MONEY CONTROL - Can Japan’s Aiwa crack Indian TV market with offline focus, premium branding?

AIWA India affirmed that despite being a Japanese brand with premium offerings, its TVs will be priced 20-30 percent lower than those sold by Sony

Japanese consumer electronics firm Aiwa, which re-entered India in 2021, ventured into the Indian television market by rolling out the Magnifiq models. The TVs are available in screen sizes ranging from 32 inches to 65 inches and priced between Rs 29,990 and Rs 1,39,990.

Taking the cue from Sony, the Kosaka, Akita-based company will largely be demonstrating these models through offline channels and will not be introducing any TV with a screen size smaller than 32 inches. AIWA India has affirmed that despite being a Japanese brand with premium offerings, its TVs will be priced 20-30 percent lower than the ones sold by Sony.

Aiwa India managing director Ajay Mehta told Moneycontrol, “Technologies like OLED or QLED are not groundbreaking anymore even in India. Aiwa, being a Japanese brand, one aspect is (our) relationship with Google (for this) real Android 11 product.  We have a price advantage from customers from Sony by 20-30 percent.  And this is a world-class, fully equipped product. We hope to be positioned below LG, Samsung, Sony, (in terms of market share) in order to offer our customers a very good product.”

Aiwa India's TV market entry comes at a time when the share of smart TVs in India’s overall TV market grew 33 percent YoY in Q1 2022 to reach its highest ever at 89 percent, according to the latest research from Counterpoint’s IoT Service.

While Xiaomi led the smart TV market during the quarter with a 14.3 percent share, followed by Samsung at 13.1 percent. Counterpoint also claimed that the share of smaller brands such as BPL, Haier, Toshiba, and Sansui had increased during the quarter. Sony had a 5 percent share of the smart TV market in Q1 2022.

Consumer preferences 

On the market trends, research analyst Akash Jatwala said: “The smart TV market is showing immense growth driven by the rising demand for home entertainment, a wide variety of affordable launches, an increase in broadband penetration, and multiple discount offers from retailers. Besides, consumers are opting for enhanced specifications to get a better viewing experience, like sound system improvements and larger screen sizes.”

Aiwa’s Mehta revealed that the Indian market size for TVs is about 17-18 million units per year and this is growing at about 8 percent per annum. He hopes that after five years, it will be 22-23 million units per annum, and AIWA will be able to corner 5 percent of the market.

“We are not looking for any disruption in the market with low-cost products. We are looking to bring in reasonably priced products, which will be available ranging from approximately Rs. 16,000-17,000 going up to Rs. 1 lakh (after offering discounts) . We are looking to sell 1.5 million units this year,” Mehta said.

“ Also on the anvil is a 75-inch TV which will be above Rs 1 lakh. We try to achieve 4-5 percent marketshare (in the total TV market) in the next four-five years. Within the TV space, 55- and 65-inch TVs, with a built-in soundbars, will account for 25 percent of its total TV sales,” added Mehta.

Offline-driven market 

When queried about its offline sales strategy, Mehta revealed: “We sell TVs through 500 retailers across top 20 cities in the first phase. Later on, we will go to tier 2 and 3 cities.

According to Counterpoint, India’s smart TV market is mostly offline-driven, with 69 percent of the shipments happening in offline channels but online channels are increasing and offering various discounts.

While aiming for sales of $50 million this year, Aiwa India’s medium-term objective is to clock $ 1 billion in turnover by 2027-28.

“Out of the projected $1 billion business in the next five-six years, approximately 50 percent will come from televisions, air conditioning another 10 percent, audio 10 percent, balance 30 percent will be through other products such as washing machines, refrigerators, home appliances and so on and so forth,” added Mehta.

 Retailer-led approach 

While Aiwa has partnered with Dixon Technologies for manufacturing television sets in India, it has no medium-term plan to either build a self-owned manufacturing facility in the country or export products from here.

Industry analysts reckon that Aiwa’s brand name will help it gain market share. However, its expectations of building a 5 percent market share in the next five years with an initial marketing budget of only Rs 160 crore, along with an offline-only approach, make the target look rather unrealistic.

"The retailer-led approach will help them cement their position but the bulk of disposable income is in metro cities where e-commerce rules the roost and this is something they will need to actively take into consideration. If Aiwa gains considerable traction using this approach this will make for an interesting case study in parallel with Chinese companies who started with an online-only approach and gained tremendous market share,” said Mohit Yadav, founder of Altinfo,  a business intelligence firm that generates detailed reports on Indian companies