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Electrolux scouts for partner to enter India's television and audio products market

KOLKATA: Swedish household appliance maker AB Electrolux is scouting for a local partner to enter India's television and audio products market through brand licensing, a top company executive has said.

"India is one market that is growing faster than those of developed economies. This represents a huge scope for us to grow the business. We want to become a full-play electronics and durable company here," Mathew Young, Electrolux's global head of brand licensing, told ET.

The world's second-largest home appliance maker by revenue had exited India in 2005 by selling its assets and brand rights for the air-conditioners, refrigerators, microwave ovens and washing machines it sold under the Electrolux and Kelvinator labels to Videocon.

Young, who is on a visit to India, said he would meet potential partners who have expertise in television manufacturing. Last week, the company had said it will partner Delhi-based Kent RO Systems in the premium water purifier segment.

"The television and audio products market is indeed very tough in India with lot of competition and low margins. Still there is space to grow," Young said. "We will not use the Electrolux brand for an entry into this segment, but probably something else."

Electrolux sells televisions in Hong Kong and Germany through brand licensing.

Experts, however, feel it will be an uphill ride for Electrolux as the country's flat-panel television space already has four players - Samsung, Sony, LG and Videocon - which together hold 90% market share. "In this business, profit margins are just 3%-4%. Moreover, the four large TV makers have a huge brand pull. Creating a new brand will be a tough proposition," said a senior executive at Videocon. India's 40,000 crore consumer durables and electronics market is equally split between appliances and television.

Electrolux joins two other multinational durable makers - Japan's Panasonic and Sharp - who are charting their second course in the Indian market, after facing sluggish demand in the western markets and Japan.

Under its partnership with Kent, the Indian company will design, manufacture and distribute the reverse osmosis water purifiers, which will be sold under the Electrolux brand name in India. Electrolux plans to export the products for its global operations spread over 150 countries, too.

"Electrolux has no expertise in water purifiers, which we will provide in a bid to help them enter the portfolio globally. We are deciding the markets where the products can be launched," said Kent chairman and managing director, Mahesh Gupta.

In India, the Electrolux brand notched 1,100 core in sales in 2012-13 while Kelvinator brought in another 1,400 crore, according to a senior executive of PE Electronics, the company set up by Videocon to market the Electrolux appliances range. Videocon directly manages the Kelvinator range of products.

Electrolux has also set up a representative office in Delhi to market in-built kitchen appliances, which are sold through modular kitchen makers. Last year, the company had entered into a brand licensing agreement with Chennai's Morf Ltd to launch the Kelvinator range of water purifiers.

"We want to enter the right category with the right partner in India. We have 55 brands in our portfolio and will evaluate opportunities for each of them," Young said.