Videocon to bank on brand power in AC biz

Videocon Industries plans to regain some of its lost market share in the AC category by unleashing its brand power. The company will invest around ₹125 crore to launch more products and technologies, beef up its distribution network and promote ACs aggressively across its three brands—Electrolux, Kelvinator and Videocon.

While Electrolux will cater mostly to the metro markets, with its premium price points and offerings, Kelvinator will be treated as a “guerrilla” brand to garner share from the bottom of the AC category.

“This summer, we will leverage the strength of our global brands and clearly segment the AC category. Electrolux and Kelvinator will flank the mother brand of Videocon. With this, we hope to increase our market share in ACs from 10 to 15 per cent this year,” said Sanjeev Bakshi, COO, AC Division, Videocon Industries.

In recent years, the company saw its market share dwindle after South Korean companies LG Electronics and Samsung Electronics Co started dominating the domestic AC segment.

Electrolux, with a sales turnover of ₹450 crore, has always been a metro-centric brand. It has a share of almost 7 per cent across the five metros. Kelvinator, with a sales turnover of ₹150 crore, has been the price warrior and is almost three-four per cent cheaper than the Videocon brand. It targets consumers in smaller cities. The Videocon brand continues to be the largest in its AC portfolio, with a sales turnover of ₹1,000 crore, and holds a 10 per cent value share in the AC category.

Videocon is also making a comeback in the window AC segment, unlike some of its competitors who have withdrawn from the category. “We are re-entering the window AC segment under Videocon, as there is still a market for the category in north India. However, there will be no window ACs under Electrolux and Kelvinator brands,” added Bakshi.

Videocon ACs are currently pegged in the range of ₹27,500 to ₹39,500, while Electrolux ACs are three-four per cent higher than the mother brand.

New technologies and offerings have been planned across Electrolux and Videocon this summer, with an investment of ₹125 crore earmarked for the AC division. Videocon Industries has products in other divisions as well such as consumer electronics and home appliances.

The company has enhanced distribution of its ACs at multi-brand outlets. It plans to increase the number of multi-brand outlets from 3,500 to 5,000.

The Videocon Group has also been segmenting its retail formats under Next and Digiworld. While Next has been withdrawn from the metros to cater to smaller cities, Digiworld is being positioned as ‘neighbourhood’ stores in bigger markets.