It is a tough market out there and perhaps tougher if you are a new entrant. It helps of course if you come with established credentials as one of the largest manufacturers worldwide. And yet, never was the market scenario as challenging as now, with consumer spend looking unstable. Precisely why the task is cut out for Suchit Kumar, previously with Kobian, who has moved on to take his new assignment as Dy. General Manager for AOC and will be managing Sales & Marketing (MENA & CIS) for the monitor manufacturer which is making its debut in the region.
Aware that PC monitors as a category has been affected by the decline in desktops vis-a-vis notebooks, the manufacturer is focusing on emerging markets, including the Middle East, Africa and CIS.
Kumar says, “Statistics indeed show decline of desktops in 2009 on overall volumes, but it’s also showing on the other hand that overall forecasted volumes will be return to normal post 2010. Of course the penetration rate of Netbooks (and also notebook) today is increasing and this has influenced the slowing demand of desktops, indirectly impacting the demand of LCD stand alone monitor as well.”
AOC therefore is investing much more resources in the emerging markets which including Eastern Europe, South America, China, Middle East, Africa and etc., that according to the manufacturer still represent significant growth possibilities for LCD monitors within the next few years.
“Besides, the company is also investing resources into TV as well as All in one PC categories, which will become key growing products for AOC within the next 5 years. Consolidating in the fast-growing TV and All-in-one PC, while on the other hand maintaining a reasonable growth rate in monitors, AOC is fully confident to face the possible decline in demand for monitors and maintain its average above 20% YoY growth,” says Kumar.
Rationale suggests that the company will ride on a strong brand name that has been around for many years and is owned by a company that has a significant share in the worldwide display market. Admiral Overseas Corporation (AOC), was established in the US in 1967and is solely owned by arguably the world’s largest display manufacturer, TPV Technology Limited (TPV). According to figures made available by the company, TPV sold over 47.6 million units computer monitors in 2008 including OEM sales, which represents 28.5% global market share of computer monitors. It boils down to the fact that every one out of four monitors sold in 2008 is a TPV monitor.
AOC, which is the leading brand from TPV, today offers a wide range of top performing CRT, LCD monitors & LCD TVs. On a year-to-year basis, the company claims it has maintained an average growth of above 20% for the past consecutive 3 years. And in 2009, AOC is targeting to sell over 20 million units globally, consolidating the sales of its owned 10 brands, like AOC, Philips etc.
AOC achieved impressive sales performance in Asia Pacific and South America. IDC AP ranked AOC second in volume in Asia Pacific in 2008 (ex. Japan) (Source: IDC AP non-bundled PC Monitor Tracker Q4 2008). AOC market share increased 2.1% from 12.2% in Y 2007 to 14.3% in Y 2008, which was the highest growth in whole AP market.
Kumar says, “AOC is positioned to be one of the major players in providing the best value display technology. With years of in-depth market experiences, strong product knowledge, keen customer insights, powerful manufacturing background, sound cost structure, and solid financial standing AOC has the key to growth in this region. AOC has started up business operations here with distributors in place for the MENA and CIS regions. We are in the process for setting up our office and other infrastructure.”
He is optimistic about the region and believes it should be able to recover faster.
Kumar says, “Although the economic recession grew stronger last quarter, this market will not face critical consequences. This is an emerging market and CRT technology fading away will benefit the development of new technologies and scope and we see space for AOC on the display business.
Kumar claims that the design and technology of AOC monitors is a highlight of the brand. AOC has launched Verfino, arguably the world’s slimmest WLED Monitor with low power consumption features targeted at premium home users, who desire ultra-slimness and exquisite industrial design.
The Verfino series are ‘ultra green monitors’. AOC also have a model 2230Fm which is with Built in DMP Engine (Digital Media Player). This is World’s first 22 inch LDC monitor with DMP Engine– play multimedia without PC. And also 100,000:1 Super high Dynamic Contrast Ratio.
A host of fashionable models targeted at small office and home office users have also been introduced. These are elegant photo frame design monitors with high gloss fashionable exteriors.
Kumar says that he is confident of creating interest with resellers who are struggling with margins as well as dropping consumer sales. The manufacturer is expected to offer margins that are competitive with what is currently on offer in the market, if not better.
He says, “We are optimistic of building a loyal channel with a customer centric and pro-active support model. Though we are new to this market, the market is not new to us as we carry the success of AOC brand achieved in other countries in short time. We have to use the same tools and resources in an adaptable manner to establish the channel and market for AOC. With a range of models with special features, margins are assured for the reseller.”
He adds, “At times of crisis, consumers look for good product with best prices. Our wide range of product provides the consumer with more options to choose the product that suits their budget and requirement. The channel and consumer in this region are looking at value for money products and with gap in price between large brands and small brands shrinking, we see wide scope.”
AOC plans to works with a few key objectives in this market. In the short term, the manufacturer hopes to develop trust and partnerships with its partners a priority. In the medium term, it seeks to increase the volume of sales as quickly as possible, and in the longer run, the manufacturer wants to build sales channels and become the most sought after monitor brand. Asbis and Compunics are the distributors that it has tied up with for the present and the partner network is likely to increase soon.
Kumar concedes, “The challenge of growing is huge. We have to make new channels, new partnership, extend the relationship with clients and distribution and retail sales chains.”
The regions which Kumar will oversee include the Middle East, Africa and Central Asia. In the longer run, the company hopes to build two sales and logistic points in Dubai and South Africa.
With different manufacturers vying for shelf space in leading power retail stores as well as other retail outlet, AOC’s challenge is cut out. The vendor is parleying with some of the leading power retailers to ensure their visibility in the retail space.
Kumar quips, “Every vendor endeavors to get their product in front of the perceptive consumer’s eyes. Power retail is a growing business and it is important to place the products here to win mindshare. We look forward to having shelf space with power retailers and will be working towards this objective.”
AOC currently does not have its own warehousing facilities in the region. The manufacturer is exploring the possibility to set up its own stocking facilities, in order to serve local clients faster and also have better flexibility on the logistics front. In the meanwhile, it is relying on the warehousing resource of its local partner located in Jebel Ali FZE, as an operations hub to facilitate delivery and logistics.
On the after sales front, the company eventually looks to extend its’ global service network to include the MEA region. Presently, AOC will be using the service channels of its partners to serve its customers. AOC is also looking to formally appoint regional and in-country third party service agencies to support services in the near future while setting up its own service centre in the region is also one of the options in the longer run.
Considerable challenges confront new entrants but monitor manufacturer AOC believes it has the muscle to sail through