Consumer electronics giant Philips today said it had outsourced its entire TV business, including manufacturing, distribution and selling, to Videocon industries.
“The brand licensing agreement under which Videocon assumes responsibility for the sourcing, distribution, marketing and sales of all Philips’ consumer television activities in India is aimed at bringing the TV business back into profitability from 2010 onwards,” Philips Electronics India Managing Director and CEO Murali Sivaraman said.
He said the agreement was only limited to the TV segment and is for five years.
A few years ago, Philips had entered a similar arrangement with Japanese firm Funai for their TV business in the US, which proved to be very successful, and the company had decided to replicate the idea in India, Sivaraman said.
“Videocon will ensure that consumers of Philips-branded TVs can continue to count on the same premium quality, design and innovation associated with the Philips brand,” he said.
The Netherlands-based company, operating in India for over 80 years, had earlier announced a strategic shift in focus to healthcare and life-style segment to promote its products in the country.
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“Voluntarily, we have taken a position that Philips as company would be working towards projecting itself as a health and wellness company,” Sivaraman had said last year.
The company is now focused more in the lighting and healthcare segment. In lighting, it has 35 per cent market share and it is trying to increase its presence in the healthcare segment.
Over the last few years Philips has been losing its share in the colour TV market in India, which according to an estimate is over 20 million units per annum, to Korean companies such as LG and Samsung.
Videocon officials couldn’t be contacted for comment.
Asked about the boost in sales through this agreement Sivaraman said, “Because of the large sales and distribution network which Videocon has, we expect a significant increase in sale of Philips TVs in India.”