India is actively carrying out reforms to unify the nation's consumption tax and promote urbanization. At present, India’s economy is developing rapidly. However, due to the improvement of infrastructure, the household electrical appliances in urban areas are still low.
India, the world’s second largest populous country adjacent to China, is becoming a hot spot for China’s home appliance giant Nuggets. Unlike in the past, the Chinese home appliance giant, which is going global, has used a new style of play in the Indian market.
First to fly to India
Thunderbird Technologies (hereinafter referred to as Thunderbird), a joint venture between TCL and Tencent, recently launched India's Internet TV brand iFFALCON as its first international station.
In July and August 2017, I went to India for the first time. At that time, I felt that India was very technological and very luxurious. On the other hand, the improvement of the living standard of the residents was still in its infancy. It was like the Chinese in the 1990s. New Delhi (the capital of India The average monthly income per person is 15,000 to 20,000 rupees, about 1,500 to 2,000 yuan.
Thunderbird CEO Guo Jie said on May 30th in an exclusive interview with CBN that India is one of the largest markets in the world. Many Chinese consumer electronics companies such as Xiaomi, Vivo and Midea have already developed their business in China. The brand has accumulated a certain reputation. Moreover, India’s policy of opening up to the outside world and attracting foreign investment is also more favorable than ever. For example, labor laws are more fair to both employers and employees.
Thunderbird’s major shareholder TCL is setting up a new factory in India, not only producing color TVs, but also other consumer electronics products. India imposes higher tariffs on complete machine imports, and if it assembles and manufactures locally, taxes and fees are greatly reduced. This is true for Thunderbirds. A favorable condition.
Of course, TCL's development in India has also gone awkwardly. In 2010, TCL took the opportunity of sponsoring the Guangzhou Asian Games to focus on exploring the Indian market. Later, the transformation of its internationalization business encountered pressure and shrank the front. Secondly, India’s at the time. Labor, channels, higher operating costs, consumer electronics market demand is not so high, about the equivalent of China in the 1980s.
Today's Indian market is more mature. The country currently has a population of about 1.3 billion. In 2016, India's GDP is 2211.2 billion U.S. dollars, and per capita GNI is 1670 U.S. dollars. With favorable demographic and economic factors and an increasingly perfect policy environment, it is expected that By 2020, India's GDP growth rate will remain at 6.5% to 7.5%. By 2020, India's average household income will reach 10,100 US dollars.
The television penetration rate of 183 million households in India reached 64%, of which TV penetration in rural areas was only 52%. 86% of Indian households are still using CRT TVs, and only 14% of households use flat-panel TVs such as LCDs. Inferred that India's smart TV market has great potential in the next 5 to 10 years.
'Today, TCL has increased its investment in India. The first is market orientation. The demand of the Indian people has reached a new level. Just like China’s 90’s in the last century, the per capita monthly income was 1,500 to 2,000 yuan, and the demand for consumer electronics from home was strong. The second is the production of the enterprise. The operating conditions have improved. A large number of Chinese-funded enterprises have entered the Indian market and maintained communication with the local government. ' Guo Yan disclosed that Thunderbird established a wholly-owned subsidiary in India, and in India, the sales channels were adopted by the factory. Joint ventures and cooperation methods.
Different from TCL's previous access from offline channels, Thunderbird chose to sell online, aiming at young people to cut into the Indian market. Guo Yan stated frankly that in the offline market in India, only Chinese brands have OPPO, and Vivo phones have made comparisons. Well, because India's states have different political, cultural, and ethnic groups. Therefore, Thunderbird cuts in from the ground first, and its scale, cost, and efficiency are all more controllable, and it can also provide products that are more competitive on price.
Join BAT's new style of play
In fact, Thunderbird and Flipkart, one of India's largest e-commerce platforms, have established a strategic partnership. Ali, Tencent invested in the two largest e-commerce platforms in India, Tencent invested in FT, which is Strategic investors. Tencent is also a strategic investor and second largest shareholder of Thunderbird.
In the Indian market, TCL cooperated with Ali’s home appliance business platform, which shares with the top global brand Samsung, LG. Guo Xin disclosed that Thunderbird, a subsidiary of TCL Holdings, is targeting the Internet brands such as Xiaomi in the Indian market. , LeTV has also been to the Indian market, but later because of the capital chain storm.
TCL adopts a dual-brand strategy in the Indian market and separates attacks from Thunderbird. Guo Yu said that India's online channels have grown rapidly. Thunderbird has concentrated its online promotion on the domestic market, and NetRed’s V-assistance has been copied to the Indian market. Currently, it has grown rapidly. In April 2018, Thunderbird officially released iFFALCON Internet TV in India. With quality and cost-effectiveness, Thunderbird sold tens of thousands of units in the first week.
In terms of content, Thunderbird's Internet TV content in India is divided into three parts: Global content and Netflix, YouTube cooperation; India localized content, working with local video sites; and Chinese content, Indians starring Bruce Lee, Jackie Chan, etc. Chinese movies also like it very much.
The start was good, but Guo Yan frankly said, 'There are also challenges'. The first is the product, Samsung, LG to bring global products to India sales, but Thunderbird hopes that the product can adapt to the needs of localization; followed by channels, online and offline channels The third is competition. In the past one or two years, the Indian market has grown rapidly, but competition has also intensified.
Japanese and Korean brands have worked in India for many years. Guo Ye believes that Chinese brands must have new styles in the Indian market. With Japanese companies relying on lean manufacturing, Korean companies rely on different screens and chip resources. China has three BATs: Ali, Tencent and Baidu. Internet giants form their own Internet ecology. China's consumer electronics companies can join hands with BAT to break new ground in terms of services and content.
Nuggets India Market
Not only Thunderbird, China's household electrical appliance companies have been enthusiastic about the development of the Indian market in recent years.
According to the data provided by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products to the First Financial Reporter, China’s home appliance exports to India have been accelerating in the last three years. In 2015, China’s home appliance exports to India reached US$1.49 billion, a year-on-year increase. 4.3%; In 2016, this export value increased to US$1.6 billion, an increase of 7.4% year-on-year. In 2017, China’s household electrical appliance exports to India further increased to US$1.84 billion, a year-on-year increase of 15%.
Chinese household appliance giants such as Haier and Midea have all continuously increased their investment in India. In 2017, Qingdao Haier (600690.SH) saw a 40% increase in revenue in the Indian market. That year, India’s Haier Industrial Park went into operation, adding new refrigerators, washing machines, air conditioners, and water heaters. The production capacity of the product is 3.8 million units, which effectively improves the response speed and quickly meets the needs of the local market. Midea Group (000333.SZ) has set up a global R&D center in India and launched India’s “Greenland” project in 2017, further increasing Localization of air conditioners, refrigerators and other home appliances in India.
Chinese home appliance giants have been digging gold in the Indian market for more than a decade. In 2004, Haier entered the Indian market. In 2007, it acquired a local refrigerator factory. In 2017, the industrial park was expanded and put into production. After nearly 20 years of development, Haier’s The business in South Asia has entered the fast track of development. 'Song Yujun, Regional Director of South Asia, said the vice president of Haier Group Appliance Industry Co., Ltd.
'India is a market that can never be ignored.' Zhou Nan, secretary general of the Household Electrical Appliances Subcommittee of the China Chamber of Commerce for Import and Export of Machinery and Electronics, told the First Financial Reporter that India has a population of about 1.3 billion, GDP growth rate is similar to that of China, and its per capita GDP is China. A quarter of the market has great potential.
Moreover, India has escaped the main battlefield of world trade. India is actively carrying out reforms to unify the nation's consumption tax and promote urbanization. At present, India’s economy is developing rapidly. However, because the infrastructure is still being improved, the household electrical appliances held by urban residents remain Low.
But on the other hand, there are also many difficulties in the development of the Indian market. First, India has a federal system, laws and regulations vary from state to state, language communication, and inconsistent logistics are also challenges. Second, Sino-Indian relations have ups and downs. Third, India trade Protectionism, Huawei, and Xiaomi all suffered from losses. Last year, the increase in import tariffs on mobile phones had a greater impact. Therefore, Zhou Nan believes that exploring the Indian market should not be blindly optimistic. Development cannot be underestimated.
Compared with previous booms, the background of this round of Chinese home appliance companies developing the Indian market is the Sino-US trade friction. The internationalization of Chinese companies hopes to realize the diversification of overseas markets. Second, the policy environment of India is improving and foreign companies are encouraged. Investment and establishment of factories, a unified tax code, construction of highways, and improvement of infrastructure; Third, China's large-scale integrated appliance group has entered a stage of globalization.
In Zhou Nan’s view, it is now the third round of development boom for Chinese home appliance companies to enter the Indian market. The first round is to sell products. The second round is to invest and set up factories. The third round is to develop in a global, diversified manner. The Indian market is more comprehensive.