Inflationary trends in commodity prices and the second wave of COVID-19 would impact consumer sentiment in the short term but consumer electric goods maker Havells India is confident of the medium to long-term demand trends, its Chairman and Managing Director Anil Rai Gupta said.
Now consumer preferences are changing towards reliable and quality brands, creating a unique opportunity for organized players driving premiumization with products that are feature-led, energy-efficient, and have a digital footprint, Gupta said in the company's latest annual report.
The company is working on product development and emerging consumer trends and believes alternate sales channels such as online and modern format retail (MFR) will gain relevance in the coming years.
Havells is also expanding its network in semi-urban and rural markets with suitable changes in its product range to make it more relevant and affordable.
Gupta said, "The challenge related to inflationary trends in commodity and the second wave of Covid-19 might affect consumer sentiment in the short term. However, we are confident of the medium to long-term demand trends. With strategic building blocks in place, strengthening the core, broadening our portfolio, and investing in people and process capability, we are looking at improved and sustainable growth."
In FY21, Havells gained market share across categories along with increased distribution penetration and expansion in rural areas.
"We will continue to strengthen our credentials in product development, emerging consumer trends, and serving through the omnichannel network. We believe in the secular growth potential of India and Havells," he asserted.
Havells is reaching the heartland and setting up a distribution network in semi-urban and rural markets, which was more resilient during the pandemic, under its focussed initiative 'Rural Vistaar'.
"We expect the rural channel to be a meaningful contributor in the medium term," Gupta added.
Talking about trends, he said consumer preferences are changing and moving towards reliable and quality brands.
On the sales channels, Gupta said "phygital" is a new reality where offline channels will co-exist with online channels.
"The Alternate channels (Online, MFR, Canteen, etc.) are expected to gain relevance over the years," he said, adding Havells has nurtured strong relationships with these channels, which would reflect in additive growth in the medium term.
In FY21, Havells reported revenue growth of 11 percent to Rs 10,428 crore.