Sale of radio sets fail to keep pace with boom

Sale of radio sets fail to keep pace with boom

Author | Source: The Economic Times | Wednesday, May 16,2007 9:23 AM

Sale of radio sets fail to keep pace with boom

NEW DELHI: Sale of radio sets has failed to pick up in line with the ongoing boom in radio channels. While urban customers may be using cell phones and car stereos to access radio programmes, high prices of radio sets and unreliable grey market products seem to hold back the rural consumer. As a result, sale of radio sets has been stagnant for nearly four years.

According to the Consumer Electronics & Appliance Manufacturers Association (Ceama), the number of radio sets sold in a year has been stagnant at 7 million since 2003. The share of the organised radio sets market has also been stagnant at 30% while the grey market constitute 70% of the radio market share.

“The primary reason for the stagnation, especially in the case of the organised market, is the high tax component of 30% on a radio sets which encourages grey market operations,” said a Ceama spokesperson.

Philips, leader in the organised radio sets market, has reported a mere 7% increase in sale of radio sets over the last three-four years and its market share has remained constant. “The organised sector has not been able to exploit the potential of the market,” Elin Electronics director B S Sethia said. He added that the high taxes and unscrupulous trade have encouraged grey market operations.

The industry holds the view that in rural and semi-urban areas, a radio set from the grey market is looked upon as unreliable. On the other hand, products from established companies turn out to be expensive.

In urban India, the cell phone and car stereo segment seems to be meeting the growing demand for radio sets. Another reason for the stagnation is the ever expanding popularity of television, with sale of TV sets growing by nearly 12% in 2006-07.

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