To justify its claim of market leadership, Daewoo’s distributor in Nepal, Him Electronics (a company of Golchha Organization) differentiates the market into three categories: premium, value-for-money, and cheap. It accepts Sony as the undisputed leader in the premium segment, but claims itself to be the leader in the value-for-money segment, in which the competing brands include Sony (imported from India and China), LG, Samsung, KEC and Videocon (see box). Of the total CTV market, 15% is in the premium segment and 61% in the value-for-money segment. The rest, 24% belongs to cheap segment in which Chinese products capture about 97%, according to one estimate.

Talking in over-all terms, Sony’s market share is estimated only around 15%. LG’s distributor in Nepal, GoldStar (Nepal) Ind. Pvt. Ltd. (a company of Chaudhary Group) claims its brand to be the leader in the overall CTV market. Citing data for 1997/98, it claims 35% of the market is captured by LG, leaving 30% to Daewoo and 10% to Samsung. But in 1998/99, LG’s market share fell sharply down to 30.4% with total sales only 8,400 units, according to GoldStar sources. This is a phenomenon that can be attributed to Daewoo’s aggressive marketing that year. Golchha Organisation’s another company, Hansaraj Hulaschand and Co. (P) Ltd. that deals in Kawasaki Bajaj brand of motorcycles, gave away a 14" Daewoo CTV as bonus for every purchase of its motorcycle. This way, the company sold 1300 units of the bikes that year and gave away an equal number of TVs. "In total, 13,000 units of Daewoo CTV were sold last year", says Shekhar Golchha, Director of Golchha Organization. Realizing the dent on its market share from the competitor’s aggressive marketing drive, LG too started a couple of months back its own marketing drive which is equally aggressive to, if not more than, that of Daewoo.

It launched a whole range of new models with distinguishing features like flat screen, hired the service of a multinational ad agency and went on an advertisement campaign projecting itself as a premium product, which is fairly priced. And the target is 41.6% of market in 1999/2000 from the then existing share of only 35%, according to GoldStar Nepal sources.

Shekhar Golchha

To gain a leadership position in the total CTV market and maintain that for the long-term is however not easy, as GoldStar Nepal seems to be have realised. Therefore, the company is highlighting in its advertisement drive some major strengths of its brand. It is projecting itself as a global brand that is globally active at present and doing well in other countries. The DIGITAL EZ LG ads that are being given all over the media - print, electronic and outdoor - are the same that are being used in all the South Asia region. This is particularly impressing to the upper end segment of TV buyers who keep on touring these countries for one reason or the other. Seeing the same ad wherever one goes, helps in improving brand recall. One of the reasons for gradual decline in the LG's market share in Nepal over

Relative Strength of CTV Brands

Brand Local Manufacturing Assembling Servicing facilities Distributors throughout Nepal Sony No Kathmandu 20 LG Goldstar Nepal (P) Pvt. Kathmandu, Pokhara, Biratnagar, Narayanghat 44 Daewoo Him Electronics (P) Ltd. Kathmandu, Biratnagar, Birgunj, Bhairahawa, Pokhara, Nepalganj   41 Samsung No Kathmandu 18 KEC Alankar Electronics (P) Ltd. Kathmandu and only two outside 26 Philips No Kathmandu NA

Growth of the CTV Market in Nepal Year % Increase 51/52 (94/95) 52/53 (95/96) 53/54 (96/97) 54/55 (97/98) 55/56 (98/99) 56/57 (1999/2000) -- 16.6% 14.2% 25% 15% 25%

Source : Various brand dealers

the last few years is said to be the gradual loss of LG's brand recall. It was in part due to the change of the product's brand name into LG from GoldStar, while the company name of the local assembler remained unchanged - GoldStar (Nepal) Pvt. Ltd.

Dilip Batra

Meanwhile, Syakar Company Ltd., a trading company of Jyoti Group of industrial and business house started advertising about Philips brand that it began to import from Singapore. And Samsung’s dealer Ashok Trading Concern gave an ad comparing the prices of its brand with those of LG and Philips and showing Samsung’s price competitiveness. Him Electronics on its part, launched a wide range of B/W TVs manufactured locally. All these activities took place just about a month before the 8th SAF Games were to start.

 

GoldStar sources claim that its latest drive has aroused ‘tremendous positive response’ from the market but declined to give the sales figures. "Our market has suddenly woken up", says Dilip Batra, Vice-Chairman (marketing) of Chaudhary Group. These developments seem to have prompted Him Electronics to come out with yet another round of aggressive marketing drive to prop up sales of Daewoo. Hence, the Mega Millennium Dhamaka, market watchers think. However, Golchha, claims, LG’s efforts have not made any dent in Daewoo’s sales. "Month of October shows a record sales figure for Daewoo", he says to support his claim. "And, LG's and ours are different category products. Ours is value-for-money market, theirs is premium", he adds.

Ashok K. Agrawal

Daewoo’s ‘Dhamaka’ this time offers a Nikon brand of camera for every purchase of Daewoo TV, and lucky coupons for Kawasaki Bajaj Caliber bike, Videocon washing machines and Usha water filter. Whether the attraction of winning the prizes from a lucky draw will be enough to boost the sales of a consumer durable item, may be a debatable point. But the main attraction in Daewoo brand this time is the offer of a substantially economical CTV. Its 14" CTV (model 1483) is retailed at only Rs. 12,980 inclusive of VAT. Moreover, the guarantee period is extended to 36 months from the previously allowed 30. The target for the year 1999-2000 for Daewoo, according to Shekhar Golchha, is to sell 15,000 units and to gain 80% market share in Value-for-Money segment.

CTV Selling Pionts

Tecnological Novelties Brands

Flat Screen multi Picture Function (picture-in-picture) Doubl Screen (Two TV channels sinultaneously) Vision Plus (More vision per inch of screen) Child Lock Multi Language OSD Philips, Sony, Samsung, LG Samsung, Philips Samsung Samsung Philips, Sony, LG, Daewoo Daewoo, LG Based on what they have hilighted in their ads and brochures One special feature of Nepal’s CTV market so far is that it finds only two of the big business houses in the country - Chaudhary Group and Golchha Organization - as the rivals. Both have tremendous resources in their disposal to utilize for the promotion of their respective brands. And they have the largest distribution network throughout the country in comparison to the other competitors (See Box). They also have their own manufacturing/assembling facilities. Moreover, they both are manufacturing and marketing B/W TVs also. This way, they have the advantage of penetrating into even the lowest market segments so as to gain big sales volume. Similarly, in after-sales service too, they are the leaders over the others. Planned expansion of Philips market penetration is expected to change the situation, as Philips has the backing of another equally, if not more strong, business house - Jyoti Group - that already has a nationwide network of its own for various other products, which can easily be used for TVs also. Brands that have their own assembling facilities locally have also the cost advantage in their favor, points out Ashok Kumar Agarwal, who is the distributor of Samsung in Nepal. If the customs tariff for imported CTV is 40%, the assemblers have to pay only 25% on the components, Agarwal says.

Market Share in CTVs Nepal Within Kathmandu Outside Kathmandu Total volume Sony 50% Not mentioned Not mentioned Not mentioned Daewoo 44% Not mentioned Not mentioned 24,000 units LG 35% 37% 33% 23,000 units Based on the claims of respective companies (reference year 1998/99)

 

Puran Rana

While the other CTV dealers pin their hopes on switchovers from B/W users, Him Electronics is going extensively in B/W segment also.The objective is to create the market, and also to win over the customers who would otherwise go for the cheap Chinese and Indian B/W TVs that get into the country through legal or illegal channels.

 

Launching a range of Himstar brand B/W TVs before the 8th SAF Games, Golchha’s company was targeting to sell 24,000 sets this year in the 50,000 sets per annum market. Even before embarking in the Himstar plan, Golchha had been importing (and they are doing it even now) Videocon B/W TVs from India. When the demand for such TVs of a good quality was confirmed to be there, they came up with Himstar range specifically aimed at the customers in rural areas. As these people have to depend on alternate energy sources for operating TVs, Himstar products are designed to consume very low electricity and the price also is kept at suitable level - upwards from Rs 3,300 - to make it affordable for them, says Golchha.