What Hi Fi show 2014 is announced

[mpw]

Who determines what margin is low, what margin is high?

Everyone seems to think 20-30% that dealers get is "enough". But from dealers' perspective that is "low"? Why?

What would make it "high" or "good", or "appropriate" for them? 50%? 60%? 70%? Here they start from around 100%. That is pure greed. Specially considering that they have very little on actual demo available for audition. 100% profit for what? For drop-shipping? Sorry, if less than that seems "low" and "risky" they shouldn't be in hifi business.

Rethm example is not appropriate in the context. Topic here isn't what products people want or don't want to buy, topic is - dealers in India want huge mark up. Rethm is a product for niche market. It's low sale volume has nothing to do with it's pricing, it due to it's appeal.

===================================

hi ranjeet,

was looking forward to your photos on the whathifi show but maybe next time.. trust all izz well.

my company is a distributor for an industrial product. I speak from that experience.

Normally the selling price in India is about 2 times the "list price " and it is with a reason :-

low volumes ( for certain product categories ) ( we are not talking wharfedale 9.1 here )
import and re-export headache ( re-export comes into play when the item is to be sent back for repair )
+ selling and inventory costs
audio market - not mature enough in terms of disposable income to spend.

as regards the rethm example - it is just that an example.. rethm could be replaced with a dynaudio or a high end amphion for that matter.

In the market folks want everything at a low price and thats not possible in most of the cases including high end audio. The concept of understanding of trade-off is yet to bloom here fully. People spend money wanting everything ( rightfully so but its not possible )

as regards appeal - i think the rethm is as good an allrounder as any. Probably one of the speakers which India can be proud of having. But for this market the appeal is many times inversely proportional to the price mainly due to lack of disposable income.

Also in India - high end AV systems are slightly easier to sell ( i suspect ) rather that high end 2 channel stereo - becaus of the way the market is at the moment.

Hope i am conveying what is in my mind.

Maybe it will be better to have a D&D chip in with their views though most wont bare it all on the forum



regards
mpw
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[shafic]

good product = good price
low margin is a risk

more sales depends on the maturity of the market me thinks

the rethms are fine examples of a good product at a good price ( though we in India find it expensive even compared to international pricing ).. yet the numbers of rethms are lower as mature buyers who understand the product to exploit it are lesser ( as yet )

mpw

Yes!! Maturity of the market is an important factor. But equally important is creating awareness through marketing strategies. Also if you target only elite section of the population you cannot expect the high volumes in sales.

Both the manufacturers and dealers cannot survive with low volumes unless they keep a very big margin. It is a catch 22 situation.

The solution would be to have a range of products targeting different section of the population. More sales would bring more smiles to all parties, including consumers.Applies to both manufacturers and dealers.

This is my humble opinion based on 25 years of marketing/business experience.

the rethms are fine examples of a good product at a good price

.

That's why they have gone for global marketing.

regds,
shafic

 

[mpw]

Yes!! Maturity of the market is an important factor.

That's why they have gone for global marketing.

regds,
shafic

agree..

its a chicken and egg situation.

One needs to wait for the climate to warm up ( market to mature ) before the egg hatches..

question is who will hatch the egg ??

only father time i think.

mpw

 

[Hiten]

There is no shortage of enterprising people ready to invest serious money and keep margins low if there is a market.
There is no market for 2 channel hifi systems. Just look around. How many people one finds who listens to stereo ? Apart from forum and near and dear ones. Leave alone Hifi systems, even audio CD sales are low. There are good deals for nice hifi equipments for sale in the forum. But no buyers. Why is that ? If I was rich would/should I start up a HiFi showroom with commercial space in Mumbai with good no. of staff, pay taxes and keep good inventory to audition which may not get sold ?
Regards.

as mahesh said only time will tell if these market grows.

 

[ranjeetrain]

===================================

hi ranjeet,

was looking forward to your photos on the whathifi show but maybe next time.. trust all izz well.

Hi Mahesh,

Yeah, all is well. I screwed the schedule due to some very poor planning. I would have gotten minute details from the show. But for that I had to be there

Yes!! Maturity of the market is an important factor. But equally important is creating awareness through marketing strategies. Also if you target only elite section of the population you cannot expect the high volumes in sales.

Both the manufacturers and dealers cannot survive with low volumes unless they keep a very big margin. It is a catch 22 situation.

The solution would be to have a range of products targeting different section of the population. More sales would bring more smiles to all parties, including consumers.Applies to both manufacturers and dealers.

This is my humble opinion based on 25 years of marketing/business experience.

.

That's why they have gone for global marketing.

regds,
shafic

There is no shortage of enterprising people ready to invest serious money and keep margins low if there is a market.
There is no market for 2 channel hifi systems. Just look around. How many people one finds who listens to stereo ? Apart from forum and near and dear ones. Leave alone Hifi systems, even audio CD sales are low. There are good deals for nice hifi equipments for sale in the forum. But no buyers. Why is that ? If I was rich would/should I start up a HiFi showroom with commercial space in Mumbai with good no. of staff, pay taxes and keep good inventory to audition which may not get sold ?
Regards.

as mahesh said only time will tell if these market grows.

What I think is - my personal opinion - of course everyone may not agree. Onus is on the dealers. Even if a dealer starts in this fashion - "Okay sir, place an order with us with 10% advance and you will get the stuff at 110% US SRP." Even if a dealer starts in this fashion, he will be in a position to develop a large customer base.

Here what is happening is - based on my communication with various dealers in India (in no specific city, no specific dealer/brand).

Me: Do you have so-and-so model?
Dealer: Sorry we don't have stock. But we have this model. It's very good. I suggest you drop in for a listen.
Me: Umm thanks, but I feel the model I want will be a better fit in my system.
Dealer: Sorry, we don't have the model.

The conversation always goes like that. Be it on price, or model, or finish. They don't seem to have stock. They won't let me try a gear before I hear. In case of some brands I have even been told they can get stock on order. Means a drop shipping business model. Now, I really feel drop-shipping shouldn't attract that kind of mark up.

Shafiq, AFAIK (and always ready to accept if wrong), re-export doesn't apply for items that are being sent for repair. If duty has been paid on it once, that all you will ever pay. Yes, shipping cannot be gotten rid of.

Hiten, 3-4 years ago there was no market for 5 inch phones. 6-7 years ago there was no market for tablets. 15 years ago there was no market for portable music players. My point is - people buy stuff when they come to know about "something cool". What is that something cool? How do people come to know about it? This awareness creation is the responsibility of D/D.

My experience is - when people come to know about something better than what they have ever experienced in past, they try everything to acquire it. Even at the cost of making some sacrifices. Hifi is no different. No one who has visited this show has reported - "WOW! I saw this at the show. Mighty impressed, I'm gonna save up and buy it!"

Why is there no such experience mentioned here? Why does everyone have to portray the same mood - pensive. Frightfully expensive - is how everyone is terming the show. Shows the direction in ample light - Show was targeted at a very specific customer base.

About AV stuff taking precedence over 2-channel: Sorry but again it comes down to affordability. A typical middle class guy has INR 100k in savings. He wants to buy a good music system. He discovers a forum like this and learns that - good 2-channel systems start at 2 Lacs. But a good HT can be started from as little as 1 Lac and one that whole family will enjoy. I know, not much of a dealer's concern, isn't it? But that's the market. It is driven by the economy.

As for the maturity of market is concerned, I think it is fairly mature now. Rs 5 lacs 2-channel systems are common place now. If that were not the case, they won't bring 40-50 lac rupees speakers to the show. The market has matured, but mostly in form of a small niche market of HNIs. People for whom time is money. Who won't sit down to calculate how much will they save if they import the stuff themselves. People who will lose more money had they have to spend a few days shopping for the stuff and run around to find installers. People who visit the best looking showroom in the town, put the checkbook on the counter and say - show me the best you got.

 

[soulforged]

Me: Do you have so-and-so model?
Dealer: Sorry we don't have stock. But we have this model. It's very good. I suggest you drop in for a listen.
Me: Umm thanks, but I feel the model I want will be a better fit in my system.
Dealer: Sorry, we don't have the model.

This is still better than the recent experience I had over phone with a Dealer-distributor...

Me: I am interested in this model of speaker
Distributor: We have all the models in stock
Me: Can I have a demo?
Distributor: No
Me: Even if I come down to your city?
Distributor: No
Me: Don't you think folks in audio spending that kind of money would want an audition?
Distributor: No
Me: Why?
Distributor: Cause they sell
Me: hmmm...
Distributor: None of my dealers with provide an audition either
Me: Thanks

 

[mpw]

ranjeet,

In my view - mobiles are not the right example. I differ here.

the example of cell phones is a commodity market one. Mobiles are moving towards commoditization. Even in mobilies you will find segmentation satisfying different sections of the customer.

as far as high end audio goes - and thats what we are discussing here i suppose - the items are perceived as "luxury " and hence the market is limited to HNI's or those who save up for years to get good hifi stuff.

To the best of my knowledge - they guy who goes with the cheque book and says gimme the best you got - will be restricted to a few and more one can see in Hollywood movies. A person who does that leaves himself at the mercy of the dealer and i for one would not consider him or her as a person who knows their gear.

In the audio market - it is essential to know your gear if you want the most of it. ( IMO )

take audiogon for example - we can see n number of folks selling gear as they have more then 1 setup at home and want to try a new or different one. How many folks in India have more than 1 stereo setup ??

has the taste in music evolved more in the USA than here ?

No.

But do they have more disposable income ( or means to finance the purchase ) ??

Yes. Theirs is a different driven economy. Busing and selling is easier and so is import export.

Apart from USA and Singapore .. i dont know of any other forum ( like audiogon or echoloft ) which facilitated buy sell in a large quantum.

Those markets are mature ( more disposable income ) ( as far as hifi goes ) and we have some time to go.

mpw

 

[ranjeetrain]

There is no denying our hifi market is still in infancy compared to evolved hifi markets such as USA/UK/Japan/Singapore. Entering/exiting a system is NOT a problem in those countries. If today I want to try the Weiss sound I can't. I can't go buy a 4 lac rupess DAC and hope to sell it for 3.25 lac 3 months later if I still find my current DAC better for me. More likely it will go for 2 lacs. So I won't want to experiment as I don't want to lose 50%. The market definitely needs to mature on that front. In evolved markets people can much easily try various gear, so they have alternate equipment on standby.

Disposable income has been much common in developed world but things are changing. Developed economies are not as strong internally as they are understood to be. Even in developed world inflation has taken it's toll. Unemployment rate is on rise in many countries in the developed world. So, whereas developed world has advantage compared to us, we also have advantages. The biggest difference can be summed up like this: In developed world, hifi/gadgets is cheap but livings costs are sky high. In 3rd world hifi/gadgest might be expensive but living is dirt cheap. So if you see, in the end it evens out. Even in developed world the %age of people with disposable income is shrinking. Again, within that %age the amount of disposable income is shrinking too.

There is one more way to look at market maturity. That is in form of awareness. I speak for myself primarily here, but could also be true for many others who visited the show, I'd definitely want to be adventurous if I get things at US prices. Even if I only have a budget of 2 Lacs, if I like SF Venere that much I'll pay 2.5 and bring it home. But the moment I hear 4 lacs, I'll strike it out of my shopping list, isn't it?

The point I am trying to make is - if Indian dealers find it tough to operate at optimal costs and offer prices in the tune of international prices, they should adopt a drop-shipping model. At least for the entry and mid level stuff. For stuff that cost 50 lacs onwards if they charge premium (due to high value/slow moving item) it is understandable.

This is still better than the recent experience I had over phone with a Dealer-distributor...

Me: I am interested in this model of speaker
Distributor: We have all the models in stock
Me: Can I have a demo?
Distributor: No
Me: Even if I come down to your city?
Distributor: No
Me: Don't you think folks in audio spending that kind of money would want an audition?
Distributor: No
Me: Why?
Distributor: Cause they sell
Me: hmmm...
Distributor: None of my dealers with provide an audition either
Me: Thanks

Sounds familiar :indifferent14:

 

[panditji]

I don't understand the meaning of 'Mature market'...Firstly there is no dearth of people with money in India and there is no dearth of people who enjoy audio equipment as well ( 1.2 billion people remember???) ... There are enough people buying Rs.50,000 phones which they replace in a year or two....We have very good sales of people buying LED/LCD TVs costing more than a lakh...we have enough people buying high end cars even though they cost double the US prices...Enough people buying Rolex and other high end Swiss watches ... So we are a mature market if purchasing power is the criteria..

Now we do not have enough sales of high end audio equipment because the sellers are selling them at extremely high prices without demos with no inventories because they do not want to take the risk....

Remember, it is the sellers who have to bring the product to the consumers and educate them and not vice versa.... An example I would like to share:

Last week in HK, I went to a showroom which stocked Luxman, Accuphase, Esoteric, PMC, Spendors, Elac, Meridian etc etc...They had almost everything on demo and the prices were almost 40% of the Indian dealers atleast the Accuphase products...

Now if I can get an Accuphase e-260 for 24,000 HKD i.e. Rs. 2,05,000 which for the HK residents is not much considering their high cost of living, I will definitely buy it and maybe sell it if i do not like it...the same amplifier is being sold by the Indian Distributor at Rs. 500,000..... Why the hell should I buy here when I can go to HK and enjoy a holiday as well as get the amplifier at half the price....So it is simply the dealer's fault as they are not serious and most of them have other sources of income .....

 

[hydra]

They say that globally, the High End 2 channel market is shrinking. Magazines like Stereophile talk about the need to save the market, and that way, the industry.

But here, the dealers are killing the market by pricing equipment out of the pockets of people who are willing to buy it. I'm talking about pricing equipment way beyond a certain standard price (= US price, or price in the home market of the manufacturer). They are either blind to the fact that they are shooting themselves in the foot and killing the market, or they are looking to deliberately flog the goose that lays the golden eggs till it can't lay any eggs any more.

On a personal note, about 2 years back, I was half sold on getting a pair of Harbeth P3ESRs, until I heard the Malaysian prices, and the Indian prices. I had a nice laugh and I moved on. And soon enough, I found exactly what I was looking for, right in my city. If I hadn't found what I wanted at a good price to performance ratio, I'd have stuck to what equipment I had previously.

I'm an average guy with an average income. I've now spent far more on my system now that I'd have dreamed of doing when I started this hobby seriously. There are lots of people like me out there, who are getting put off by the insane prices being bandied about. The more people the greedy dealers discourage, the more the potential buyers they are getting off the market.

And a few years of this will kill the market altogether. Portable audio has already killed most of the serious 2 channel market. Greedy dealers will take care of the rest.

PS: No offense intended to portable audio enthusiasts

 

[Thad E Ginathom]

Good product + reasonable price + low margin + good service = more sales.

Ahh... the equations! But, of course, I'm not denying them, in fact I would like to add to yours! More sales means more people experience the equipment, and want to buy too. More sales at a lower margin may seem to some dealers like doing more work for the same money, but if they realise that, in the long term, the market itself gets bigger, then they could be on to a winner.

This is still better than the recent experience I had over phone with a Dealer-distributor...
... ... ...
Me: Don't you think folks in audio spending that kind of money would want an audition?
Distributor: No
Me: Why?
Distributor: Cause they sell
Me: hmmm...
Distributor: None of my dealers with provide an audition either
Me: Thanks

This is astonishing. Car dealers are hardly the most popular people in the world ---internationally--- but how far would they get without test drives. The very idea of a hifi dealer that sells hifi without demo is actually beyond ridiculous unless it is a cut-prices-to-the-bone bulk box shifter where the buyer likes the bargain and takes their chance. And even UK's Richer Sounds offer demos.

I am not sure;
If that dealer in question - from Bangalore - has a Dealer in Mumbai ?
Well if he does - I am not aware of that besides, I have never contacted him for anything - because there was nothing I needed that was sold by him.
I am certain that all D & D's have dealers & those 'dealers' [all over the country] are 'covered' with 20 % to 30 % margin for any / all the audio gear that they sell...

bhagwan, my comment was general, and very non-specific. Maybe the person I was answering had a particular dealer in mind, but I did not.

... Why the hell should I buy here when I can go to HK and enjoy a holiday as well as get the amplifier at half the price....So it is simply the dealer's fault as they are not serious and most of them have other sources of income .....

It's the story of my desired (but not yet bought) head-phone amp. 80K to 100K is hardly low end for a headphone amp. It sells for approx 800 in UK. I'd get the trip too.

The thing is, I'm almost certainly never going to buy one, but another thing is, dangle it in front of my nose at a price very close to the European prices, and I'm afraid that I might well be worrying about what to tell Mrs G after handing over the card details . Even without a demo.

You don't get many crazy can't-resist-it impulse buys when the potential customer sees a doubled price.

 

[mpw]

There is no denying our hifi market is still in infancy compared to evolved hifi markets such as USA/UK/Japan/Singapore. Entering/exiting a system is NOT a problem in those countries. If today I want to try the Weiss sound I can't. I can't go buy a 4 lac rupess DAC and hope to sell it for 3.25 lac 3 months later if I still find my current DAC better for me. More likely it will go for 2 lacs. So I won't want to experiment as I don't want to lose 50%. The market definitely needs to mature on that front. In evolved markets people can much easily try various gear, so they have alternate equipment on standby.

Disposable income has been much common in developed world but things are changing. Developed economies are not as strong internally as they are understood to be. Even in developed world inflation has taken it's toll. Unemployment rate is on rise in many countries in the developed world. So, whereas developed world has advantage compared to us, we also have advantages. The biggest difference can be summed up like this: In developed world, hifi/gadgets is cheap but livings costs are sky high. In 3rd world hifi/gadgest might be expensive but living is dirt cheap. So if you see, in the end it evens out. Even in developed world the %age of people with disposable income is shrinking. Again, within that %age the amount of disposable income is shrinking too.

There is one more way to look at market maturity. That is in form of awareness. I speak for myself primarily here, but could also be true for many others who visited the show, I'd definitely want to be adventurous if I get things at US prices. Even if I only have a budget of 2 Lacs, if I like SF Venere that much I'll pay 2.5 and bring it home. But the moment I hear 4 lacs, I'll strike it out of my shopping list, isn't it?

The point I am trying to make is - if Indian dealers find it tough to operate at optimal costs and offer prices in the tune of international prices, they should adopt a drop-shipping model. At least for the entry and mid level stuff. For stuff that cost 50 lacs onwards if they charge premium (due to high value/slow moving item) it is understandable.

Sounds familiar :indifferent14:

=========================================================

a. agree with you on the first para

b. unemployment is not the topic here. All said and done, they have more cash in their wallets than we have in ours ( as far as audio goes ). For all else in life only the swiss banks will know

c. the index of slow moving items starts in the indian market for hi-fi at 1 lac or 1.5 lac and not at 50 lac ( IMO ) and therefore your premium logic starts kicking in at 1.5 lac and above.

d. Hi-fi is still considered not a good investment in RoI terms in india. Folks will happily buy a new BMW or a expensive gadget / phone - to show off to their colleagues / business partners / impress the ladies etc.. :lol: but i dunno if anyone bought an audio system to show off. Ofcourse there are always exceptions and they will be in the outlier here.

mpw

 

[ghatgepatil]

@ mpw ... any 'exceptions' that you have met .. come across ? Good to know of them.

 

[mpw]

GP,

have heard of them.. a very hifi system worth millions in a tier 2 city in India that would be probably the envy of many many audiophiles in the world - if not in terms of sound - in terms of spend power.

i do not know anyone there and am not in that circle so i have absolutely no chance of a visit there.

Maybe senior FM's can enlighten further ( w/o being off topic )

There will be more .. and that explains why systems costing 90 lac to a crore are on display at the what hifi show. many homes in SoBo or Delhi would be having top of the line rigs in terms of spend.

Of these rigs we hardly know of..

There was a post by a gentleman from orissa few months back and someone mistook the brand he owned and it turned out that the brand being referred to was top of the line
( i forget the name ).

The point here is that you will find rolls royces in the most unusual of places.

but they will be few in number and are not the market we are referring to in this discussion.

mpw

 

[Hiten]

Just to be clear. I have no affiliation to any dealer or product. My post was general thoughts that came to my mind.

I doubt if anyone would be interested in spreading the awareness of two channel HiFi. A vague point I am making is we were probably bought up with Beatles, Kishore Kumar etc. along with golden period of High Fidelity. The Music and electronics attracted us to this hobby. But new kids have moved on.(God bless them) Their tastes are different. Short Shelf life of music and gadgets is the norm. As long as they are happy and enjoying life I dont see any increase in market of Hifi as we would like to see it.
Regards.

 

[mpw]

hitenbhai,

the topic / issue is the pricing of hifi ( stereo ) in India.

Yes - maybe in the past 5 channel ( now we talk of 7.2 or 9.2 !! ) HT was not available or prevalent and 2 channel was the thing to be in. There is a valid point you make.

mpw

 

[bhagwan]

GP,

have heard of them.. a very hifi system worth millions in a tier 2 city in India that would be probably the envy of many many audiophiles in the world - if not in terms of sound - in terms of spend power.

i do not know anyone there and am not in that circle so i have absolutely no chance of a visit there.

mpw

Yes;
This is in Jaipur.
I have been there 3 times.
This is a 1M USD ++ Set Up !
Mr. Putin & his PM have the same [exact] set up - with the exception of the Digital Front End & the Company Person that visits this room states that the room in Jaipur plays better than those in Russia.

I am not supporting or negating any point that any FM is making - I am just filling in the 'blanks' that MPW has left.

I apologise for OT.
:sad:

 

[nosortf]

From show report to dealer bashing, wow.
All you men are very passionate about audio that you would want the best deals.
Comparing prices to international retail is fine, demanding it is also cool.
Suppose if this were possible even after all the 35% duties and charges, plus local taxes etc and D/D margins, how many of you would honestly go to an Indian dealer and pay him Rupees 84k for something that would cost Euros 1k without bargaining and dealer squeezing?
Want to know if any of you guys have bought a Euro 1k product at Rupees 84k without bargaining in India, that "Dekh lo yaar, kuch best final kar lo," nonsense.

If not, this conversation is pointless, move on.

 

[bhagwan]

Dear FM's

I do not want to be mis understood;
But this Thread is about What Hi Fi Show.

We need to discuss the Show / Products / Sound etc.

Why do we get into Commercials ?
I do not understand this....

Let me give you an example;
In the lobby of the Leela @ Gurgaon was a White RR Car.
I Cannot Afford to buy it.
Maybe I will never sit in 1 [actually I have] - not important.
So if it costs 5CR or what ever - how does it matter ?

Why do we not just appreciate what we are seeing ?
Listening to & thank the D & D's for their efforts.

They come from different cities - all over India - carry their goods into Gurgaon / Take Rooms - Set the gear up - so that we can experience it.

We should be thankful.
We should make an effort to go & visit the show.
Meet people.
Listen to Music.
Talk about audio etc.

Why do we get into cost & commercials ?
How does it matter ?

Are we going to buy ?
The Steinway & Lyngdorf HT was @ 70 Lacs - even if the D & D gave it to us @ 50 % off - who amongst us will pay 35 lacs for it ?
So, this entire discussion about prices etc. is not appropriate in this thread.

Sure, we can talk about it - start a new thread & discuss it there.

Here we should discuss the show.
The Display
The Sound
The Experiences
etc.

Basically it was a 'celebration' for me at least.
Meeting like minded people.
Listening to so much audio gear - under 1 roof etc.

Gentlemen - Please;
Let us try and get +ve about this.

Spend time to listen to Music.
Appreciate Audio.

There is so much pleasure there to be had & derived from this hobby of ours.
Why do we run the efforts of others down ? Let us try and refrain from doing that. I request you.

Have a lovely day & a super week end - all of you !! :licklips:

 

[Hiten]

hitenbhai,
the topic / issue is the pricing of hifi ( stereo ) in India.

Ahh. OK. I don't know how that works, so can not comment precisely. I was just assuming costs involved in HiFi showroom in earlier post. Which led to future market of HIFI. Having said that, there must be valid and honest reason a seller/dealer having particular margin. Difficult to think that he/she is not aware that a product is selling for far less in other countries or even in other city.
Regards.