“Over offline, online has emerged a better distribution channel for small domestic appliances”: Sachin Goel
In an exclusive conversation with Sachin Goel, CEO, Amerex Pvt Ltd (Parent company of Westinghouse) sheds light on growing market of small domestic appliances.BY Shipra Srivastava | January 02, 2018 | comments ( 0 ) |
How do you see the small domestic appliance market in India which so far is highly unorganized and fragmented transforming into organized trade?
Yes I do agree the market is fragmented, even if you trace back the journey of top brands which are operating for a quite while now, they too are operating with wide variety of products and just not small domestic appliances, for example, most of the electric companies are into small domestic appliances. Though, there is a lot of scope for the newer brand because consumption is increasing with the ever-changing lifestyle of customers.
The dependence on gadgets and customers is increasing and kitchen being the centre of every house, this part of the house is also becoming more and more appliance and gadget centric. Thus, all these factors are propelling growth in this segment. The key to success in this segment is, contain product innovation along with a value preposition to customer.
Do you think distributions channels are also evolving equally? Kindly shed light on your journey and distribution model?
We are the India license of US based Westinghouse which is more than a 100 year old company. I do agree the distribution is equally fragmented that is the reason we took reverse strategy. We started online so we can present across all consumers who are willing to shop online. This channel allows us to reach our consumers directly without any local distributor involved. We started off line strategy only after thoroughly covering the online channel. So far, we are present in Northern and some parts of Western regions by appointing offline distributors. We have about 50 distributors in these two markets. Going forward, we are looking to present in Southern and Eastern markets.
Apart from local distribution, are you also thinking over owing an exclusive retail store?
As of now, there are no plans of starting exclusive offline distribution. However, we may think of having exclusive offline store over next three four years. Moreover, if you look at any small domestic appliance company their portfolio does not support exclusive outlet because of small ticket size. However, we would be keen to present with large format retail chains such as Big Bazaar, Hypercity, etc. as the part of expansion strategy. Online is emerging as a very good channel as far as distribution for small domestic appliances is concerned. We would continue to focus on this channel. Also, we may have our exclusive webstore in near future.
How is your experience working with local distribution? What kind of margins they are earning with your company?
Offcourse, being a new brand it is challenging working with local distributors because they purely work on predefined incentives. And, they tend to be partial with the brand which offers them higher incentive. The biggest challenge that we are facing is, even the local distributor is require to sell it first to retailer, and being a newer brand they also expect some sort of leverage. Retailers do welcome new brand is their margin is secure and product range is worth the money along with a very good customer support.
Moreover, every distributor is a unique party and we have to look through their requirements individually, for example, few may require extra manpower, whereas other may require extra incentive. So we have to deal it with local strategy only. We cannot have uniform strategy for all. We offer 8% to 10% margin which varies market to market.
Kindly shed light on your product range along with pricing strategy?
We have about 35 models currently into blenders, choppers, irons, streams, OTG etc. In terms of pricing we are very competitive to any leading brand including Phillips, Murphy etc.
What kind of marketing strategies the company is working upon to increase the brand awareness?
We are working on market fundamentals; where our product is placed, the dealer or seller should be the confident about our product, quality, price, etc. Same time, we are looking to present at all leading retail shops to support our mega advertising initiatives. Though our consumer base is small, but we are firm believer of Word-of-mouth marketing. We are ready to put all sort of efforts for the positive feedback of the customers.