Haier India is set to invest in brand building and step up advertising spends by nearly 30 per cent to Rs 85 crore this year. The Chinese consumer durable brand is still perceived to be a low-priced brand in India and has been losing out to the Korean and Japanese players, who have been spending heavily behind brand building.
Haier India President Eric Braganza said, “Today, our focus is on building the Haier brand with better dealer network, visibility and quality products that match those of our competitors. Haier entered the country in 2004 and plans to move away from being a low-priced brand to become a mid-priced brand. We would be increasing ad spends from Rs 65 crore to Rs 85 crore this year, which is greater than what the industry is spending today.”
However, its premium range of televisions, refrigerators and washing machines will continue to be at least 5 per cent cheaper than the high-end models of LG or Samsung. As Braganza adds, “While our premium range of products does compete with LG and Samsung, it would be priced at least 5 per cent cheaper. In India, we want to be perceived as a mid-priced brand of consumer durables.”
A new manufacturing base is also being explored apart from existing facilities at Ranjangaon in Pune, which manufacture refrigerators. Haier continues to import its televisions, air conditioners and washing machines from its factories based in China, Thailand and Italy. “Once we get volumes, we will look at a different manufacturing site for manufacturing air conditioners. Today, products such as LED and LCD televisions are completely imported,” said Braganza. Currently, refrigerators contribute 35 per cent of turnover with the company holding 8 per cent share in the category. Its second-largest category is air conditioners which comprise 14 per cent of turnover, followed by washing machines at 10 per cent. It still lags behind its Korean competitors with 4 per cent share in categories such as televisions and washing machines.
The company is also stepping up its retail presence to reach 6,000 multi-brand outlets. It would also be increasing the number of its ‘experience centres’ from the current 170 to 275 centres by 2014, all of which would be through the franchise route.
Meanwhile, Haier is looking forward to better sales for its air conditioners this summer. “We sold 70,000 AC units last calendar year and expect to achieve a similar number in the first five months of this year,” added Braganza. Haier India expects to grow at 25 per cent with a sales turnover of Rs 1,600 crore this fiscal.