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India doesn’t Have The Infrastructure To Be Able To Manufacture The Complete TV Set Or Any Other Electronic Products: Arjun Bajaaj, CEO, Daiwa
In the wake of the calls for banning Chinese goods/materials, the electronic industry which has so far been heavily dependent on Chinese market is upbeat for make in India. At the same time, it faces tremendous pressure in terms of supply chain disruption, customs, lack of infrastructure & closure due to Covid-19. Arjun Bajaaj, CEO, Daiwa, speaks on such issues with BW Businessworld's Manish Kumar Jha
Photo Credit : Daiwa
Arjun Bajaaj,CEO & Founder, Daiwa
How has Daiwa been doing?
At Daiwa, we have a complete backward integration setup here in India. We have a capacity of manufacturing 1 million TV sets a year. We have 2 SMT lines, 3 LCM lines for panel assembly and 2 final assembly lines along with 2 R&D centres; out of which 1 is located overseas and 1 is in India. We have inhouse reliability centre which is for quality purpose. We have been manufacturing for lot of International and domestics brands.
Could you talk about 'Make In India'? How much television sets are made in India or the research and inputs derived and designed in India if you take account of inputs in the global supply chains?
To be very honest, India doesn’t have the infrastructure as of now to be able to manufacture the complete TV set or any other electronic products as well.
For instance, the television sets major cost is of open cell- a screen of the TV which holds the maximum cost in making, that is something that is not manufactured in India, and hence all players are dependent outside.
Totally, there are only 6-7 companies worldwide that manufacture these cells and out of them a few have started selling their TVs in the Indian markets or have been selling for years. But no such technologies have been brought to India as it incurs a very heavy investment and government support. Government needs to intervene and ask these companies to invest in India and put up plants so that a real “Make In India” can happen.
Yes, of course we are making televisions and a lot of it we are doing from the complete scratch, but again for a few things we are dependent on China, as we do not have the same infrastructure (Components and more) here in India, so that is a major issue.
Worldwide the Chinese market has dominated 70% of the supplies worldwide? Does China have an advantage of large infrastructure and capacity to sell to the world?
Its not just India who is facing this problem, this problem is seen worldwide, as China is the major dominant supplier. Even the Korean companies manufacturing open cells, have units in China. China has established itself, as a global supplier, a hub that has been supplying to every other country. For instance, USA has booked so many orders to China for Tvs, that China is busy manufacturing for USA and now Indian demand has also increased for Tv’s. So, understand, if India has adequate government support or infrastructure in place or companies investing in India with their set up, only than can the scenario change for “Make In India”.
Due to the tension on the borders between India and China and call for banning the Chinese products, specially, when we import such a heavy quantity of items from China, does this offer a big opportunity for India to bridge the gap?
Something like this cannot happen overnight as it requires heavy investment and it also requires a certain amount of time for this kind of infrastructure to happen. Just by saying boycott China, or material coming from China, is only going to destroy the Indian economy. This shall only jeopardize the business of Indian players.
I think India should focus on building its infrastructure, simultaneously, government should provide certain aid to companies that are planning to come to India which would bring in the technology and start building the infrastructure instead of putting restrictions on import.
The government should also start thinking of their FDI policies and assist in aid, for the companies who are planning to come to India. Countries who have this kind of infrastructure should be called to India and the international players that are selling should also be asked to put up plants like this and only then we can become the export hub, because once they put up plants for these(open cells or other components) they would also be able to supply globally from India. The plant shall have a huge capacity and can run only if it running at its complete capacity and only then it can be profitable for the companies. So, if they set up these kinds of plants in India and are able to put an infrastructure like this only then India can become an export hub which is our PMs vision as well. “Vocal for Local” is definitely is creating hype about the Indian products, but the sad truth is we are still a few years behind.
How is all of this affecting your business since your parts are sourced from China as the government has put some restrictions affecting custom clearance?
First, we had to deal with factories being shut for months and then we were just reaching to full efficiency, but again there was a major hit by hold in custom clearances, so that did impact. But now they have started clearing goods but its still not 100% fine but we are somehow managing.
Government should make efforts for revising the economy instead of putting such a restriction. We can’t immediately boycott things and when we say these Chinese players are dominating the Indian markets, if they have such kind of technologies, they should be asked to make these kinds of investments in India. The government should actually rethink what we need to do to improve the infrastructure level and then a true Make in India manufacturing happens here.
With many companies like Xiaomi and Samsung having bigger market shares while you have been a player for over 3 decades building TV sets and you come up with best technology now. How do you position yourself in such a competitive market and place your product in terms of price and technology?
Since the last 36 years we have been making Tvs so we understand the pulse of the Indian users and markets. Every country has a certain liking and needs, as we sell in India we understand what kind picture quality, sound quality Indian consumers need. Keeping that in mind our products are designed specifically for the Indian users and climatic/power conditions. Whereas, the Chinese players design their products for the global market. So, they don’t practically focus on a particular country, their focus is on to sell the televisions worldwide.
At Daiwa, we are focusing on building a good ecosystem here in our company and with our manufacturing set up we ensure the product quality is at its best and we can offer the best of features in our products.
Are you targeting any market share in the category and the revenue?
We usually don’t comment on that. Our focus right now is on expanding our channel and our brand. And if we talk on the B2B side we are in talk with a certain players for which we shall be manufacturing TVs. And from the brand perspective, we are focusing on increasing our channel sale. As in whole, our companies’ revenue is 250 crores.
What should we expect in terms of products in the coming days/ months?
We have recently launched very good sound technology TVs in India - dbx tv technology as that gives a surround sound experience.
Apart from that we upgraded our existing TVs and introduced RAM from 1GB to 2GB and even doubled our capacity to 8GB to 16GB, which no other player is offering at the moment.
We are also tying up with content partners to bring the complete experience for our users. We would be making a lot of changes in the designs of the tvs for the future products. We are working upon a lot more products and new technologies which will be out this year.