A slew of acquisitions both in domestic as well as overseas markets signal the arrival of an Indian multinational—Videocon.
It is payback time for rivals. Videocon, the Dhoots-owned Group, which once, along with Onida and BPL, ruled the roost at the Indian consumer durables market, began to feel the heat with the entry of MNCs, particularly Sony and the Korean Chaebols—LG and Samsung— about a decade ago. Unable to cope with these rivals’ sheer aggressive marketing and distribution strategies along with their strong focus on product innovation, the domestic players soon began to lose market share and hence market leadership. In white goods alone, Videocon saw its market share to plummet to less than 18% from over 70%. However, Videocon was not to sit on the fence for long. The company with its two bigticket acquisitions involving Thomson’s worldwide Color Picture Tube business and 91.85% stake in loss-making Electrolux Kelvinator Ltd. (EKL), the Indian subsidiary of Sweden-based AB Electrolux’s (ABE), this year, has made its intentions clear—it is not just on the comeback trail, it wants a bigger pie, a global one. Yes, Videocon is on a major globalization drive, as it looks to become a true Indian multinational.
However, it faces tough challenges like slowing demand for CPTs, rapidly changing technologies, and most importantly, wafer-thin margins in the consumer durables business. |
