With improving economy and increasing disposable income at hand, the consumer appliances industry is expecting better turnarounds this fiscal. The expansion of modern retail and exclusive company outlets across tier II and III cities of the country will surely lead the industry to a profitable path.
There are very few brands which carry their legacy hand-in-hand with commitment and brand awareness amongst their target group. Godrej is one such brand which has served the industry and its customers for more than a century.
In a candid conversation with Retailer Media, Kamal Nandi, Business Head & Executive VP, Godrej Appliances spoke about how the company is leveraging innovation and technology to transform the consumer appliance industry at large. He also spoke about his plans towards the helm of the company.
Talk to us about Godrej Appliances and the journey so far
Godrej Appliances is one of the largest players in the Home Appliances space in India and has always delighted the consumer with relevant technology across a wide range of products. In 1958, Godrej was the First Indian Company to manufacture Refrigerators and has now become synonymous with the category. Godrej has created many milestones in the Indian appliance space – be it in the environment/energy efficiency space, including the launch of the first green AC in the world (2012), launch of the first green refrigerator in India (2001), launch of the first 5 star range of refrigerators (2008), launch of the first inverter AC in India (2005), the first refrigerator with 6 Star Performance(2012) or a pure consumer delight space like the launch of the music refrigerator, DAC (Dynamic Aqua Power Control) Technology, Tilt drum and U-Sonic technology in washing machine or Steam Microwave Ovens and Pizza/Kebab makers in Microwave Ovens.
In recognition for its efforts, the brand has been conferred with many prestigious awards and honors such as the Consumer Super Brand Award (2011-12, 2013-14), ‘Voice of Consumer’ Award by Frost and Sullivan (2013, 2014), Reader's Digest Trusted Brand-Gold (2006,07,08,09,10,12,13), Business Super Brand (2008, 2010, 2011), ET Best Brands (2013-14), ET Promising Brand (2014-15); Consumer Super Brand (2009-10), ‘Most Innovative Company’ by Business Standard (2010), India Design Mark award for Green Balance ACs (2013) and many more. Both the manufacturing units of Godrej Appliances’ - in Shirwal and Mohali became the first and only manufacturing units in the country to be honored with the coveted Platinum Green Co certification for their efforts in green manufacturing.
Godrej’s focus on balancing consumer needs with the environmental cause has enabled the organization to redefine the technology landscape in the appliances industry – to the delight of both the consumer and the environment.
Share with us the joy of getting honoured as the ‘Man of Appliances’ from CEAMA
I am both honored and humbled to receive this award. This is a reflection of hard work and dedication showcased by the entire Godrej Appliances team. As an organization, Godrej has always been on its toes to keep pace with the times. We are constantly embracing new technology and innovations, creating a culture of strategic and innovative thinking across the organization. Identifying user insights and translating them into product innovations has been at the core of our product development process. It is this same understanding that has allowed us to consistently come up with innovations across all product categories that are beyond the existing industry benchmarks. With this motivation, we intend to make lives brighter in the coming years through sustainable technology that enhances every aspect of life.
What are the major highlights of appliances industry in 2015 and what you think awaits for 2016?
The Appliances industry remained more or less flat this year. However, the high-end segment continued to grow. Godrej Appliances also entered the premium segment this year with sub-brand NXW (Next World) and launched a range of high-end bottom-mounted refrigerators under this sub-brand. E-commerce as a channel also saw significant growth with more and more brands entering this space. Godrej Appliances also witnessed good growth in this channel.
In 2016, the Indian consumer durables sector is likely to witness demand growth due to rising income levels as well as revival of consumer sentiments. Inflation is likely to remain stable and the rural economy is expected to bounce back, given good monsoon. Consumers who postponed their purchases are expected to enter the market in 2016 and therefore, the year is expected to be better than the year gone by.
How do you plan to keep Godrej Appliances a class above its competition?
Godrej Appliances has always endeavored to develop products with technology that is ahead of its time and is relevant to the fast evolving lifestyles of consumers. This year we entered the premium segment with the launch of NXW and in the coming year, we will continue to focus on this segment. We have also expanded our product portfolio by entering new spaces such as Medical Refrigeration with the launch of Godrej Medical Refrigerators with Sure Chill technology and Mobile Food and Beverage Refrigeration with the launch of Godrej ChotuKool.
For us, Service is a key differentiator and therefore, we will continue to focus on the same. We are the first brand in the industry to launch the first branded Service offering in the industry called 'Smart Care' to deliver a delightful experience to our customers at every touch point.
Online marketplace has changed the conventional model of selling. Your thoughts on the same
Today offline channel still contributes to almost 95% of the appliances industry sales. However over the last 2 years online channel has seen a sudden surge in terms of buzz and sale. We expect the online channel to further increase their share in the coming years and capture a market share of 8-10 % across categories over the next 3 years. However, with online players trying to expand consumer base to hike up valuation, their main ammunition today is to offer best deals/price discounts to the customers, however in future there will have to focus on value proposition to the customers.
Logistics still remains a major challenge for E-commerce and E-com players are investing heavily in improving their commercial and logistical solutions. If this continues, we can expect that the reach of the E-com players and consequently brands, would also increase to a much wider level in the Indian sub-continent. Brands could also look at an Omni-channel approach where the fulfillment of orders would be done by offline dealers.
How do you plan to take the online appliances retailers?
We have developed a portfolio of online exclusive products to cater to the needs of the rapidly increasing online consumer base. With this we hope to eliminate some of the dissonance that arises between the two channels, especially in peak festive seasons. We also do not work with partners who do not respect the pricing of our products.
Investments in appliances space has been quite slow in the country. How do you take this as a challenge?
With government policies favoring 'Make in India', we expect investment to increase in the near future.
How has been the response from the growing semi-urban and rural market? Has online retailing affected these areas as well?
This year the response from rural markets has not been very good, owing to the difficult and erratic monsoon. For the consumer durables industry, logistics is a major challenge due to the bulky nature of appliances. As such, online retailing of home appliances is yet to take off in these regions in a big way.
Share with us your expansion plans
We will continue to focus on the premium segment and explore adjacent spaces for future growth. This year we have already ventured into medical refrigeration with Sure Chill and Mobile Food and Beverage Cooling with ChotuKool.
How do you see the future runway looks like?
We expect the coming year to be better than the last, especially for the cooling categories. 2016 is a big year for us. We have lined up some exciting launches with unique offerings for our discerning consumers. We will continue to focus on the premium segment with more launches from other appliance categories as well.
On the input side, we expect the key commodity prices to remain stable. However, dollar is likely to strengthen which will pose a challenge to the industry as a whole. While there is uncertainty in the global economy, government initiatives such as 'Make in India', and focus on ease of doing business in India is likely to bolster growth.
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