Nielsen's woes over questions being raised on the accuracy of its data are not restricted to media and fast-moving consumer goods (FMCG) companies. The market research company, which has a joint venture with GFK Asia in the consumer durables space, has had frequent run-ins with companies in this segment, too.
Videocon, for instance, does not subscribe to GFK-Nielsen data, alleging the data do not capture the company's sales accurately. Officials at LG Electronics and Whirlpool say they've had long-standing issues with data provided by the research company. "GFK's coverage of rural and semi-urban areas is not robust at all. Coverage of metros is not enough because companies like ours have strong presence in rural areas," says Venugopal Dhoot, Chairman, Videocon Industries.
L K Gupta, chief marketing officer, LG Electronics India, says, "The issue is with panel constitution. It is simply not adequate to capture the entire representation of the industry. The result is the data is lopsided and doesn't match our internal assessment of market size, rate of growth or shares."
Shantanu Dasgupta, vice-president (corporate affairs and strategy), South Asia, Whirlpool of India, agrees. "There are challenges reconciling what they report with our own internal assessment of sales. We are in dialogue with them to find a way out," he says.
While GFK, which has the majority stake in the JV with Nielsen, has improved the sample size of the audit, raising it from 2,000-3,000 dealers a few years ago to about 5,000 dealers, companies say this, too, is not enough. "Definitely, the sample size is not adequate," says the head of a consumer durables company, on condition of anonymity. According to industry estimates, the number of consumer durable retailers in India, both big and small, is 30,000-40,000.
Another concern of companies is the composition of the panel. GFK covers multi-brand outlets, has started covering exclusive brand stores during the last year and a half, and has some coverage of modern retail. Companies say GFK misses out on covering big retailers. "While small retailers share their data with the market research company, larger retailers are not covered," says Gupta.
GFK-Nielsen officials could not be immediately contacted for their comments.
Vijay Sales, the Mumbai-based consumer durables and electronics chain, which has 46 stores in Mumbai, Pune, Ahmedabad, Surat and Delhi, is an example of a large retailer that does not share brand or store data with GFK. "We do not see any value in the exercise," says Nilesh Gupta, managing partner, Vijay Sales.
Another concern is the MBOs covered in the audit. "Unlike in the FMCG segment, in which retailers tend to be brand-neutral, in consumer durables, retailers have strong allegiances with brands. If one is not sensitive to this, the data is unlikely to be fair," says the marketing head of a consumer durables company. "We've problems with GFK on this count," he adds.
Companies also say there are instances of over-reporting in certain categories. "Flat panel TVs, for instance, are over-reported, while refrigerators and air-conditioners are under-reported," says LG's Gupta.