Business Today

Southern Comfort

Dream destination: Markets down south.

By Shamni Pande | Print Edition: July 15, 2007

South of the Vindhyas is turning out to be the dream destination for every consumer durables company in the country. "Traditionally, the gap between markets in the south and the north has been quite high. However, this has narrowed and the southern market is now showing a very strong demand for tech-oriented consumer durables like flat TVS, LCD TVs and split ACs," says R. Zutshi, Deputy MD, Samsung India Electronics.

The region accounted for 37 per cent of the sales of its flat CTVs in the January-May 2007 period; the north and the west accounted for 27 per cent and 21 per cent, respectively, while the east accounted for the rest. At rival LG Electronics India, too, the south has overtaken the north as its most important market-the region accounted for 33 per cent of sales during the January-May 2007 period compared to 32 per cent in the north and 22 per cent in the west.

Says Girish V. Rao, VP (Sales and Marketing), LGEIL: "Southern and western consumers have shown a preference for premium products. Also, they are more technology-focussed and have high disposable incomes. Thus, the region is a major growth driver for all products."

The story is the same at Videocon. Says Sunil Mehta, Jt President, Videocon Industries: "The southern markets have higher value realisations. The north, on the other hand, has seen volumes growth. Also, penetration in the south has improved following the Tamil Nadu government's decision to distribute free television sets."

Another reason for the spike in sales is the presence of retail infrastructure. "Organised retail chains such as Viveks, Jainsons and others have a far greater presence here than elsewhere," says Anoop Kumar, President, CEAMA (Consumer Electronics & Appliances Manufacturers Association).

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