Frost & Sullivan
Friday, August 23, 2013 12:30 PM IST (07:00 AM GMT)
Editors: General: Economy, People; Business: Business services, Electronic appliances & components, Information technology; Technology
Frost & Sullivan: Flat Panel Display (FPD) TV Market in India Estimated to Grow to USD 6.39 Billion by 2015 at a CAGR of 21.7 Percent
The growing upper middle class drives demand for LED TV while the huge rural population offers demand potential for LCD TV
Mumbai, Maharashtra, India, Friday, August 23, 2013 — (Business Wire India) — Digitization of broadcast, reduced replacement cycles and increased affordability is driving growth in the Indian Flat Panel Display (FPD) TV market. Advent of Internet-Ready and Smart TVs have altered the characteristics and dynamics of the TV market, which is witnessing a paradigm shift from Cathode Ray Tubes (CRT) TVs to Liquid Crystal Diode (LCD) TVs to Light Emitting Diode (LED) TVs to Smart / High Definition (HD) TVs.
The FPD TV market comprises LCD, LED, Plasma, 3D, and Smart TVs. Of the different types, LCD TVs have achieved greater proliferation in the Indian market. The increasing affordability of LCD TVs coupled with their better performance, smaller size and wider options has resulted in their replacing CRT TVs. Growth is expected to be driven by enhanced purchasing power, digital broadcast (DTH, IPTV, STB cable) transition as well as consumer awareness of FPD TVs. India’s growing upper middle class that has already moved from CRT to LCD TVs is now driving the shift towards LED TVs. The huge rural populace on the other hand, is projected to be the greatest source of LCD TV demand till 2015.
The LED TV market is witnessing slow and steady growth due to the global trend for energy saving, eco-friendly products and consumer consciousness. The rapidly narrowing price difference between LCD and LED TV is tilting demand in favor of LED TVs. This has made major consumer durable companies discontinue mass manufacturing of LCD TVs even as they enhance their focus on LED and Smart TVs. Smart / Internet-enabled TVs are becoming increasingly popular with the growing demand for connected devices. The dual use of TV as an entertainment device as well as an internet enabled device that provides access to social networking sites and the rest of the Internet is the most attractive attribute increasing Smart TV usage.
Frost & Sullivan research estimates that the FPD TV market in India was valued at US $3.55 billion in 2012 and is likely to grow at a compound annual growth rate of 21.7 percent by 2015. The total market (TM, total consumption) for FPD TV in India in 2012 was 6.48 million units and the total domestic manufacturing (TDM, representing local production) was 1.93 Mn units for the same year. TDM is a low value-add activity, as LCD panels are imported and final leg assembly is performed here. The import-heavy nature of the FPD TV market has resulted in it being vulnerable to volatile currency conditions. For FPD TVs, 2012 was a turbulent period owing to increased raw material costs while depreciation of the rupee added pressure to the prevailing conditions. This trend has continued much into 2013 as the rupee has reached never before lows of INR 64 against the US $. This has resulted in increase in prices of FPD TVs by 5 to 15 percent from different manufacturers.
According to Deepa Doraiswamy, Industry Manager, Electronics & Security Practice, Frost & Sullivan, “Availability of easy finance options, enhanced purchasing power, and obsolescence of technology (earlier CRT and LCD in the near future) creating a huge replacement demand, are some of the triggers for rapid growth in the FPD TV market in India. Despite huge consumption demand, India sorely lags behind in FPD TV manufacturing and this is an area that needs immediate attention as the future growth trends portend a widening supply-demand gap if the current situation continues.” Doraiswamy further opines, “Recent policy initiatives such as the Modified Special Incentive Package Scheme (MSIPS) that provide capital subsidy for manufacturing investments are expected to influence investments in indigenous manufacturing of FPD TVs in the coming years.”
Import duty on LCD panels was eliminated in the 2012-13 Budget, which led to anticipation of increased domestic assembly. However, India’s Free Trade Agreements (FTAs) with countries such as Thailand are proving to be a restricting factor, as some key manufacturers have built up capacity for FPD TV manufacturing in these locations and the FTA allows them free access to the Indian market.
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