How Foreign Multinational Enterprises Have Contributed To Technological Development In The Consumer Electronics & Appliance Industry In India.

Contents

An overview of the Consumer Electronics & Appliance Industry. 1

Technological Developments. 2

Japan’s contribution to the technology development in India. 3

Tapping into rural India. 6

Philips Software development hub. 6

Sony Corporation’s Contribution to Technological Development in Consumer Electronics and Appliances in India  7

Tapping into semi-urban and rural markets. 7

Leveraging the India Advantage. 8

Samsung India. 8

Whirlpool of India. 9

Hitachi India. 9

Sharp India Limited. 10

An overview of the Consumer Electronics & Appliance Industry

The Consumer Electronics & Appliance Industry in India, one of the developing countries in South Asia, just like the other parts of the world, is going through pronounced transformations. For the past 10 years, advancements in technology and regulatory restructuring have to great degree transformed this industry.

India being the second most populous country in the world and world’s tenth-largest economy by nominal GDP and third-largest by purchasing power parity (PPP), provides a very rich and profitable market for numerous multinational enterprises that deal in consumer electronics and appliances. India has become one of the fastest-growing major economy and it has been considered as a newly industralised country. Though facing a number of economical challenges such as corruption, illiteracy, poverty, inefficient healthcare reforms e.t.c. just like any other developing country, it continues to be a target for a number of multinational consumer electronics and appliance manufacturers. (Bailey G. & Wenzek H, 2010)

There are numerous commodities in this industry, the most commonly used include: blenders, electric ovens, fans, televisions sets, freezers, gas cookers, irons, meat grinders, washing machines, popcorn makers, vacuum cleaners, hot plates, home theatres, radios etc.

The consumer electronics industry in India has been steadily growing at a double-digit rate since the past few years. Increased product awareness, higher disposable incomes, shift in lifestyles and affordable pricing have all greatly contributed to changing the level and pattern of consumer spending on these commodities; thereby, producing a strong growth in the consumer electronics industry. The consumer electronics goods, like televisions, refrigerators and air conditioners although have low penetration in the country, leaving vast room for future growth and development ( Langlois  R., & Robertson P  1995).

Technological Developments

From time to time India has witnessed pronounced technological developments in the consumer electronics and appliances industry. Multinational companies in India which include: USA, China, Holland, Japan and South Korea.

The table below shows brands of electronics and appliances by brand and country of origin.

Table (i): Brand and Originality (Langlois R., and Robertson P,  1995)

It can be clearly seen that Japan has dominated this particular industry in India. Japan`s reputation in manufacturing quality and up to standard products have seen it vastly penetrate the Indian market easily unlike other countries like China.

Japan’s contribution to the technology development in India

From table (i) we can see that Japan dominates the market with its products. There are a total of 352 companies of Japanese origin in India. There has been introduction of numerous commodities in the market, table (ii) below shows what individual companies manufacture.

Table (ii): Japanese Companies in India and what they manufacture.

According to the Embassy of Japan in India, Japanese companies setting up in India increased by 158 companies from 318 to 476 in the period between January 2006 and February 2007. 90 percent of this concentrated in the four major cities which are Mumbai, Delhi and its suburbs, Bungalore and Chennai.

Philips Contribution to Technological Development in Consumer Electronics and Appliances in India

It has lived up to its vision `simply making a difference to people`s lives`. One of the nation’s most well known makes, Philips India Ltd. has greatly contributed just like other multinational enterprises that have set up businesses in India, to a great extent in the technological development and has literally become part of every India’s life. Its focus in consumer electronics and appliances has seen it gain household reputation as an innovative and reliable provider of such commodities that enhance the quality of user’s personal and professional life. Philips products are used virtually at every place in the daily life in various parts of India-home, work and even on open parks.

Philips India Ltd. Started operations in 1930 as “Philips Electrical Co. Private Ltd” with 75 employees. Currently the company has over 4500 employees and it is a leading producer of lighting, semiconductors, consumer electronics, domestic appliances, medical systems and wide range of multinational products of superior technology and design. With seven manufacturing locations spread in India, together with a world class innovation campus and research and development hub in Bangalore the company has dedicated to over 20 percent of the entire Philips resources for software development and high-tech research and development.

Philips has made investments of over USD 150 Million in all operations in India for the past 5 years. Philips India has become the market leader in nearly all its products, it has a 45.8 percent revenue share of the audio market such as, hi-fi stereos, CD players, Monos, DVD products, radios and home theatre systems. The company also leads in market share of lighting systems: particularly lamps and lighting electronics.

Philips has consistently led in the market of semiconductor industry in India. 60 percent of TVs in India have Philips chips. The chips are even available in the world`s thinnest watch which was also made in India. The company further has a top market share in dry iron and juice mixer categories.

The company has garnered a number of recognitions which are:

• Recognised by Business World magazine as “The Most Respected Company in India in the Consumer Durables Sector” in 2002.
• Recognised to be one of the best Indian employers by the Business Today (BT)-Hewitt Survey.
• India’s Philips Software Centre (PSC) was ranked in the top five in the Business World-Grow Talent “Great Places To Work” survey.
• Rated Number 16 in the Economic Times Brand Equity – India’s Most Trusted Brands 2003 survey.

The company has come up with products suited for the Asian market according to the consumer needs. It has customized these products from being referred as `European` to suite the Asian consumer. The company has also succeed in recognizing varied cultural and lifestyle demands by customizing technologies and products for the country`s consumers. A best example is when the when the audio equipment worldwide shifted from tapes to CD systems, the company developed a combined tape recorder and CD player since both media were widely prevalent in the country.

Philips has through its innovations introduced stereos that hook into high-speed internet connection to play music from the web.

Philips also has introduced televisions with improved audio facilities and capabilities like external sub-woofers and Woox technology; this is founded on the insight and believes that most Indians like to “hear” television. Philips televisions do have on-screen display in various regional languages. Several other numerous products are localized and customized such as steam irons, dry irons, microwave ovens, toasters and mixer-grinders. In the semi-Conductors category, Philips is coming up with “Made in India” applications and products for Asia Pacific and global solutions such as CORDECT and microcontroller-based solutions.

Philips has introduced product offerings across all price and performance points for the wide Indian market. Its product portfolio or combination includes global products that cater and are applied to “anywhere in the world” consumers, as well as styling and high-reliability products for the mass consumer base.

Philips has brought about global technology to consumers in India at affordable prices. It has been vocal in bringing latest technologies like digital widescreen TVs, integrated wireless FM, high-definition rear projection TVs with DVD, amongst several other commodities to consumers in India.