LCD TVs Won’t Face a Cold Russian Winter
Despite terrible economic conditions, Russians view flat panel TVs as a status symbol.
Russia, the world’s largest country by size, is facing very hard times due to the ongoing financial crisis gripping the globe. The domestic currency, the ruble, took a huge hit during the past year, dropping 25 percent in value. The nation’s stock markets have retracted more than 30 percent in the past year as oil and commodity prices have plunged.
But there is one segment of the Russian economy that is thriving: sales of Liquid Crystal Display-Televisions (LCD-TVs).
Television represents the key segment in the Russian audio and video market, accounting for more than 60 percent of its total value. For 2009, iSuppli Corp. forecasts an approximate 13 percent decrease in the total number of television shipments to Russia due to the downturn. However, LCD-TV shipments are expected to rise by 13.6 percent for the year.
Fast Growth
LCD-TVs are the only segment of the Russian TV market that is expanding. LCD-TVs accounted for 60 percent of total television sales in Russia in 2008. In comparison, shipments of Plasma Display Panel-Televisions (PDP-TVs) and Cathode Ray Tube-Televisions (CRT-TVs) continue to decrease, with market shares for both technologies expected to decline to approximately 7 percent by 2013.
Meanwhile shipments of LCD-TVs in the nation are expected to grow to 9.6 million units in 2013, up from 4.4 million units in 2008. LCD-TV shipments will rise at a Compound Annual Growth Rate (CAGR) of 16.8 percent, with revenues increasing to $5.7 billion by 2013, up from $3.1 billion in 2008, for a CAGR of 12.8 percent.
While the 32-inch size dominates shipments as an ideal upgrade or first television, the larger-sized TVs are becoming trendier.
Status Quo
One of the main reasons for the switch to LCD-TVs in Russia is that they have become a status symbol. Consumers in Russia are very image conscious and prefer to own televisions that they can show off to neighbors and family members.
Branding
Among brands in Russia, South Korean OEMs are in a winning position because of their strong brand recognition. Furthermore, the South Korean OEMs also have domestic production capabilities and vertical integration—factors that allow them to have better control over their costs and prices.
As far domestic Russian brands go, they are suffering from a lack of financial assistance as well as the absence of branding. However, with a strong marketing strategy and the capability to be price competitive, Russian brands could challenge global OEMs in the domestic market.
Russia, the world’s largest country by size, is facing very hard times due to the ongoing financial crisis gripping the globe. The domestic currency, the ruble, took a huge hit during the past year, dropping 25 percent in value. The nation’s stock markets have retracted more than 30 percent in the past year as oil and commodity prices have plunged.
But there is one segment of the Russian economy that is thriving: sales of Liquid Crystal Display-Televisions (LCD-TVs).
Television represents the key segment in the Russian audio and video market, accounting for more than 60 percent of its total value. For 2009, iSuppli Corp. forecasts an approximate 13 percent decrease in the total number of television shipments to Russia due to the downturn. However, LCD-TV shipments are expected to rise by 13.6 percent for the year.
Fast Growth
LCD-TVs are the only segment of the Russian TV market that is expanding. LCD-TVs accounted for 60 percent of total television sales in Russia in 2008. In comparison, shipments of Plasma Display Panel-Televisions (PDP-TVs) and Cathode Ray Tube-Televisions (CRT-TVs) continue to decrease, with market shares for both technologies expected to decline to approximately 7 percent by 2013.
Meanwhile shipments of LCD-TVs in the nation are expected to grow to 9.6 million units in 2013, up from 4.4 million units in 2008. LCD-TV shipments will rise at a Compound Annual Growth Rate (CAGR) of 16.8 percent, with revenues increasing to $5.7 billion by 2013, up from $3.1 billion in 2008, for a CAGR of 12.8 percent.
While the 32-inch size dominates shipments as an ideal upgrade or first television, the larger-sized TVs are becoming trendier.
Status Quo
One of the main reasons for the switch to LCD-TVs in Russia is that they have become a status symbol. Consumers in Russia are very image conscious and prefer to own televisions that they can show off to neighbors and family members.
Branding
Among brands in Russia, South Korean OEMs are in a winning position because of their strong brand recognition. Furthermore, the South Korean OEMs also have domestic production capabilities and vertical integration—factors that allow them to have better control over their costs and prices.
As far domestic Russian brands go, they are suffering from a lack of financial assistance as well as the absence of branding. However, with a strong marketing strategy and the capability to be price competitive, Russian brands could challenge global OEMs in the domestic market.
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