electronics ibef
Post on 06-Apr-2018
230 Views
Preview:
TRANSCRIPT
-
8/2/2019 Electronics Ibef
1/26
www.ibe.org
E L E C T R O N I C SOctober 2007
-
8/2/2019 Electronics Ibef
2/26
ELECTRONICSOctober 2007
Indian Electronics Industry - Highlights
Industry size US$ 25 billion
- Ranked 26th in the world in sales, 29th in production
Growing at over 25 % CAGR
- expected to reach US$ 158 billion by 2015
Low penetration levels
The industry is one o the astest growing in India,
driven by growth in key sectors such as IT, Consumer
Electronics and Telecom
-
8/2/2019 Electronics Ibef
3/26
ELECTRONICSOctober 2007
Low penetration levels o user industries indicate
potential or continued growth in the sector
Low penetration across segments and user industries
Source: Marketing White book 2005, NCAER
White goods
Reregirator
PC
CTV
Cars
0 50 100 150 200 250 300 350
319
161
0.8
213
50.2
per 1000 households
Steady and Sustained growth
Source: www.mit.gov.in
Year
2006-07
2000-01
0 5 10 15 25 30
25.0
6.0
20
US$ billion
CAGR 26%
The demand or electronics is expected to be
uelled by the growth o
- Telecommunications (250 million subscribers
by 2007)
- PCs and notebooks (5 million every year)
- Broadband connectivity reaching rural areas
(600,000 knowledge centers by 2007)
-
8/2/2019 Electronics Ibef
4/26
ELECTRONICSOctober 2007
Exports have also been posting strong growth across segments
Electronic exports have seen a healthy CAGR
o 15% over the period 2000-06
Electronic components contributed the major
share to exports at nearly 40%
A key actor driving exports has been the
increasing trend o contract manuacturing
Electronic Exports 2000-06
Source: www.elcina.com. Indian Electronics industry overview.
n Electronic Components n Communication and Broadcasting Equipments
n Computers nIndustrial Electronics n Consumer Electronics
2005-06
2004-05
2003-04
0 500 1000 1500 2000 2500 3000 40003500
2001-02
2002-03
2000-01
INR Crores
-
8/2/2019 Electronics Ibef
5/26
ELECTRONICSOctober 2007
Several MNCs have been looking at setting up contract
manuacturing acilities in India
175,000-square-oot acility located
in Ranjangaon, near Pune, in the state
o Maharashtra
Printed circuit board, enclosure integration and
distribution and repair services with in-region designservices support
To serve the consumer, instrumentation, networking,
peripherals and telecommunications industries
-
8/2/2019 Electronics Ibef
6/26
ELECTRONICSOctober 2007
Several MNCs have been looking at setting up contract
manuacturing acilities in India
Acquired three design-centric
companies Hughes Sotware Systems,
DeccaNet and FutureSot and consolidated the
sotware companies into a new subsidiary based
in India
Higher-value, higher-margin design services or
cell phone and telecom/networking sotware
Nokia and Alcatel are among the existing
customers
Also maintains an ongoing investment in
Celetronix, one o the largest electronics
equipment manuacturers in India
-
8/2/2019 Electronics Ibef
7/26
ELECTRONICSOctober 2007
Several MNCs have been looking at setting up contract
manuacturing acilities in India
Manuactures 4 to 6 million handsets per year, ast
measuring up to its client Nokias plant in China
that manuactures 35 million handsets per year
Indian players such as TVS Electronics and D-Link
are also established in this domain
-
8/2/2019 Electronics Ibef
8/26
ELECTRONICSOctober 2007
The Government has played a supporting role in enabling
the industry to realise the potential
Key policy initiatives include:
Customs duty on ITA-1 items (217 items) has
been abolished rom March 2005
Excise duty on computers has been removed.
Microprocessors, Hard Disc Drives, Floppy DiscDrives and CD ROM Drives exempt rom excise
duty
100 % oreign equity participation is permissible
Robust IP act to acilitate innovation, growth as
well as development in the sector
As a result o market orces and policy support,all segments o the industry have been growing
Source: KPMG Research
-
8/2/2019 Electronics Ibef
9/26
Overall, the sector presents attractive opportunities
or investment and growth
HIGH
MEDIUM
LOW
Threat of New Entrants
Many MNCs are already present
and well established
Requires investment in localisation,distribution reach
High growth potential could attract
new entrants
ELECTRONICSOctober 2007
-
8/2/2019 Electronics Ibef
10/26
Overall, the sector presents attractive opportunities
or investment and growth
Supplier Power
Adequate supplier base
Most suppliers are small in scale and
size as compared to manuacturers
Competitive Rivalry
Well established, strong players
Brand, cost and distribution are
key dierentiators
Ample opportunities or growth
ELECTRONICSOctober 2007
-
8/2/2019 Electronics Ibef
11/26
The sector is competitive and investors need to have the
right approach and ocus to succeed
Customer Power
Wide choice o products
Well inormed, increasingly
demanding customers
Low penetration levels, large
untapped market
Threat of Substitutes
No substitutes currently or products
in the sector
ELECTRONICSOctober 2007
Source: KPMG Research
-
8/2/2019 Electronics Ibef
12/26
ELECTRONICSOctober 2007
Consumer Electronics sector is the key segment driving growth
Consumer Electronics, Components and
Computer Hardware appear the most attractive
segments or investment, in terms o size
and growth
Size: 2006-07,
Source: www.elcina.com, Indian Electronics industry overview.
n Consumer Electronics - 7.5 n Electronics Components - 5.2
n Communication & Broadcasting - 2.0 n Strategic Components - 0.7
n Industrial Electronics - 1.4 n Computer Hardware - 2.4
39%
27%
10%
4%
7%13%
US$ billions
-
8/2/2019 Electronics Ibef
13/26
ELECTRONICSOctober 2007
Consumer Electronics sector is the key segment driving growth
CAGR: 2000-07
Source: www.elcina.com. Indian Electronics industry overview.
Computer Hardware
20% 25%
20%
18%
11%
8%
15%10%5%0%
15%
5%
Consumer Electronics
Electronic Components
Communication & Broadcasting
Strategic Components
Industrial Electronics
-
8/2/2019 Electronics Ibef
14/26
ELECTRONICSOctober 2007
Attractive States or Investments
Andhra Pradesh and Punjab appear
attractive locations or the sector, based
on the ollowing actors
Key Parameters Andhra
Pradesh
Punjab Orissa Chattisgarh West
Bengal
Attractiveness o
actor conditions
(labour, materials)
High High Moderate Moderate High
Attractiveness
o support
inrastructure
High High High High Moderate
Speciic Government
Incentives
High High High Moderate Moderate
Overall
Attractiveness
High High Moderate Moderate Moderate
Source: KPMG Research
-
8/2/2019 Electronics Ibef
15/26
ELECTRONICSOctober 2007
Brie Case Studies o Successul MNCs LG Electronics
Established in 1997, LG Electronics India (LGEI)
is a wholly-owned subsidiary o LG Electronics,
South Korea. It is one o the leading companies
in consumer electronics, home appliances and
computer peripherals in India
Key Success Factors
Innovative marketing - LG was the rst brand to
enter cricket in a big way, by sponsoring the 1999
World Cup and ollowed it up in 2003 as well.
Local and ecient manuacturing to reduce cost
- To overcome high import duties, LG manuactures
PC monitors and rerigerators in India at its
manuacturing acility at Noida, Delhi. Commissioned contract manuacturing at Mohali,
Kolkata and Bhopal or CTVs
-
8/2/2019 Electronics Ibef
16/26
ELECTRONICSOctober 2007
Brie Case Studies o Successul MNCs LG Electronics
Product localisation - Product localisation is a key
strategy used by LG. It came out with Hindi and
regional language menus on its TV.
Regional distribution model - This has resulted in
quicker rotation o stocks and better penetration
into the B, C and D class markets.
Leveraging Indias IT advantage - LG Electronics has
awarded a contract to develop IT solutions to LG
Sot India (LGSI). The project involves development
and support or ERP, SCM, CRM and IT-enabled
services or LG
-
8/2/2019 Electronics Ibef
17/26
ELECTRONICSOctober 2007
Brie Case Studies o Successul MNCs Phillips
Philips India has grown to over 4,500 employees
in 2003 with a turnover o over US$ 333 million. Philips
India is a leader in lighting, semiconductors, consumer
electronics, medical systems, domestic appliances and
personal care
Key Success Factors
Effective Localisation of Global products -
Recognising dierent cultural and liestyle needs
and customising products and technologies or
the people who buy them. For example, when
the audio equipment worldwide shited to CD
systems, Philips India developed a combined tape
recorder and CD player since both media were
prevalent in the country.
-
8/2/2019 Electronics Ibef
18/26
ELECTRONICSOctober 2007
Brie Case Studies o Successul MNCs Phillips
Global technology support - Brought latest
technologies such as integrated wireless FM Radio
sets, digital widescreen TVs, high-denition rear
projection TVs with DVD, amongst several others
to the Indian consumer.
Tapping rural India - Has specially designed
products specically targeted at the semi-urban andrural consumer in India. For example, as power supply
in rural India is erratic, Philips has customised its
televisions to work on a voltage range o 90 volts
to 270 volts
Enhancing distribution - High penetration levels
in the rural and semi urban areas
-
8/2/2019 Electronics Ibef
19/26
ELECTRONICSOctober 2007
Key take-aways or potential investors
Indias Electronics sector presents several
attractive options or growth
Consumer electronics, Components and
Computer Hardware are attractive segments
oering both size and growth potential
Contract Manuacturing is an emerging option,
especially or exports out o India
In terms o location, Andhra Pradesh and Punjab
could be attractive options
Addressing the Indian market would require:
- The right technology and cost
- Good understanding o local markets and
product customisation to suit local needs
- Distribution and reach
-
8/2/2019 Electronics Ibef
20/26
ELECTRONICSOctober 2007
Appendix Proles o key players
Philips
Philips India Limited (PIL) is a leader in lighting,
consumer electronics, semiconductors, domestic
appliances and personal care with an unmatched
range o products backed by superior design and
technology. PIL also has an excellent distribution
and ater-sales service network. Philips has a planteach in Thane, Pune, Loni-Kalbhor, Mohali, Baroda and
three plants in Kolkata.
-
8/2/2019 Electronics Ibef
21/26
ELECTRONICSOctober 2007
Appendix Proles o key players
Videocon International Ltd.
In 1985, through a technical tie-up with Toshiba
Corporation o Japan, Videocon International
Limited launched Indias rst world class Color
Television. Today, Videocon International Ltd., the
fagship company o the Videocon Group, is Indias
leading manuacturer o Consumer electronicproducts.
Videocon is now a global player, the rst Indian
company to win the prestigious CE approval or
exporting its Color TV to Europe. Videocon is
now entering world market with its operations
in the Middle East, Europe, Indonesia and
South Arica.
-
8/2/2019 Electronics Ibef
22/26
ELECTRONICSOctober 2007
Appendix Proles o key players
MIRC Electronics
MIRC makes and markets the Onida brand o
products. Today, apart rom being a leading player
in the CTV market, it also manuactures other
household appliances including air-conditioners,
washing machines, DVDs, plasma television and
home theatre systems. For oce use, Onida hasalso introduced state-o-the-art multi-media
presentation products
-
8/2/2019 Electronics Ibef
23/26
ELECTRONICSOctober 2007
Appendix Proles o key players
HCL Infosystems Ltd.
HCL Inosystems manuactures and markets
personal computers, PC servers and RISC/UNIX
servers. It oers IT consulting, technology
integration services, turnkey sotware
development and unctional consulting and
implementation services or Enterprise ResourcePlanning. The company made a net prot o US$
70 million with revenues o US$ 2628 million
in 2005.
-
8/2/2019 Electronics Ibef
24/26
ELECTRONICSOctober 2007
Appendix Proles o key players
Samsung
Samsung India Electronics Ltd., a subsidiary o the
US$56 billion Samsung Electronics Co. Ltd., has
been operating in India since 1995. It is a leading
provider o high tech consumer electronics, home
appliance, IT and telecom products in the country.
Samsung India has set up manuacturing acilitiesor color televisions, microwave ovens, washing
machines, airconditioners, color monitors and
more recently, rerigerators in the country.
It has a plant in Noida. The revenue or 2005 was
US$ 1086 million.
-
8/2/2019 Electronics Ibef
25/26
ELECTRONICSOctober 2007
Appendix Proles o key players
Solectron
Solectron Centum Electronics Limited is the
leading Indian company oering state o art
solutions or Frequency Control Products (FCP),
Electronic Manuacturing Service (EMS) and
Hybrid Micro Circuits (HMC). Solectron has a
manuacturing unit and design center in Bangaloreand a post manuacturing center in Mumbai.
The EMS operation ocuses primarily on the
domestic market. For the year 2006 the revenue
was US$ 19 million
-
8/2/2019 Electronics Ibef
26/26
ELECTRONICSOctober 2007
This presentation has been prepared jointly by the India Brand
Equity Foundation (IBEF) and KPMG Advisory Services Private
Limited (Author).
All rights reserved. All copyright in this presentation and related
works is owned by IBEF and the Author. The same may not be
reproduced, wholly or in part in any material orm (including
photocopying or storing it in any medium by electronic
means and whether or not transiently or incidentally to someother use o this presentation), modied or in any manner
communicated to any third party except with the written
approval o IBEF.
This presentation is or inormation purposes only. While due
care has been taken during the compilation o this presentation
to ensure that the inormation is accurate to the best o the
Authors and IBEFs knowledge and belie, the content is not
to be construed in any manner whatsoever as a substitute or
proessional advice.
The Author and IBEF neither recommend or endorse any
specic products or services that may have been mentioned
in this presentation and nor do they assume any liability or
responsibility or the outcome o decisions taken as a result o
any reliance placed in this presentation.
Neither the Author nor IBEF shall be liable or any direct or
indirect damages that may arise due to any act or omission
on the part o the user due to any reliance placed or guidance
taken rom any portion o this presentation.
DISCLAIMER
www.ibe.org
top related