South Korean giant Daewoo's TV pricing strategy to focus on value

5% higher than Chinese, but 8-10% lower than Korean competitors

South Korean giant Daewoo India is entering the consumer electronics and white goods market, capitalising on the falling and stagnant market share of Chinese brands in this space despite the growing market.

  It will launch its light-emitting diode (LED) television (TV) range in the first quarter of next year, and the TVs will be assembled by electronics manufacturing services (EMS) players in India. This will be followed by an entry into washing machines, refrigerators, and air conditioners (ACs).

  Explaining the reason for its comeback after 19 years in India, in what is now already a highly overcrowded market, Daewoo India Managing Director H S Bhatia says: “The penetration of white goods and consumer electronics in India is still low, so there is big growth potential. We also see a niche market opening up due to Chinese brands losing market share or remaining stagnant after dominating this area. So we will leverage superior Korean technology with an attractive pricing strategy — our LED TVs, for instance, will be 5 per cent higher in price than Chinese brands but 8-10 per cent lower than LG and Samsung.” 

Singh points out that their focus, unlike the Japanese brands which are at the premium end, will be on the “value-for-money” proposition, similar to their Korean competitors. They also plan, like washing machines, refrigerators, and ACs (where 

domestic brands like Havells and Voltas also sell), to offer their products at a similar price range.

  Singh highlights the large upside available in the country. Penetration is still low in many segments of the market. For instance, in TVs, industry estimates say TV set penetration is at 73 per cent of total households (notwithstanding that many households have more than one TV). So, the scope for expansion and upgrading to new technology and larger screens is immense.

On the other hand, penetration in refrigerators is 33 per cent, washing machines 18 per cent, and ACs just 7 per cent.

 

The Korean company, which was set up in India last year, has already started selling inverters, solar panels, lithium-ion batteries, and electric bicycles in some markets and is now venturing into the larger market.

  Daewoo was in India since 1996, offering everything from TVs to washing machines and refrigerators, but decided to pull out in 2005 after its South Korean parent went bankrupt. It made another aborted attempt in 2018-19 by licensing its brand to a local manufacturer to sell TV sets, among other products.

  Daewoo is already in advanced talks with at least three EMS players in India to outsource assembly to domestic vendors eligible for production-linked incentive schemes. Singh says their plan is to start with 30-40 per cent localisation and then increase it to 70 per cent within a couple of years.

  Of course, Singh concedes that there will be challenges — they have to build the Daewoo brand from scratch, as the country’s youth has hardly any connection to their presence earlier in India through electronics or automobiles nearly two decades ago.

The company is also working on building a pan-Indian distribution network and expects an all-India presence to take up to two years. They prefer to go slow and steady in phases.