High-end durables in vogue

If you are are shopping for new models of consumer durables at lower price points, you are unlikely to find many options. That's because most companies are rushing to launch high-end products like LCD TVs, sophisticated mobile phones, DVDs and music systems.

Sony India recently launched Sony Vaio notebooks starting at Rs 54,990. Samsung showcased ten LCD TV models in the range of Rs 21,000 to Rs 5,00,000 and seven flat TV models from Rs 10,500 to Rs 20,000. It will launch three more flat TV models this month.

Market leader LG Electronics is also planning to launch high-end mobile phones and top-end LCD TVs. Even Chinese brands are steering clear of the "affordable" image. Of the 18 models launched by TCL in recent times, 13 were in the high-end segment.

Companies believe that this sudden spurt in the high-end segment is because the market has the potential to grow, especially in tier-I cities.

"In the metros, the trend is for consumers to buy to upgrade the equipment they have," said Sandeep Tiwari, LG marketing head.

Mushrooming of retail stores like Croma, E Zone and Reliance Digital have also aided the growth of the high-end segment. "These stores allow the consumer to feel the product. They offer consumers an experience that is unmatched and which is significant in decision-making," said Gunjan Srivastava, director, entertainment solutions, consumer electronics, Philips Electronics India.

Industry experts suggest that as far as the low-end products are concerned, profit margins are under pressure, forcing companies to look for volumes. "Profit margins are under scrutiny for both companies and dealers," said an industry source.

Companies are looking at increasing their volumes in tier-II and tier-III cities. Samsung is undertaking a series of roadshows in tier-II and tier-III cities to enhance visibility and awareness in these cities. TCL is hoping to cash in on the festival season through special schemes and discounts.

According to R Zutshi, deputy managing director, Samsung India, "There are a lot of new products and much technology introduction happening at the top-end as consumer awareness and interest in these categories are growing."

Ajit Joshi, CEO and managing director, Croma, believes that there are other factors driving the sale at the top-end of the market. "With easy finance options available, the younger generation can now consider buying high-end products. Also, in a city like Mumbai, there's a lot of upgradation taking place as far as consumer durables are concerned."