Status of the 2-Channel Market in India

[Canadian Hi-Fi]

I read a recent post (here) and thought there were several interesting replies. Of note was the fact that brands like B&W were priced at double the rate of the UK/US and at minimum 70% for many other brands.

As someone who works with a hi-fi amplifier company here in Canada, I wonder if it would be worthwhile seeking an Indian dealer for the product line-up or would it better to offer direct sales. From what I can gather, the Indian 2-channel high fidelity market is like others Worldwide in the sense that there is a craving for value.

I would appreciate input from forum members who think they have more insight to add regarding the current 2-channel hi-fi market situation in India.

 

[iaudio]

Canadian hi fi,
The Indian stereo hi fi market is in its infant stage, imho,as far as numbers are concerned.
And it has only way to go, UP!
There are lots of sales, that are not records, because of the premium or percieved premium in some cases of such goods from the official seller.
By direct sales, you mean, through a website? Or starting your own retail outlets in various parts of the nation?
If its an online portal based overseas, the goods would have to pass through customs, which would increase the hassle and cost of getting it. Also the potential buyer would have no way to audition.
You are right in saying that some brands charge a whopping premium on their products while there are others like Usher, Wharfedale which sell for international rates itself.
And you are right, we guys here love Value for Money.

Titus

 

[thevortex]

The idea is a good one, Canadian Hifi. But like iaudio mentioned, the online business has a few limitations which are not ideal when it comes to the 2 channel music listening scenario.

Why not look at tying up with some of the dealer members here and offer services through them?

 

[deba]

If one can provide any a/v equipment in india at the US price or little more than that......than no one can beat you, because most Indian dealers over charge their customers and take them for a ride...........)

 

[bottle]

The main problem even with direct sales is the customs I guess. I'm realy scared to order online since half the stuff gets stuck there for weeks before it gets cleared

 

[bottle]

Maybe I'm impatient. Most of the times here online orders come through with no fuss but if by chance it happens to come in a largish box it gets held up and I have to wait for their call memo and send in a copy of the bill and declaration letter etc before it gets cleared.

At least one thing thats improved is that I can send in the documentation via courier/post rather than going all the way out to the Foreign Post Office

(This is for stuff arriving via USPS)

The point I was trying to make is that with a local rep who would have all the proper mechanisms in place it might be a smoother buy for the end customer

 

[longshanks]

The two distributors I know who provide fair pricing are for Wharfedale and Usher, the margins are much more consistent and predictable, prices are in line with international pricing give or take

Very true, in fact Wharfedale's huge sales volume also is contributing to their competitive pricing.

(and sometimes lower).

which brand is that?

 

[Asit]

Cambridge Audio products are priced very fairly in India compared with their USD or GBP prices. In the budget range, their products are also VFM. This combined with fair Indian pricing perhaps explain a reasonable volume of sales of CA products in India.

Regards.

 

[longshanks]

^^The other one

AFAIK usher speakers sell in India for a much higher price than what it sells for in Singapore.

I guess u are comparing the USA prices, but those speakers are different version and have diff crossover from what Ive heard hence the higher price there.

Usher speakers are of course very competitively priced in India compared to many other brands.

 

[longshanks]

Well they sell for even cheaper in Taiwan (I think they actually cost half the India price) - but that's beside the point.

The US price is followed more or less by everyone as an indicator of 'fair price', so we are comparing apples to apples here.

In the case of usher when they have two versions getting sold of the same speaker for Asia and USA i felt comparing Asian pricing with Indian pricing made more sense.

For most of the brands US price can be followed like you said, but not for all. let us take for an example of the brand i like and the one you don't like that much(JM Labs), Their speakers sell for much higher price in USA compared to Europe. Their Electra be bookshelf costs about 4.5 k $US in USA compared to approx 3k $ US in Europe, So the comparison of Indian price must be with euro price and the sad part is it sells for approx 5.2k $ US approx in India which is closer to the US pricing, but we cannot say that their pricing is fair in fact it is a complete rip off.



Like you said apples to apples.

Everything today (90%) is made in China. Arguably it is cheaper to ship to India from China than to the US, and therefore most of this stuff should cost less, but that is not really true now, is it?

Since the number of variables is typically large, one would tend to follow a single benchmark, that of an ultra-competitive, high volume market like the US (though some would argue that it is the wrong benchmark) to figure out, at the very least, where things lie on a price-to-performance scale.

A $1000 speaker being offered for $1200 (or $1000) in India is much better than a $1000 speaker being offered at $2000 (or $1500). At least the two speakers offer (or should offer) similar levels of performance, if they are equally popular in other markets and are known to perform similarly to each other.

OTOH, a $3000 amplifier being offered at $5000 is a rip off. There is no other way to describe it.

That is why i said usher speakers are priced very compatible in India comparing to many other brands and that that was supposed to be me appreciating their pricing.

So i guess we can conclude by agreeing on the fact that usher India distributor has done a good job with pricing and support.

 

[venkatcr]

This issue is valid for all products. I remember when I was representing some International software in India, I would beg the principals to offer a differential pricing for India. A case in point was an accounting engine that was bought out by Microsoft later. Though we sold over 25 copies in one year, the product was priced the same as the US market - at over a lakh per suite. We were always compared to Tally, though our product was close to an ERP. That severely restricts your market and dramatically increases you sales cycle. With AV products, everyone can look at the US or European pricing, multiply it by some conversion rate, add what they think is reasonable margin, and consider any other price to be a rip off.

Even in HFV I have come across many members who are ready to take the risk of not having a warranty if they can save some 10 to 15K on an amplifier.

Unless the brand has an iron grip on the market like B&W or SAP does, differential pricing is the only way to go. That keeps everyone happy - customers, dealers, and distributors.

Cheers

 

[longshanks]

@cranky

I agree with all your points except for the JM labs pricing, since they are getting those speakers from Europe i feel they should sell it for a way lesser price compared to the current Indian pricing.Those Electra bookshelf speakers would not cost them much in terms of shipping and added to that the distributor will also get huge discount in pricing from the manufacturer.

There are also many other brands who follow this total rip off pricing India like you said ,Those brands are loosing customers to grey market importing route.

 

[S.P.KRISHNA]

It is unfortunate to note that many Indians are not aware of what is quality music.Still many of our folks are not exposed to Compact disks and use tapes.Simply many of us just have a Sony or Phillips Hi-Fi systems and feel that those are ultimate.Their distributory channels are so high that every electronic goods selling shops will sell them.Even these are Highly priced keeping away the prospective buyers. We have quality brands .Indian made, such as norge , Sonodyne Etc.,which are priced approx.at the same price level as sony/phillips Hi-Fi systems. But they failed in their marketing and distributory levels. Once these entry level brands penetrate the market majority of us will be knowing what is real music and this interest among the people will drive them to learn more about quality products both ingenuous and indigenous, thus paving way for imported brands increased sales so that it will result in reduction of their prices.But this is possible on paper. I feel that both sony and phillips are pushing on us their cheap Hi-Fi systems with attractive designs ,allowing huge dealer margin ,and killing other quality Indian products whose manufacturers unable to give dealers a good margin due to market constraints and lack of funds.

 

[Canadian Hi-Fi]

Canadian hi fi,
The Indian stereo hi fi market is in its infant stage, imho,as far as numbers are concerned.
And it has only way to go, UP!
There are lots of sales, that are not records, because of the premium or percieved premium in some cases of such goods from the official seller.
By direct sales, you mean, through a website? Or starting your own retail outlets in various parts of the nation?

Titus

Hello Titus, the amplifier company I work with wouldn't be starting any sort of retail operation internationally (it doesn't even have one domestically). It's the nature of the handbuilt items, which focus on high quality over volume produced. Word of mouth has been the way it's been done for 40 years. But, there is a whole other world out there and I think it's time to reach out to it.

It's a bit of a "catch 22" dilemma when entering a new marketplace with a product where the reputation and heavy marketing hasn't preceeded it. Does one offer through a dealer first, or advertise locally (on websites such as this perhaps) or seek distribution channels and let them market it.

How does one hear and sample a new product if there are none present in the country. Dealers would be the best option with this but of course with a dealer they too have mouths to feed and bills to pay, expenses which are passed along to the consumer. Whereas, direct sales bypass such middlemen but without such the product may never be known.

Naturally, it would hardly be fair to these dealers if after helping to build up repuation and sales then pull all third party purchase options for only a direct one. Can you imagine the animosity? I like doing business where everyone walks away a winner. The question is how to proceed.

It's a long way to travel (from Canada to India) for one man to go simply to promote an amplifier line with a production capacity of perhaps only 30 units built per year full steam. The product line-up is based upon that of value for the money (by keeping overhead and other costs low) and such promotion would require the end price to be raised by a factor of 10 just to make it pay. Even then there would be no guarantee of any sort of success, so the choice of not walking that path is obvious.
In the same breath, if there were a Consumer Electronics Show in India, like the CES in Las Vegas (is there?) a man could travel to put up a showcase but the resources required would outstrip sales at the gross level and defeating the value component.

I agree that India's hi-fi electronics marketplace is budding. We shall see, I feel that some sales to Indian customers will be inevitable.

 

[Canadian Hi-Fi]

The idea is a good one, Canadian Hifi. But like iaudio mentioned, the online business has a few limitations which are not ideal when it comes to the 2 channel music listening scenario.

Why not look at tying up with some of the dealer members here and offer services through them?

Hello Vortex, making arrangements with those you mention may be a logical route that we may have to take in some form.

 

[iaudio]

One way is to send a demo piece to one of our senior members here in India or the few who are there in the US. If they find the product to be good, many potential customers would come to know about it and benefit.

 

[Canadian Hi-Fi]

It is unfortunate to note that many Indians are not aware of what is quality music.Still many of our folks are not exposed to Compact disks and use tapes.Simply many of us just have a Sony or Phillips Hi-Fi systems and feel that those are ultimate.Their distributory channels are so high that every electronic goods selling shops will sell them.Even these are Highly priced keeping away the prospective buyers. We have quality brands .Indian made, such as norge , Sonodyne Etc.,which are priced approx.at the same price level as sony/phillips Hi-Fi systems. But they failed in their marketing and distributory levels. Once these entry level brands penetrate the market majority of us will be knowing what is real music and this interest among the people will drive them to learn more about quality products both ingenuous and indigenous, thus paving way for imported brands increased sales so that it will result in reduction of their prices.But this is possible on paper. I feel that both sony and phillips are pushing on us their cheap Hi-Fi systems with attractive designs ,allowing huge dealer margin ,and killing other quality Indian products whose manufacturers unable to give dealers a good margin due to market constraints and lack of funds.

I find this very interesting reading! Such is is the case across the board in every country out there: large Multinationals muscling in through brute volume, crafty distribution and branding. Two channel hi-fi is a niche market here and by the sounds of things in India as well. I do hope there is a larger contingent of Indians willing to forego slight in-conveniences for higher quality. More and faster is not always better.
A corollary; a smaller non-genetically engineered fruit has greater measured nutrient density, health benefits and slightly higher price than does the equivalent patented genetically engineered garbage. But the patented garbage grows larger per fruit and costs less than non-gmo, but fruit is sold by the pound NOT by it's nutritional content. The question is which would one rather consume? In which lies the quality?
So, do we want tonnes of un-naturally compressed convenient audio in the form of an Ipod or do we want an eerily accurate reproduced performance in our living rooms. You could have both, but I think as a music lover closer to the real thing is far more satisfying.

 

[thevortex]

Hello Vortex, making arrangements with those you mention may be a logical route that we may have to take in some form.

Theoretically what you could do is send one sample piece of equipment (say an amplifier) to one of the senior members here and get people to listen to it to get an idea.

And then whenever anybody decides to buy you can ship it from your place. That way I guess you may not need to recruit dealers here.

The obvious problem is the wear and tear the amplifier will undergo if it goes places. But then if it does go places you know that your amplifiers are becoming famous .

 

[venkatcr]

One way is to send a demo piece to one of our senior members here in India or the few who are there in the US. If they find the product to be good, many potential customers would come to know about it and benefit.

This has already been done by a HK based manufacturer.

Many sales have resulted based on the recommendation and reviews done on HFV.

Cheers

 

[iaudio]

And the particular demo piece could be brought for one of the Bangalore, chennai, Delhi meets, so that a whole lot of members can have a listen.