An interesting article on KEF products pricing

[tuff]

Just browsed through this article. Are we also in a similar boat when it comes to pricing?
EXPOSED: KEF Price Gouging, Hi Fi Gear in OZ | channelnews

 

[RajithKumar]

Just browsed through this article. Are we also in a similar boat when it comes to pricing?
EXPOSED: KEF Price Gouging, Hi Fi Gear in OZ | channelnews

Hi based on my experience, I can say that most of the AV product sold in India is around 30 to 40% costlier than the price sold in US and UK.



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[Amitkg]

Yes, we are. This issue was raised by some of our forum members many times.
For instance, Debut is a budget line-up from Elac but its pricing in India makes it 'premium'. Though brands like Dali, Wharfedale, Polk, Cambridge Audio are at per in terms of US/UK pricing. In India, brands pricing is dictated by distributors. Distributors/Dealers keep huge profit margin and they blame it on taxes, duties and other incidental charges. But the point is, in US, companies also pay taxes; in US /UK, dealers-distributors also pay taxes and make profit. I have seen a product that is being sold in US for 299USD, is being sold in India for 45K INR. Some section might say that in US, profit is driven by volume of sales, whereas in India Hi-Fi market is still niche; majority of Indian middle-class/ upper middle class still keep their faith in mainstream Sony/Samsung/LG/Philips made single box or 5.1 box offerings. But unless Indian dealers, distributors work in tandem with Hi-Fi Brands to make pricing competitive, sales in India will never pick-up.

 

[dr_rocket]

Tannoy tfx 5.1 available in UK for 179 GBP = INR 15000, mrp India INR 45000
Tannoy HTS 101 XP, UK mrp 599 GBP, available at 339 GBP=INR 29000, India mrp INR 68000
Polk tl1600, US mrp $399, available at $299=INR 21500, India mrp INR 42000

This is in the budget range only.

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[drkrack]

Tannoy tfx 5.1 available in UK for 179 GBP = INR 15000, mrp India INR 45000
Tannoy HTS 101 XP, UK mrp 599 GBP, available at 339 GBP=INR 29000, India mrp INR 68000
Polk tl1600, US mrp $399, available at $299=INR 21500, India mrp INR 42000

This is in the budget range only.

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There are many things cheaper in India vs USA . Employing household workers to do daily chores so that you can spend more time listening to music is much cheaper in India. For eg, Atorvastatin most commonly prescribed anti cholesterol drug is at least 10 times cheaper in India compared to USA.

Essential commodities are cheaper in poorer countries with low per capita income (at least on paper we're a poor country , not talking about black economy) ; whereas luxury commodities (will be heavily taxed to maintain social justice point of view etc) are usually much costlier in poorer countries. We need not feel bad about it.

 

[dr_rocket]

There are many things cheaper in India vs USA . Employing household workers to do daily chores so that you can spend more time listening to music is much cheaper in India. For eg, Atorvastatin most commonly prescribed anti cholesterol drug is at least 10 times cheaper in India compared to USA.

Essential commodities are cheaper in poorer countries with low per capita income (at least on paper we're a poor country , not talking about black economy) ; whereas luxury commodities (will be heavily taxed to maintain social justice point of view etc) are usually much costlier in poorer countries. We need not feel bad about it.

Can't agree with those points.

1. This hike is not uniform. Dali zensor 1 pair. Amazon.de price 290 eur=20000 INR, India MRP INR 23700. So a lot depends on the importer.

2. For shipping and customs upto 40% can be added. But 2-3 times is too much

3. Medicines are cheaper here because of generic indian companies, not because of govt subsidy (not talking about free drugs in govt hospitals). Same applies somewhat to hifi also. Sonodyne, Norge, etc are cheaper as compared to comparator imported products, though opinion on quality is widely variable.

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[Amitkg]

There are many things cheaper in India vs USA . Employing household workers to do daily chores so that you can spend more time listening to music is much cheaper in India

Yes, you are right. I still remember Indian diplomat Devyani Khobragade not paying ' the minimum legal wage' to her domestic help in U.S.

whereas luxury commodities (will be heavily taxed to maintain social justice point of view etc) are usually much costlier in poorer countries. We need not feel bad about it.

Yes, Hi-Fi ( even Mid Hi-Fi) will continue to remain 'niche'

But are you sure, that it's only govt duty and tax that make Hi-Fi AV gears' cost dear?

 

[panditji]

But the customs is levied on the distributor price and not on the MRP price...

 

[Naturelover]

The price markup is not only taxation but distributor margin as well. There are one or two dealers in India who do sell imported hi-fi products close to European prices.

 

[sidvee]

My take on this is very simple - if a distributor overprices their products then that product will have a very limited sales potential regardless of how good it sounds and eventually the distributor is changed because the manufacturer is not happy with the sales volumes or the product is withdrawn entirely from that market.
Consequently high end market in India is very small and dynamic. Products keep coming and going. I have seen at-least 4-5 decent high end brands withdrawn from the market and exiting the country entirely in the past 2 years due to slow sales and I have seen 2-3 brands change distributors.
Lastly I disagree on the term price gouging. If a product is a life saving drug that is manufactured by only 1 company and that company decides the double or triple prices (like one company in US that was charging 700% more for a drug after it bought the brand from another company) then it is definitely price gouging. OTOH loudspeakers that are priced double, and are just disposable income purchases can hardly qualify in the category of price gouging products. Simply buy something cheaper, no one is putting a gun to your head to buy these.
Cheers,
Sid

 

[panditji]

I agree with Sid here... In the end, it is the distributors loss only when they price their products higher as they lose additional revenue and profits... India has a huge population which is fond of music and equipment but it is the job of the distributors to make their products available at fair prices...

In today's super competitive world, everyone has access to information and I know of enough people who buy equipment abroad at cheaper prices because of the attitude and exhorbitant prices of the Indian distributors...

One thing I don't understand is why have retailers for higher end products when none of the retailers ever stock those products.. Instead, it is better to sell direct and have a reasonable return policy by which you eliminate the middlemen and keep costs low and also ensure that the customer tries your product...

 

[sidvee]

We are being looted taking advantage of our love for hi fi. And unfortunately we have no other go. Even in case of used market, the sellers are screwing us with whatever price they wish

@preth30,
As I said before, I really don't understand this. Looting would imply that someone is compelling you to hand over your hard earned money by force for a product at an exorbitant price and not allowing you to buy any other product at a cheaper price, whether it is new or used. What is preventing you from buying another cheaper audio product? This is a free country - you can buy what you like, and if you don't want to feel cheated then don't buy the exorbitantly priced product. In a free market economy, the market will dictate the price - whether it is high or low is just a perspective.

Cheers,
Sid

 

[Amitkg]

.... Simply buy something cheaper, no one is putting a gun to your head to buy these.
Cheers,
Sid

It's not about cheaper or costlier, it's about how price of AV gears are being jacked-up for due and undue reasons.

 

[sidvee]

It's not about cheaper or costlier, it's about how price of AV gears are being jacked-up for due and undue reasons.

And cars/clothes/apartments-villas/shoes/jewelry/alcohol/diesel/petrol/eating in restaurants/taxes etc. are not "jacked up" but fairly priced? I can add a thousand items to that list.

Cheers,
Sid

 

[RajithKumar]

I understand Hifi audio market in India is comparatively low than other countries. But still, if you want to have a average Hifi system, minimum spend should be approx 50k in my opinion . No common man wills to spend that. If Hifi audio needs to penetrate larger market here, the prices should come down to affordable ranges and of course good marketing required. Some sort of direct sales arrangement can be made avoiding multiple dealers so that the price at the customer end is reduced.

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[Amitkg]

And cars/clothes/apartments-villas/shoes/jewelry/alcohol/diesel/petrol/eating in restaurants/taxes etc. are not "jacked up" but fairly priced? I can add a thousand items to that list.

Cheers,
Sid

Probably, I can add more than that; but we are not discussing cars/clothes/apartments-villas/shoes/jewelry/alcohol/diesel/petrol/eating in restaurants/taxes.

 

[sidvee]

Probably, I can add more than that; but we are not discussing cars/clothes/apartments-villas/shoes/jewelry/alcohol/diesel/petrol/eating in restaurants/taxes.

Ok you are absolutely right - AV gears are jacked up for whatever reasons. It is a very serious issue. I stand corrected.
Cheers,
Sid

 

[drkrack]

My take on this is very simple - if a distributor overprices their products then that product will have a very limited sales potential regardless of how good it sounds and eventually the distributor is changed because the manufacturer is not happy with the sales volumes or the product is withdrawn entirely from that market.
Consequently high end market in India is very small and dynamic. Products keep coming and going. I have seen at-least 4-5 decent high end brands withdrawn from the market and exiting the country entirely in the past 2 years due to slow sales and I have seen 2-3 brands change distributors.
Lastly I disagree on the term price gouging. If a product is a life saving drug that is manufactured by only 1 company and that company decides the double or triple prices (like one company in US that was charging 700% more for a drug after it bought the brand from another company) then it is definitely price gouging. OTOH loudspeakers that are priced double, and are just disposable income purchases can hardly qualify in the category of price gouging products. Simply buy something cheaper, no one is putting a gun to your head to buy these.
Cheers,
Sid

Completely agree, I doubt distributers are completely responsible for this, of course lack of proper audition is mostly their responsibility, but pricing is controlled by the company I believe. There was detailed discussion about iphone price being 10k costlier in India on economic times a year ago ; it was very clear that Apple owning a niche market controlled the prices even for 2yr old models. Distributors know that people have many means nowadays to get products at a cheaper price from abroad if the difference is more than 30%.

Somehow American companies like Klipsch and Kef have such a huge disparity in pricing indicates a company policy rather than local distributors. Polk and Kef in India are handled by the same distributor, but difference isn't much for Polks.

If we start voicing our opinion strongly in public forums like this, Manufacturers will have to listen and mend their ways.

Can't agree with those points.

1. This hike is not uniform. Dali zensor 1 pair. Amazon.de price 290 eur=20000 INR, India MRP INR 23700. So a lot depends on the importer.

2. For shipping and customs upto 40% can be added. But 2-3 times is too much

3. Medicines are cheaper here because of generic indian companies, not because of govt subsidy (not talking about free drugs in govt hospitals). Same applies somewhat to hifi also. Sonodyne, Norge, etc are cheaper as compared to comparator imported products, though opinion on quality is widely variable.

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I just wanted to highlight the fact that, majority of other things are cheaper in India compared to USA. Albeit certain electronics or audiophile products are costlier here but that's entirely due to a company policy.

I'm fed of listening to the stuff like Americans or Europeans are luckier than Indians because some X product is available cheaper by 40% for them. We do not realize so many things are available cheaper to us. Not only local products many of McDonald's, Pizza hut, Pepsi, Coke products are cheaper here.

Yes, you are right. I still remember Indian diplomat Devyani Khobragade not paying ' the minimum legal wage' to her domestic help in U.S.






Yes, Hi-Fi ( even Mid Hi-Fi) will continue to remain 'niche'

But are you sure, that it's only govt duty and tax that make Hi-Fi AV gears' cost dear?

I'd like to live in country where I can enjoy my music leisurely on Sunday with affordable speakers rather than wasting the only free day vacuuming, dish washing, mowing the lawn when my high end speakers (which are cheaper than everywhere else) eat dust. Its just my thinking not meant to offend anyone thinking otherwise.

 

[sidvee]

If we start voicing our opinion strongly in public forums like this, Manufacturers will have to listen and mend their ways.

That is an optimistic view drkrack. I hope it helps. I myself used this tactic when I was getting screwed over some damaged acoustic panels but at the same time I also had some European manufacturers who showed me the proverbial middle finger when I tried to suggest that I will voice my opinion. They told me that the Indian market is so small they wouldn't care anyways. Nowadays when I buy expensive products, I not only look for a good price but more importantly proper after sales service. What is the point of getting 20% off a 3 lac product when if anything happens to the product after the 1 year warranty product, you are told to buzz off (mild word to say the least - the word in my mind started with a F). It will end up becoming an expensive paperweight.
Cheers,
Sid

 

[drkrack]

I Had a pretty bad experience with under warranty Denon AVR 3 Yrs ago, when Warranty claim to change HDMI Board was denied, saying it is a Voltage fluctuation and I had to cough up the cost of the board, since then I've stopped buying from so called authorized dealers totally.

This is one of the incident which happened recently which I'd like to bring to the notice of forum members (I'd avoid taking names for the sake of privacy concerns) .
I routinely buy AV stuff from a grey market dealer (Very senior and reputed person doing this since last 20yrs, who offers 40% discount easily) who is pretty well acquainted with me, I saw a brand new Sealed Denon and Marantz High end AVR at his house along with Brand new looking Jamo 626 Towers. Somehow, The serial number of Sealed Denon AVR I could easily remember because it had last five digits identical to my phone number. My dealer always boasts that many authorized HiFi dealers buy stuff from him and sell it later as a genuine piece with invoice , which I always used to think that "Fekh raha hai " ! He quoted 1L for Kef Q900 and C200 which he got from Dubai and Singapore etc..

A week later I visited a reputed Authorized HiFi dealer in Hyd for auditioning some other speakers for a friend of mine. I saw similar looking Jamo 626 FS with him, I curiously asked the dealer ? do you deal with Jamo too ? He says though we are not authorized to deal with Jamo in Hyd, we arrange any brand on customer preorder. It will come with a Genuine warranty and invoice so no need to worry ! Much to my surprise the sealed Denon AVR was lying there , with unforgettable serial number !!:yahoo: . Eureka !!, Authorized dealers buy stuff from grey market and sell with invoice. The Authorized service center guys are obviously been paid to rectify minor repairs during warranty period and if anything major is required ; Blame it on consumer and ask him to Pay up. Fearing a costly dead paperweight, they'd end up getting duped for the second time !hyeah:

Another incident , My friend had found a 1.5yr old Wharfdale Jade 5 offering at 1L on a OLX ad. We met the individual for auditioning, the FS had the small veneer chipped at 2 places but was functioning perfectly fine. Since my friend for whom I was looking for wharfdales wasnt ready to pay more than 60k and the seller wanted 80k; deal didn't materialize. Few days later we found the same Towers in a very reputed showroom for sale. He was ready to sell them with deep discount at Rs 1L per Pair (as they were showroom Demo pieces; he tried to convince us as the reason for chipped veneer) with invoice and 1yr Warranty hyeah.

These incidents have shook my whatever remaining belief in "authorized dealer stuff and warranty" in pity state of consumers in India. One of the service center guy said that The company never denies warranty in India for any stuff bought anywhere in the world with a genuine invoice authorizing the date of purchase; But it is the Indian distributors who insist such sanctions on service guys , to benefit themselves. There are numerous instances when a consumer emailed the company and got repairs done under warranty when local service guys refused it.

My grey market dealer was right: there is no definite supply chain system which is adhered in distribution in India by our authorized dealers , they'll buy and sell in whichever mode benefits them.