Vu is slowly but steadily rising up the ranks, in the good books of its customers, offering a viable alternative to the likes of Xiaomi and Samsung. Here's how it's doing that.
India’s television market is booming. Fueled by the rapid influx of cost-effective ‘budget’ smart televisions, India’s TV market saw its highest-ever shipment of 15 million units in 2019, according to data released by analysis firm Counterpoint Research. While Xiaomi and Samsung might be spearheading the sales and all-round growth of the segment, home-grown brand Vu Technologies is slowly but steadily rising up the ranks, in the good books of its customers, offering a viable alternative — also pushing competition to do more, along the way.
Vu has always stayed clear of the numbers game. Instead, it has let its products do the talking and apparently, people who have been buying its smart TVs, have had a knack of coming back — for more. It is this brand loyalty that Vu likes to talk about, as it likes to talk about how quality takes precedence in all its product decisions. Basis of that quality assurance and brand loyalty, Vu aspires to become the Apple of India. Financial Express Online spoke exclusively with Devita Saraf, Chairman and CEO, Vu Technologies, to understand India’s fast evolving television market and how the company is adapting to it. Excerpts.
— Vu has so far stayed away from giving out sales numbers, while your rivals keep pushing these numbers on social media, marketing campaigns, everywhere. Is that a conscious decision that you have taken?
Devita Saraf: Honestly, we are open to sharing the numbers — I am happy to share my revenue, I am happy to share our growth numbers. The problem that I have faced in the past few years is that a lot of our competition, especially from China, really wants to copy us, in terms of products, in terms of trying to poach our people and go after our distribution etc. So I have had to, in the past one year, exit all social media…I have had to stop giving too many interviews because we (found, by doing that) were just educating the competition.
I think our’s is a unicorn story in the sense of how we’ve (managed to) build a premium brand in India, that’s profitable and seeing good growth in operations. It is (really) to protect ourselves that we don’t divulge too much data even though there’s a lot of interest (in our products).
— But just to give our readers a rough ballpark figure, where do you see this brand being in comparison to the competition. Does being a home-grown Indian brand help in any way with the business?
Devita Saraf: For us, because we have a unified approach, we can keep our costs very manageable.
Our manufacturing happens largely in China and India. We’ve taken Apple’s model of keeping the product design and R&D with us. And the manufacturing happens via the world’s best TV manufacturing firm. Customer service is something that we’ve built in house, so we have 11 offices across the country where we give customer service.
With all of this in place, we can give very low operating costs. At the same time, you know, be able to buy good quality and sell it. So there is no duplication of effort that goes on. I think in a lot of other companies, what happens is that as they have grown, you know, but there’s also a lot of excess manpower, there’s a lot of tiers of hierarchy and distribution. So in all of those things, the only way you can compete is by cutting down your manufacturing costs. And then that of course, comes with quality (compromise).
We actually focus on being extremely lean as an organization. Like for example, our marketing cost is barely one to two percent of our revenue. So we keep things very tightly controlled, and make sure that if we make a savings benefit in terms of costs, we pass it on to our customers by giving good prices.
We’ve been competing with the Sonys and Samsungs for the past 12 or 13 years now. 78 percent of our business comes from metros. Last year we did a product exchange activity with Flipkart and found 57 percent of people actually gave back their Samsung and LG TVs to buy a Vu.
— Good quality could mean different things. It could be the materials that you use, or the experience that you provide, or also after sales and support. Would you say that this quality standard that you’re talking about is equal and uniform across all the three parameters when it comes to Vu?
Devita Saraf: We have a customer repeat rate of 91 percent today. Reputation is not something you can build with (just) great marketing. You can only build it by giving a very strong product and service.
Many of our competitors have this mindset, you know, that they will make money from a use and throw model like they’re doing with mobile phones. That can’t be true for a television. A TV is a very central family product. People buy a new TV for their living room and switch the (existing, if any) living room TV to the bedroom, so on and so forth.
We did a survey of our customers between 2012 and 2015 to see how many of them were still using the same TV or if they had replaced it or something. 92 percent of them are still using it.
— India’s smart television space is booming with activity currently, what do you think is the reason? Have smart TVs technically arrived in India?
Devita Saraf: The biggest change today (as opposed to two years ago) is that TVs have become a millennial product. With this resurgence of OTT content, Netflix, Amazon, etc, a lot of young people have started getting involved. Also, this generation is not a nine to six working generation. You know, people are working late hours, and many of them want to stay in on the weekends. Generally a television is a much more of a relaxation device. So unlike a mobile phone, you know, where it’s a communicative device and it’s constantly disturbing you even when you want to take a break, a TV is something that you can just sort of use to switch off from the world. Then there’s the whole entertainment thing becoming more expensive. You know, some people would (still) want to go out for a movie, but it has become super expensive.
Even if you take the current coronavirus outbreak situation, there’s a whole ‘active’ generation that has to now stay indoors to curb the spread of COVID-19. The TV naturally becomes a very good source of relaxation and entertainment in these times.
— Since you mentioned coronavirus, how is it impacting Vu — particularly manufacturing, new launches?
Devita Saraf: Thankfully, a lot of our inventory came before the Chinese New Year. We are pretty much done with our launches for the first half of the year and now anything that we will do, is going to happen not before June or July — hopefully, the situation will improve by then.
The biggest challenge now for us right now is to make sure that we have the inventory. We have our manufacturing spread across the world between India, China, Indonesia, Vietnam, and Thailand. With this (coronavirus) situation, I think everyone is going to do that, everybody would want to spread their bases instead of having all their products coming from one manufacturer.
The manufacturers who we work with, they have manufacturing in different parts of the world so we have connections all the way from Mexico and Turkey to China. These are contract based manufacturers.
— Do you intend to have your own manufacturing facilities?
Devita Saraf: Not as of the moment. If you really want to own the entire supply chain, you know, you’re not going to build an expertise in it. The same goes for expanding our portfolio. I remember, last year, every retailer of ours (online, offline) was pressuring us to do air conditioners and all kinds of stuff and they were like, you just launch a Vu AC — even if it meant making just a thousand units.
We believe our product(s) should be such that even if we remove our label, people should be able to figure out that it’s a Vu product. We might not be able to do that with an AC. Today our retailers are happy that we stuck to the core competency of being experts in one space.
— Would you be looking to explore other areas of the business considering that there’s a lot of stuff happening in the display segment now?
Devita Saraf: We do a lot of corporate work. A large part of our business also comes from TVs in offices, because projectors are on the way out and within whether it’s the Government, whether it’s retail, whether it’s shop floors, people are buying displays. We have our TVs everywhere from navy vessels to the RBI office.
As for doing other kinds of displays, like the ones you see at CES, all those products get great press obviously. But as a company we have realized there’s no point in using the press as a crutch to get a marketing hype. We will not venture into making a product that people can’t buy, like literally within 24 hours.
— Your TVs are sold online largely (in addition to offline), via channels like Flipkart. Flipkart is itself also doing a lot of tie ups with the likes of Nokia, Motorola coming out with Nokia and Motorola branded televisions. How do you see all of this?
Devita Saraf: In this industry, if you’ve stay for so many years, there’s always some entrant to make some noise, but people don’t buy a TV just because there’s a hype, you know, they want to ask around, they want to see whether people have bought it and then they (also) buy it.
As for brand licensing, as they say, you are not (just) your name. At Vu for instance, premium is something that we do — it’s our soul. You might change the brand name tomorrow, but it will still be in our soul to give innovation and quality. Just picking up a fancy name is not going to make it.
(So Nokia or Motorola TVs are not Nokia or Motorola TVs really?)
Yes, exactly, tomorrow if we give ourselves a Chinese name or a very good name, we will not change you know.
— Take us through your offline sales channels.
Devita Saraf: We have dramatically increased our offline business across the country. There’s a lot of demand for our cinema TVs, especially the larger sizes. Our 75-inch, 86-inch, and 100-inch models, that range from two lakhs to 20 lakhs, are mostly selling in the offline space because the affluent buyer still prefers to buy it offline you know. The other point is whenever there’s a family involved purchase and there are elders in the family, they get more trust from the offline space. The younger audience meanwhile tends to buy a lot more online. Vu TVs are sold via multiple partners through over a 1,000 stores across India.