Consumer electronics giant Philips on Monday said it has outsourced its entire TV business, including manufacturing, distribution and selling, to Venugopal Dhoot-led Videocon industries.
“The brand licensing agreement under which Videocon assumes responsibility for the sourcing, distribution, marketing and sales of all Philips’ consumer television activities in India is aimed at bringing the TV business back into profitability from 2010 onwards,” said Murali Sivaraman, managing director and CEO, Philips Electronics India.
He said the agreement is only limited to TV segment and is for five years.
Few years ago, Philips had entered a similar arrangement with Japanese firm Funai for their TV business in the US, which proved to be very successful, and the company has decided to replicate the idea in India, Sivaraman said.
“Videocon will ensure that consumers of Philips-branded TVs can continue to count on the same premium quality, design and innovation associated with the Philips brand,” he said.
The Netherlands-based company, which is operating in India for over 80 years, had earlier announced a strategic shift in focus on healthcare and life-style segment to promote its products in the country.
“Voluntarily, we have taken a position that Philips as company would be working towards projecting itself as a health and wellness company,” Sivaraman had said last year.
The company is now focusing more in the lighting and healthcare segment. In lighting segment, it has 35 per cent marketshare and is constantly trying to increase its presence in the healthcare segment.
Over the last few years Philips is losing its share in the colour TV market in India to Korean firms such as LG and Samsung.
Videocon officials couldn’t be contacted for comment.
Asked about the boost in sales through this agreement Sivaraman said, “because of the large sales and distribution network which Videocon has, we expect a significant increase in sale of Philips TVs in India.”