It had changed the Indian television market in the nineties with price play. Japanese consumer electronics giant AKAI, which can be termed the original price warrior, is once again banking on pricing by offering 19 inch LED television for Rs 10,490.
In the nineties, AKAI offered a 14 inch colour TV free to every buyer of 24 inch TVs. That certainly was a hit with mass market consumers, giving sleepless nights to rivals, making AKAI a household name, especially in the urban and semi-urban India.
But the brand could not maintain the pace. In the late nineties, it had to give way to competitors, especially to the Korean rivals — Samsung and LG.
“The game was different. Videocon, which was another price player in the mass market segment, bought the marketing licence of AKAI in 1999, just to ensure that the brand was killed. It helped the Dhoots, who owns Videocon, to keep their own brand alive without competition that could play a pricing game,” said an industry source.
AKAI entered India with Baron International, owned by Mulchandanis, and captured a 20 per cent market share in the TV market within the first few years. “Till 1997-98, it maintained that market share. But Videocon did not market the product properly, and the market share came down to around 2 per cent by the time AKAI snapped ties with Dhoots in September 2009.
In its third effort to re-establish the brand in India, AKAI had tied knots with Global Brands Enterprise Solutions Pvt Ltd in January 2010, to sell products in India, Sri Lanka, Bangladesh and Nepal.
“We still have a better brand recall in the mass market. We would certainly capitalise on that. But, we would also offer premium products at a much cheaper price. The pricing is possible because of AKAI’s lean operating structure that entails less cost in manufacturing,” says managing director Pranay Dhabai. Products will be cheaper by around 8-10 per cent, but the company claims quality will be on a par with competitors. “We would offer something more,” he said.
The company has not done any marketing since the third homecoming. “We believe that our products and service will determine how successful we are,” says Dhabhai.
The earlier distribution and service providers were “loyal” to Videocon, and the company had to re-build the entire network of distribution once again. “After sales service was certainly an issue, and product portfolio was limited. During the past two years, we have established the service network with 650 centres. It would be increased to 1,000 by end of 2013. Now is the time to ramp up product offering,” says Dhabhai.
With very ‘limited’ push, AKAI has already captured a four per cent market share in India. It targets to have a six to seven per cent market share in TVs by 2014-15 that could translate into Rs 500-crore revenue. Of this, about four per cent would be spent on promotions and advertisements.
“We had to start from scratch. In 2011-12, we had sales of Rs 175 crore. The target is to cross Rs 250 crore this fiscal year,” says Dhabhai.
LED is the focus, as the market is moving towards that. “Companies are still selling LCD TVs as they have invested a lot in LCDs. In a few years, LEDs will replace LCDs, and LEDs would be sold at almost same price of LCDs,” he adds. Starting from Rs 10,490 for 19 inch LED models, AKAI would sell 46 inch LED TVs at Rs 69,990 for the top version.
LG, one of its rivals, sell 47 inch LED TVs at Rs 47,000 to Rs 134,000, according to its website.
AKAI sells LCD TVs between Rs 7490 (15 inch) and Rs 31,990 (40 inch).
Not only this, AKAI is banking on smart boxes, priced at Rs 6,590, which could turn any TV to a smart TV. “The product is compatible with both 3G and 2G SIM cards, and we have kept the option open for making it 4G-compatible. Our message to consumer is: take a PC home at Rs 6,590. It’s a family product. This is going to be a game changer for us being a first mover,” says Dhabhai. AKAI hopes to sell more than 100,000 smart boxes in the next three to four months, accounting for about 20 per cent of the company’s annual revenue.
Almost similar to Apple TV, AKAI smart box allows access to videos, games, websites through wi-fi or broadband connection, besides 3G/2G dongles, and could also act as a router to connect with other devices like tablets, laptops and smart phones. Google also had said that it would launch set-top box Google TV soon. In June, Amkette launched EvoTV for Rs 9,995.
Besides the tier-II and tier-II cities, where AKAI already has a strong brand recall, the company will push products in larger cities, primarily through organised retail chains, Dhabai says. It is already in talks with Reliance Retail, Tata’s Chroma, Spencer’s and Wal-Mart stores across the country.
However, AKAI will continue to sell CRT TVs, mainly in the rural areas. Last year, it sold 450,000 CRT TVs, and about 125,000 LCD and LED TVs.
AKAI has no immediate plan to start manufacturing in India and will continue to import the entire range from China.
AKAI, which also started selling mobile handsets in India, plans to launch smartphones by the end of this year. AKAI, which earns about 80 per cent from TVs, expects other consumer products such as audio systems, refrigerators, home appliances mobile phones and washing machines to contribute about 25 per cent of annual revenue in the next few years.
However, the focus will always be TVs, says Dhabhai.
