Home-grown consumer durables firm Videocon is eyeing a larger presence in the “urban market”.
Backed by “innovation” and high-end features, the company is hoping to take a new avatar in the mass premium segment and as a “value for money” offering.
Incidentally, Videocon has good presence across rural, tier-III and IV markets. Till 2010, these markets accounted for nearly 90 per cent of the company’s sales. Today, it has a 30-70 mix – like many white goods majors – skewed in favour of rural India.
According to Anirudh Dhoot, Director, the company will target “all price points” with focus on the mass premium segment.
“We do not want to be at the very high end. What we are targeting is the mass premium segment. In the upcountry areas, we will play mostly in the mass market category, while in urban areas it will be higher end offerings,” he told BusinessLine in an interview.
The consumer durables market in India is pegged at ₹50,000 crore. Korean brands are said to be dominant players across categories such as TVs, refrigerators, ACs, washing machines and so on.
Product innovation For Videocon, clawing back into contention is based on product innovation.
The company, as Dhoot puts it, is looking to “be a technology leader”, something that was previously a forte of MNCs.
Nearly ₹560 crore has gone in as capex, including R&D spends over the last three-to-four years.
Another ₹150 crore is pegged as capex every year.
For example, last year it launched “liquid luminous” TV range competing with premium ‘OLED’ and ‘tri’-luminous ones.
This year, it has come up with Microsoft’s ‘Windows’ operating system backed TVs and ‘crystal 4K Ultra’ LEDs.
Similarly, in air conditioners, refrigerators, or washing machines – focus is on WiFi ACs, sleek designs (for washing machines), energy efficiency (for refrigerators) and so on.
“Over the last few years, our products are backed not just by high specs, but (also) priced logically,” he pointed out.
Innovation is complimented by increased after-sales services – like extended warranty (for TVs mostly).
Gaining market share The strategy, if the company officials are to be believed, is already translating into increased market share.
According to CM Singh, COO, the consumer durables maker seems to have gained at least 6 percentage point market share across all categories. This has come mostly from MNCs.
In TVs, the company’s market share has moved up from “below 10 per cent” in 2010 to around 16 per cent in 2016. “We intend to take that to 20 per cent by December 2017,” Singh said.
In ACs, it is targeting sales of about 600,000 units (almost double that of the number it sold last year).
Another instance, is its products finding increasing space in family-owned modern trade stores in cities. (Such stores include likes of Vijay Sales in Delhi, UP, Gujarat, Maharastra and Haryana.)
“Better margin to retailers and increased distribution network have also helped us,” he added.