Indians said that if they do not accelerate development, Shanghai will exceed Mumbai. Generally, Chinese people’s impressions of India are mostly overcrowded trains, ghastly slums and Indian films that sing and dance. It’s an impression that the two peoples are absolutely denied.
This also shows that there is not enough private exchanges between the two countries and there is a lack of understanding between them. They all remain in the impression many years ago. It is time to refresh our understanding and deepen our understanding. We are all not the same as before.
A few days ago, China National Grid Reporter followed the China Electric Household Appliances Association’s Expert Committee on Electric Water Heaters to conduct a field trip to India’s home appliance market, from Mumbai to Delhi, from manufacturers to channels, from foreign agencies to local chambers of commerce, Let's take a look at what today India means for Chinese home appliance companies.
Is the elephant dancing?
Compared with the total land area, India is the seventh largest country in the world and its population is comparable to that of China. According to the data from the IMF, India’s GDP in 2016 was US$225.6 billion, ranking seventh in the world. India has become the world’s fastest growing economy for the first time. Great power.
In May 2014, Modi took office as India's fifteenth Prime Minister. As a 'realist', Modi launched a series of reforms to promote the economic development of India after he took office. For example, streamlining government agencies and promoting e-commerce administration has greatly increased Administrative efficiency; the implementation of the Product and Services Tax (GST) in April 2017 unified India's tax system, reduced transaction costs, facilitated the circulation of various production factors and the integration of the Indian market, and increased the construction of infrastructure. Inputs, especially in the fields of power and transportation; further opening up areas for foreign investment access and shareholdings, and some areas have allowed 100% of foreign investment to increase the attractiveness of foreign investment.
Indian Prime Minister Modi
Earlier this year, foreign media reported that New Delhi announced economic data for the third quarter of fiscal year 2017, which has reached an annualized GDP growth rate of 7.2%, which has exceeded the level of China's same period. No matter what statistical data is accurate Sex, India's economy has indeed developed faster than in the past.
The change in India has also been recognized by investors. Song Yujun, vice president of the Haier Appliances Industry Group and director of the South Asia Region, believes that India has changed greatly in recent years. The Modi government has made great efforts to attract investment and the investment environment has also improved. Infrastructure is also improving, promising investment prospects.
Household appliances consumption is starting
According to the data provided by the China Council for the Promotion of Chinese Culture and Economy (ICEC), only 40% of households in India have television sets, 29% of households have refrigerators, 11% of households have washing machines, and 6% of households have computers or laptops. To 4% of households have air-conditioning. The overall size of the consumer durables market (including home appliances and consumer electronics, excluding mobile phones) in 2017 will be 1 trillion rupees (approximately $15.5 billion).
From the perspective of product structure, India’s home appliance market has its regional characteristics. In India’s home appliance chain stores, there are window air conditioners, single door refrigerators, two-cylinder washing machines, inverter air conditioners, double door refrigerators, large capacity drum washing machines, The price of the product ranges from 8,000 rupees to 300,000 rupees. Due to the large income gap in Indian society, and most of the low- and middle-income families (about 80% of Indian households earn less than 4,000 US dollars annually), the products are high, medium and low. Yes, with medium and low-end products occupying more than 70% of the market share. From the perspective of sales channels, sales of e-commerce platforms such as Amazon, Flipkart etc. grew rapidly, their share was between 6% and 10%, while offline channels are still Mainstream. According to the staff of the India China Friendship Association, traditional agency distribution channels account for about 60% of offline channels, direct retailers account for 30%, and chain channels account for 10%.
In the Indian market, the order of priority for consumers to purchase home electronics is mobile phones, televisions, refrigerators, washing machines, air conditioners, etc.
Mumbai CROMA Marketplace Millet Phone
The current dominant position in the home appliance market in India is mainly non-Indian foreign-funded enterprises, in the white power field are LG, Samsung, Whirlpool, Siemens, etc. In the consumer electronics fields such as television, Samsung, LG, Panasonic and Sony, etc., in the field of mobile phones Samsung, Apple, Millet, VIVO & OPPO, etc.
CROMA Marketplace in Mumbai, India
The huge potential of the Indian market has also attracted investment from Chinese home appliance companies. As early as 2002, Haier began to try to enter the Indian market. After more than ten years of operation, through localized design, localized manufacturing and localized services, Haier is now in the Indian market. Localized operations have been realized, market share has been gradually expanded, and brand awareness has also been significantly improved. Song Yujun revealed that Haier was ranked among the "Top 50 Most Trusted Brands in India" list in the research report of TrustResearchAdvisory (TRA), an authoritative consulting and research company in India. 19th. The sales of Haier India in 2018 will reach 500 million U.S. dollars.
New Delhi Haier Store
In November 2017, the Haier Industrial Park in Pune, India was put into production. Haier's product range at the local plant will expand from refrigerators to washing machines, air conditioners, water heaters, and televisions.
Midea also attaches great importance to the expansion of the home appliance market in India. In February 2012, Midea and Carrier established a joint venture company in India to carry out the localization of air conditioners. It was leased to a factory in Rewari for renovation. In October of that year, Achieved production and expansion of air conditioners to washing machines and water purifiers in 2016. According to Hu Jianguo, head of CMI, a joint venture between India and India, Midea has established a network covering sales and services in India's four major regions, 2017 Air-conditioning sales in the year increased by 14% year-on-year, and sales growth in 2018 is expected to exceed 20%.
CMI factory visit
Hu Jianguo said that the senior level of the US group attaches great importance to the Indian market and regards India as a key market in Midea's global development strategy. It may become an important production center in the future. It is understood that investing 8 billion rupees in the U.S. factory in Pune It will be put into production at the end of 2018. This new factory will be used to produce products such as refrigerators, washing machines and water appliances.
Risks and opportunities
According to IMF's forecast, the Indian economy is expected to maintain a growth rate of more than 7% by 2020. According to data from the China Council for the Promotion of Chinese Culture and Economy (ICEC), the market size of durable consumer goods in India will reach 3 trillion rupees by 2020. (about 46.5 billion U.S. dollars).
Another statistic shows that India's population under 35 is over 60%. This also means that India has abundant labor resources.
There is a sustained and stable growth of market demand, there are also a large number of cheap labor supply, and there is a high penetration of English, a good location advantage, these resources or advantages all indicate that India has become the capital and potential of the world's factories.
According to the calculation data of relevant agencies, India’s manufacturing output contributed about 17% of GDP in 2016, which is far below the Chinese level.
Indian Prime Minister Modi put forward the development strategy of 'Made in India'. He hoped to use China's experience to push India's manufacturing industry to become bigger.
In order to promote more foreign investment in India to build factories, the Indian government has also made many adjustments in its trade policy, which has significantly increased the import tariffs on electronics and home appliances. Take mobile phone imports as an example. Since July 1, 2017, The new GST tax system requires a 10% tariff on complete machine imports. By December 2017, India raised the import tariff from 10% to 15%. In early February 2018, India announced again that it would increase the import tariff on mobile phones to 20 %, India is on the one hand to protect domestic manufacturing, on the other hand it is also 'forcing' foreign-funded enterprises to invest and build factories in India. According to a report released by the Indian government in early April this year, India has begun to focus on core smartphone parts and components. Printed circuit boards (PCBs), camera modules and connectors are subject to a 10% tariff. India's tariff policy adjustments, in addition to 'attracting' machine companies to invest in India to build factories, will also 'bring' parts companies to India. Factory. According to Indian trade sources, similar policy measures will also be applied to manufacturing industries such as home appliances. Chinese companies want to share the cake of the Indian home appliance market. Is a mandatory option.
According to business figures who have invested in India for many years, India’s laws are sound and complex, and they need to guard against this 'risk'. For example, India currently has about 50 central labor laws and regulations, and more than 170 local labor laws and regulations. Labour laws are very strict on the protection of labor. The Labor Dispute Law of 1947 stipulated that companies with more than 100 employees must obtain the consent of the government when laying off employees. The Labor Contract Law promulgated in 1970 provides that Employees with more than 20 employees must obtain approval from the government before hiring a contract. In addition, the trade union power in India is also very strong. The bureaucratic corruption of local governments is an important factor that needs to be considered and evaluated before the investment.
An Indian head of a Chinese-owned mobile phone brand India Branch stated to the visiting Chinese companies that the Indian market is a price-based market, and users are pursuing cost-effectiveness. He also emphasized that any strategy in India must consider a long-term plan. .
Xu Dongsheng, deputy director of the China Household Electrical Appliances Association, believes that India’s current level of development is equivalent to that of China more than 20 years ago. Chinese home appliance companies share their own development experience in India.
India Gate (also known as Welcome Gate) is one of India's landmark buildings. On the one side is the peaceful Arabian Sea and on the other is the fiery city of Mumbai. This relationship is also projected to Mumbai and even India. Mumbai is India's business and entertainment industry. The capital attracts immigration and wealthy people from all over India. Here is the million-dollar mansion of Mukesh Albany, India’s luxury home, Antilia, which is home to the largest slum in Asia, Dahab; On one side, there is also a tall side; one side is heaven and the other side is hell.
For companies that want to invest in the home appliance market in India, there is a huge opportunity on the one hand and a bigger challenge on the other.