakh (1 million) sets during the month, or it can declare a holiday for the next two months."The falling prices are understandable.