Philips takes on Chinese competition with sub-Rs 2,000 DVD player

Chitra Narayanan Updated - September 13, 2011 at 09:41 PM.

Plans aggressive distribution push; unveils financing scheme

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A sub-Rs 2,000 DVD player codenamed Shakti to counter the Chinese offerings, a financing scheme for the first time in years, an aggressive distribution push, a big tilt towards local innovation and manufacture – suddenly Philips India has unleashed a host of new initiatives in a bid to ignite its consumer lifestyle division.

There was a time – in the 1990s- when the face of Philips in the country was its consumer lifestyle products. Now, it's the division generating the least revenues for the Dutch lighting-to-electronics-to-healthcare conglomerate. Barely 18 per cent of Philips India's 2010 revenues (Rs 3,724.9 crore ) came from its consumer lifestyle unit.

But that could change. “This is our year of reinvention for the consumer lifestyle division,” says Mr Anjan Bose, the new business head for the division. Mr Bose was earlier heading the company's healthcare division.

To ignite growth in the division, Mr Bose says the company has stepped up investments in local innovation and design, ramped up distribution, and is working on the right product price solution. “This means more local manufacture - for instance, now all our DVD players are locally manufactured,” he says, describing how it has enabled the launch of Shakti, its new sub-Rs 2,000 DVD player. In DVD players, Philips claims to have leadership position, with 24 per cent marketshare.

In fact, 50 per cent of domestic appliances are now domestically manufactured, points Mr Bose. “We have managed to derisk ourselves from import duties by going in for strong co-makers arrangements,” he says.

Financing scheme

For the first time in many years, Mr Bose, describes how the division has also launched a financing scheme, with the Cine Baap offer for its Lifestyle Entertainment offerings. “We are breaking the mental barrier and challenging the status quo ,” he says.

“Globally, too, Philips is doing a lot of re-strategising for the division,” he points out.

For instance, early this year, Philips relocated the headquarters of its domestic appliances business – part of the Consumer Lifestyle unit - to Shanghai in order to spur revenue growth in China and the region. With weak consumer demand in Western markets, 40 per cent of Philips' Consumer Lifestyle sector's sales come from emerging markets. Former Philips India CEO Mr Murali Sivaraman moved to Shanghai as part of the restructuring to head the global consumer lifestyle business group.

The acquisition of Chennai-based kitchen appliance maker Preethi also is part of this new aggressive push for the division.

Published on September 13, 2011 16:11