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issue: May 2006 APPLIANCE Magazine

New Delhi Report
Indians Prefer Foreign Appliances


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by Adite Chatterjee, India Correspondent

Fifteen years ago, Indian consumers generally favored foreign-made products, and any consumer product with a Made in India tag might be considered inferior and of poor quality.

It’s a transformation that few would have believed possible. Fifteen years ago, Indian consumers generally favored foreign-made products, and any consumer product with a Made in India tag might be considered inferior and of poor quality. Imported products were in great demand and any Indian returning from a trip to the U.S. or Europe would be sure to bring back electronic items and appliances. The Imported tag was also considered necessary for enhancing social status and prestige.
The economic reforms initiated by the government in the early 1990s have done much to boost the Indian economy, and it seems they have also transformed Indian consumer perceptions about Made in India. According to a new Asia-Pacific region consumer study by Grey Global and Millward Brown, Indian consumers now have a high degree of confidence in their local brands compared to consumers in Korea—home to brands like Samsung, LG and Hyundai—and Japanese consumers. Nearly 81 percent of Indians feel that Indian brands, in most product segments, are world-class, compared to the Asia-Pacific average of 68 percent. In fact, Indians were only a notch behind New Zealand and Australian consumers in their belief that their brands are on par with global brands. In China and Japan, in contrast, less than 50 percent of the respondents believe their local brands match global standards.
The appliance market in India, however, seems to buck the trend. The market in India is dominated by foreign brands. Korean brands, followed by American brands like Whirlpool, have replaced once-popular Indian names Onida, BPL, Voltas, Kelvinator, and Godrej as brand leaders. Only India’s Videocon is perceived to be competitive with foreign brands.
The problem with Indian appliances brands seems to be the perception that they have not delivered innovative products. Korean brands, in contrast, performed much better on this score while offering value-for-money products, and this has earned them the confidence of Indian consumers.
Further, Indian appliance producers have not focused on harnessing the power of their brands by targeting smaller town markets and lower price points. At one time Indian appliance makers like Sumeet and other local brands garnered sales volume through bargains, discounts and exchange offers. When Chinese players entered the market with competitively priced products, due to their extremely low production costs, the Indian players lost ground here as well. The only appliance segment in which Indian brands continue to steadfastly rule the market is mixer-grinders/food processors, where Indian products are designed to meet unique Indian kitchen needs.
Recognizing the fact that Indian brands need a wider product portfolio, Godrej, a traditional home appliance manufacturer, is making a foray into production of color TVs and DVD players. Mirc Electronics, a maker of Onida brand TVs, has moved into appliances with its washing machines and air-conditioners. Perhaps they are hoping to duplicate the success of Korean brands, which flooded the Indian market with a wide range of products, but it remains to be seen if Indian brands in the appliance segment will win back the confidence of Indian consumers.

 

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