A strong 25 per cent growth in demand for smart televisions in India fuelled overall industry growth by 15 per cent in 2019 to a record 15 million units per annum, market research firm Counterpoint said on Tuesday.
In contrast, the non-smart TV segment grew by a much sombre 7 per cent during the year. While Samsung retained its overall lead in the industry, its hold at the top is weakening largely due to its relatively weak position in the smart TV segment where it lags behind Xiaomi and LG.
"The growing number of smartphone users in India is also driving a need for Smart TV as users look to continue their streaming content consumption on the bigger screens when at home. The broader broadband penetration in the home will further drive the overall smart TV usage," said Karan Chauhan, senior analyst, Counterpoint Research. "Though affordability and value for money are the key growth drivers. The new crop of brands such as Xiaomi, TCL and others are tapping their existing relationships with e-commerce channels such as Flipkart, Amazon, etc to successfully distribute the TVs affordably with a direct-to-consumer model. India is one of the largest markets in the world with more than 200 million potential TV households and is still underpenetrated which makes India a more attractive growth market for the entire TV and content value chain."
Most of the big players including Samsung and LG recorded a decline in sales in the non-smart TV segment and made up for it with growth in smart TVs. Market leader Samsung recorded an overall 6 per cent growth and a 5 per cent growth in its smart TV business. Yet, it lagged behind Xiaomi in the smart TV space with the Chinese firm growing its share to 27 per cent in 2019 from 24 per cent in 2018, while Samsung remained stagnant at 12 per cent. LG was the second largest player in the category, but its saw its share fall by 8 percentage points to 13 percent last year.
"Samsung continues to lead the overall TV market but the emerging smart TV segment is being cornered by the newer players. The smart TV market in India was mostly driven by brands like Xiaomi, Samsung and emerging tail brands such as TCL, Vu and others, which are leveraging their growing channel presence both online and offline to target the new users and upgrade users," said Counterpoint's Research Analyst, Debasish Jana. "While Samsung, LG, Sony are experiencing a year-on-year decrease in their non-smart TV business, brands like BPL, Sansui and others are still banking on the non-smart TV segment that mainly caters to the rural market, B2B segment or a second bedroom TV in many cases."
Newer entrants have gained traction in the smart TV segment by offering high-end features at lower prices. Incumbents have largely appeared flat-footed to tackle competition. Counterpoint cited examples like Xiaomi offering a 55-inch smart TV with a 4K panel at below INR 50,000 ($ 675), TCL selling its AI-powered 55-inch 4K TV at only INR 35,000 ($ 475) and OnePlus offering its 55-inch 4K QLED TV with 50-watt Soundbar for INR 100,000 ($1500) that have enabled these companies to steer mature smartphone users to purchase large-sized smart TVs. This strategy helped brands such as Xiaomi and TCL to grow their shipment volumes by 40 and 110 per cent YoY respectively in 2019.
"Brands like Xiaomi, TCL, Vu have been expanding over the last few years taking on incumbents such as Samsung. LG, Sony, and Panasonic. Furthermore, 2019 was marked by the entry of smartphone brands such as Motorola, Nokia, OnePlus with their Smart TVs looking to build a connected device story complementing their smartphone devices," Jana said. "These new-age brands from Xiaomi to OnePlus are offering high specifications, some unique features at highly affordable price-points targeting urban users via e-commerce channels. This has led to some serious price-cuts by competition during the year to match the value proposition from these Chinese brands leveraging the cost-effective e-commerce channels."