Indian consumer electronics industry to grow by 25% annually: MD, Mirc Electronics, Onida
Vijay Mansukhani, speaks to exchange4media about the resurgence of Onida, the scope of growth of consumer electronics market in India and the reasons why Indian consumer electronics brands don’t compete on a global scale
The stress on the Indian consumer electronic brands is lessening. In the past few years, the homegrown brands, which dominated the markets in the pre-liberalized era, have been making a comeback. One of the biggest factors that have helped the Indian consumer electronic brands gain confidence in a market dominated by foreign brands with deep pockets is Goods and Services Tax (GST.) It has helped create a level playing field, enabling homegrown brands to become competitive once again.
Amid this changing market dynamics, Onida, the brand known for its iconic devil mascot, is making a big comeback. From new product launches to big marketing spends, Onida’s resurgence is poised to upset other players (mostly MNCs) who least expected a comeback story from a local brand.
In an interview with exchange4media, Vijay Mansukhani, MD, Mirc Electronics Ltd, (Onida,) spoke about the resurgence of the brand, the scope of growth of consumer electronics market in India and the reasons why Indian consumer electronics brands don’t compete on a global scale.
Why haven’t the Indian consumer electronic brands been as visible as the global consumer brands? Is the market too competitive for homegrown brands to survive?
There is no simple answer to that. What we got from our earlier association with Japanese companies were their culture and expertise. We inherited a culture of innovation and quality. The joint venture taught us innovation and quality. When economic liberalization happened, Samsung and LG came into India with deep pockets and easily dominated the Indian market. Instead of protecting the homegrown industry, we let everyone come in. To add insult to injury, we had a system where various states in India gave sales tax advantage to MNCs for manufacturing. Some states went even further by giving these companies options such as no excise and no income tax. We had no option but to do fragmented manufacturing by having units in different states. What we did to counter this unfair scenario was to cut down on advertising and Onida’s iconic devil disappeared in order to stay afloat.
What according to you is the biggest factor that has brought back confidence among the Indian brands?
Our patience paid. The implementation of GST has helped create a level playing field. Also, the ‘Make in India’ campaign launched by the government helped local brands immensely. We also added a layer of automation in our manufacturing units and trimmed our workforce to become more efficient and also cut down on cost. All this has helped us return to the market with greater confidence.
How is the current market climate for the Indian-origin consumer electronics brands?
The tables have turned. Now we have a comeback story to tell. And for the last five quarters, we have been making fabulous profits. This turnaround was also because everyone at Onida kept asking the question —Why Onida? This helped us deliver added value. Also, quality for us means that the product will not fail ever. We have ensured that innovation becomes a big identity for our products. The biggest strength of Onida, which has helped us withstand the storm of MNCs, is our world-class Research & Development (R&D) unit. Our electrical and mechanical R&D is so strong that we are far superior in picture quality and design than other international brands.
How is the consumer electronic market poised in India, given that we don’t have a high penetration of TVs and ACs?
To give you an idea, this year alone, we launched 64 new models of inverter air conditioners. To make it a different offering, these air conditioners will have inbuilt IoT and air purifiers. Moreover, demographics are working in our favour. Mobile phones sucked out a lot of money from the consumer electronics space. Now everybody is so satiated with mobile phones that its craze is cooling down a bit. And as India gets fully electrified, consumer electronics is slated for a big growth in the coming few years.
Within the consumer electronics industry, I see a growth of 25 per cent annually across all segments. At this moment, we are just catering to the domestic demands and we should be in a position to take on international demand too. Chinese brands have been successful in the mobile phone segment only; they have not been successful in segments such as TV, AC or washing machine. We want to make India proud of the ‘Made in India’ label.
Why don’t we see Indian consumer electronic brands competing on a global stage?
We have world-class technology, but we don’t have world-class economies of scale. World-class economies of scale have to come in because China manufactures 100 million AC units, while we manufacture only 5 million and they can manufacture much cheaper than us because they have got economies of scale. For the same quality, Chinese will make it cheaper than us, thus will be in greater demand because what matters ultimately is the price factor.
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