Rediff Logo Infotech Banner Ads Find/Feedback/Site Index
August 21, 1998


HCL Infosystems

IBM-Is e-Business for you?

Manufacturing in the time of dumping: Even as global giants force the local monitor industry to down shutters, one brave soul is powering up the conveyors. Priya Ganapati in Bombay

Kinetic Communications Limited, in association with Daewoo Electronics Company of Korea, has launched a range of non-interlaced Daewoo colour monitors for the Indian market.

Email this story to a friend. The monitors will be manufactured out of completely knocked down kits supplied by Daewoo and sold under the Daewoo brand name.

Monitor industry
Localised office suite
U R Rao is not happy
TN exports shoot up
Jung Hahm, brand sales manager, Daewoo Electronics, is confident that his company would be one of the top five suppliers of colour monitor in India by 2001, with a volume of 10 million monitors per annum. To achieve this, Daewoo Electronics has focussed on strategic markets like India, he explained.

Manish Motwani, managing director, Kinetic Communications says that the tie-up with Daewoo Electronics to supply world class display products for domestic and export markets would increase KCL's market share in colour monitor from the current 10 to 20 per cent by 2000.

"There are two reasons why KCL got into the monitor business. The IT industry is going to see a lot of growth over the next two years. India also has the lowest number of computers per capita of the population. The monitor industry is expected to grow from 600,000 units in 1998-99 to 1.2 to 1.8 billion units in 1999-2000," Motwani told Rediff.

With most players in the domestic monitor industry on the brink of closure, the industry is facing a crisis. At present, it is operating under heavy import duty structure and under severe competition from international players.

The duty differential between finished monitors and components is a very low 5 per cent. This makes the business of importing components for manufacturing in the country not viable.

Motwani agrees that big global players have an edge over domestic manufacturers. "Till you have economies of scale it is difficult to sustain yourself in the industry. Only the big fish are going to survive. The smaller ones will have to close down because of the competition," he admits.

Which probably explains why Kinetic has decided to tie up with Daewoo. "The advantage we have is a good manufacturing facility, sales service and a strong partner in Daewoo," he enthuses.

KCL has a technological tie-up with Daewoo that has authorised them to use their brand name.

Though the domestic monitor industry, worth an estimated Rs 4 billion, is expected to grow by 40 per cent this year the domestic players have lost market share to foreign brands that have consolidated their positions by capturing over 50 per cent of the market.

Motwani believes that he can buck this trend. He believes manufacturing out of completely knocked down kits would give him that extra advantage over traditional manufacturers.

"The margins in the IT industry are very low. So even this 5 per cent difference gives us an advantage over others," he points out.

"There are two reasons why Kinetic decided to assemble monitors from CKDs. One is that we are not just traders. We want to assimilate technology and improvise it so that it is better suited for Indian needs in terms of voltage regulation etc. We also think that it is important for us to have some manufacturing facilities in the country. The second reason is that we believe that we can provide better services as we are not just selling monitors but are manufacturing them too," Motwani emphasies.

When asked to elaborate what the "better services" would be, he told Rediff "Someone who is importing monitors will not be able to offer the kind of services we will be giving. For example, if someone wants us to replace a box or debug a PC board at the user site, we will have the advantage of a factory in India. If a chassis, that is the board, needs replacement an engineer from the factory will provide a replacement immediately. The faulty chassis can then be taken and repaired at the factory itself."

Motwani elaborates on the philosophy that has gone into developing the products. "Our monitors are digital colour monitors based on the Daewoo philosophy of 'Tankism'. They believe that a product should be designed like an army tank. It means that the product should have no superfluous functions. It should be reliable and should be built ruggedly."

KCL offers a range of products for the Indian market. "Our product range includes 14-inch, 15-inch and 17-inch and 19-inch monitors. In the first quarter of 1999, we will launch 21-inch monitors. Our monitors will also be of the non-interlaced kind, which is the best," he says.

Motwani wants to usher in a revolution in the Indian monitor industry where 14-inch monitors still rule the roost.

"Our USP is that we want to aggressively promote 15-inch monitors. All over the world, except India, China and a few countries in Africa, 15-inch monitors are used. 15-inch monitors are the largest selling because of reduced distortions on the edges and better picture quality. We have aggressively priced our 15-inch monitor to facilitate the Indian customers to transition from 14-inch to 15-inch monitor," he says.

"Previously the price difference between 14 and 15-inch monitors were kept at around Rs 2,000 to Rs 3,000. And India being a price-sensitive market this prevented consumers from adopting 15-inch monitors. But now we have kept the difference at about Rs 1,000. So the consumer gets a 15-inch flat screen for just Rs 1,000 more," Motwani reveals.

KCL also plans to offer multimedia solutions for monitors. That translates as monitors with microphones and built-in speakers. But this product is still in the developmental stages.

The colour monitors will be manufactured out of the KCL factory at Pune. "Kinetic had earlier ventured into supplying digital colour televisions. However, due to lack of proper infrastructure in the country the product failed. We had a factory for that, which we are now utilising for the manufacture of monitors. We have a good understanding of display techniques because of the synergy between assembling televisions and monitors," he says.

KCL plans to start export of monitors to SAARC countries within a year and to the Middle East and Africa later on. They aspire to eventually export to Europe.

KCL also has a research and development department that has developed a host of new features. "We have redesigned the power section to make it compatible with Indian conditions.

Also, today microprocessors are mainly software based. So we got the process chart from Daewoo and optimised the core to have added features. We have suggested incorporating the recall function that will have recall for maximum three settings at no extra cost. Daewoo has promised to add this idea into their future products," Motwani says.

Motwani is content riding piggyback on Daewoo and does not miss having his own brand name on the products. "Because of the tie-up with Daewoo we have access to their markets and their brand name that will help us capture new markets," he says.

Tell us what you think of this story