After Xiaomi, Another Chinese Firm Is Upending India’s Smart TV Market

Xiaomi Corp. upstaged Japanese and South Korean consumer electronics giants to become India’s largest smart TV brand. As cheap data fuels demand for connected devices, a compatriot is catching up, increasing the Chinese dominance.Since entering India in 2016, TCL Corp., the world’s second-biggest maker of TVs, threatens to overtake Japan’s Sony Corp. and is not too far from Samsung Electronics Co. Ltd. and LG Electronics Inc. in the smart TV market, according to data by IDC, a market intelligence firm.What draws new buyers to Chinese brands is up to 40 percent cheaper pricing and India’s cheap data boom.In 2019, 15 million TV units were sold in the country, and 45-50 percent of those were devices that can access internet to stream content from services such as Netflix and Amazon Prime Video, according to estimates by contract manufacturer Dixon Technologies (India) Ltd. Bulk of the demand for Chinese manufacturers comes online.The demand for smart TVs comes despite only 19 percent television-owning homes having a wireline broadband connection, according to the telecom regulator. But the cheap mobile data war unleashed by Reliance Jio Infocomm Ltd. has more than made up for that. It allows users to stream content from smartphones to Smart TVs for as low as Rs 129 a month. India’s aggregate data consumption since Jio’s launch has surged 43 times to 20.3 billion gigabytes as of quarter ended September, with 66.5 crore internet users. And Reliance Jio’s wired broadband is expected to boost penetration..India being the cheapest market for data in the world coupled with Indians being a more value-conscious has helped Mi get the number one position in the smart TV space, Eshwar Nilakantan, category lead (Smart TV) at Xiaomi, told BloombergQuint over the phone. Xiaomi provides Artificial Intelligence Patchwall, a universal search functionality, which helps discover content across various streaming services.But the biggest appeal is pricing.According to executives at country’s electronic retailers, Chinese TVs are 30-40 percent cheaper compared to other leading brands.Customers prefer buying a 55-inch Xiaomi’s Mi TV for Rs 34,999 over a 43-inch Samsung smart TV that costs Rs 36,999. TCL has priced its 55-inch smart TV at Rs 33,999.Both Xiaomi and TCL assemble TVs in India. Mike Chen, general manager at TCL, said in an emailed response to BloombergQuint that with its own panel factory and supply chain unit, TCL is able to maintain its edge in the market and tightly control the prices. “The same benefits are shared with consumers in the form of affordable prices.”Nilakantan said that Xiaomi doesn’t earn more than 5 percent net profit on any hardware products it sells. “Xiaomi also manufactures locally to ensure cost optimisation for its Mi TVs. They are locally manufactured in India in partnership with Dixon Technologies, and more than 85 percent of the Mi TVs sold in India are made in India. All these reasons combined allow Mi TVs to be priced aggressively.”Also Read: Xiaomi Buys 0.5% Stake in TCL as Companies Sign Cooperation PactDespite its highest share in the smart TV market, Xiaomi still lags in offline sales as the majority of demand for Mi-branded TVs is online. The Chinese company has just 2 percent share in the volumes through brick-and-mortar stores, according to researcher GFK’s data sourced from the industry.TCL has been able to make bigger inroads in the offline market with a 5 percent shares. Samsung and LG are way ahead of their Chinese peers..Chen said TCL’s overall share in the Indian market stands at 6 percent and it aims to boost it to 11 percent by the end of 2020.Samsung, LG and Sony don’t seem to be too concerned about the Chinese challenge, at least going by their pricing strategy. According to executives from appliance retail chains, the three consumer electronics giants haven’t cut prices to fend off cheaper brands.Samsung and LG are yet to respond to BloombergQuint’s query, while Sony declined to comment.Also Read: Hate TV Ads? Peacock May Change Your MindBut they may have think about the strategy as the share of smart TV grows. In the fiscal 2021, 65-75 percent of the units sold will be smart TVs, Atul Lall, managing director at Dixon Technologies, said. “The reason being there’s a significant price erosion in the TV space because of lower cost of raw materials.”

After Xiaomi, Another Chinese Firm Is Upending India’s Smart TV Market

Since entering India in 2016, TCL threatens to overtake Sony and is not too far from Samsung and LG in India’s smart TV market.

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