Godrej Appliances, a business unit of the highly diversified Godrej & Boyce Mfg. Co. Ltd. is one of the leading Home Appliances players in India In an interaction with Mobility India , Mr. Kamal Nandi, Business Head and Executive Vice President – Godrej, explains how the company has expanded its portfolio across many categories, the factors in the market that have propelled the growth.
Q. Recently the brand has forayed into dishwasher market. How is it doing in India? What were the key drivers for growth?
The pandemic has upped the stress level for consumers significantly. City based consumers particularly have been most affected – they are juggling their office work with household chores while trying to limit their dependence on domestic help to avoid health risks. The dishwasher category in India is at a nascent stage but the heightened need for convenience and personal hygiene as an outcome of Covid-19, has accelerated awareness and demand for this product segment.
The category saw unprecedented growth at the peak of the lockdown as people looked for ways and means to navigate the household chores. Dishwashing remained one of the most time-taking and laborious chores and consequently dishwashers were being welcomed with open arms. The hitherto key perception barrier of the machine not meant for India was suddenly no longer valid. The adoption was led by people who were already aware and exposed to the product but as its performance was established and found to be effective, the word of mouth for the category spread, fuelling further demand. This category is currently in a niche stage in the Indian market; however, it has a promising future and will continue to witness a healthy 2-digit growth year-after-year.
Q. What are the growth opportunities that are likely to witness a spike in demand in Indian market?
Now, even as the pandemic is receding, with the initial inertia overcome, the category will continue to see demand on the back of positive word of mouth which comes from satisfied consumers coupled with the aspiration value of owing the product. The continued health and hygiene consciousness aids in the penetration of the category which delivers superior cleaning for the dishes. Consumers have begun to understand that contrary to past perception, the product is well suited to the wide variety of Indian dishes and Indian cooking.
Further, currently, consumer sentiment is turning positive. There is a pent-up demand as a result of the restrictions in the initial half of the year. Consumers are focusing on upgrades. Refrigerators, particularly frost-free and fully automatic washing machines, are witnessing increased traction. After a difficult year dealing with the pandemic, consumers in India are gearing up to celebrate the festival season and we are seeing encouraging signs of demand revival. At an overall level we have achieved approx. 25% growth in sales in the first half and are aiming to maintain the same pace till year end.
Q. What is your take in Make in India?
Manufacturing is one of the core strengths of Godrej Appliances. The brand has been working steadily over the years towards upping its indigenous manufacturing capabilities, with an intention to manufacture nearly all its product categories locally. Over the last seven years, the brand has invested Rs.1100 crore in capacity, R&D and technology expansion, demonstrating its commitment to ‘Make in India’. We initiated our AC production complete with backward integration earlier this year, expanded our medical refrigeration capacity and are continuing work on our other manufacturing projects.
Q. How has the pandemic impacted the sales of the company?
The brand experienced a considerable drop in sales owing to the lockdowns and the adversely hit consumer sentiments. Summer being a key month for sales of cooling products, this was the second consecutive summer being affected, affecting some categories like ACs and Refrigerators worse than others. Post the second wave subsided, there has been some improvement in demand. The traction has been highest for premium segments like frost free refrigerators and automatic washing machines. The situation is gradually improving with the festive season and receding pandemic fear.
Q. Discuss the growth envisaged?
We expect the momentum to grow in the coming months. Overall economic indicators are showing improvement. Consumer sentiments are improving leading to increased footfalls in the stores. While unemployment and drop in salaries has been a case of concern, urban demand should improve on the back of increased hiring intent. A normal monsoon should help rural demand as well.
The company has launched a range of aesthetic glass door direct cool refrigerators, new double door frost free refrigerators, and top load washing machines. This is in line with the increased traction witnessed in the premium segments since the last few months and follows the company’s foray into the premium category of dishwashers recently.
Furthermore, the festive season is marked by deals and offers and given the consumer’s priority to savings, festive promotions will play an even more significant role this year. In keeping with consumers’ need for liquidity, the company has designed lucrative cash backs up to 20%, multiple EMI schemes including the much in demand, ₹1 down payment scheme, extended warranty schemes and a lot more to enable the consumer to make the purchase.We are seeing encouraging signs of demand revival and are targeting a double-digit growth rate of 20% plus during this festive season.