Kamal Nandi, Business Head & Executive VP, Godrej Appliances at the launch of company's new range of products.
Credit: Special Arrangement
Bengaluru: The heatwave this year brought home a clear reckoning that air conditioners are no longer a luxury but a necessity. Godrej Appliances, which saw the demand for its air conditioners from the smaller towns outstrip that from the bigger cities, has woken up to the phenomenal potential this one product line holds for them and decided to chase it.
Such is the faith in the health of the economy, that the company is also betting big on premium products, with a declared aspiration to become one of the country's top three players in the white goods segment. It sees air conditioners as the biggest propellant to this end. “Our growth in air conditioners is at 140 per cent, which is really high and we are gaining momentum in this segment very fast,” the company’s business head & executive vice president, Kamal Nandi, told DH, in an exclusive interaction.
His confidence stems from the company veering to premium products, something it was missing earlier. “We have offered very good solutions to the consumers in air conditioners (AC) with very innovative technologies. Our anti-leak technology in AC has driven the category adoption very high among consumers,” he added. The wood-finish it introduced in its refrigerators and air conditioners is another premiumisation exercise, targeted at a niche market.
"We have been investing in bringing out a premium product portfolio across categories for the last four to five years now. We've invested a good Rs 1,400 crore in our manufacturing and product development over these 5 years. All these products are now launched in the market. As and when we kept launching products, we have been gaining momentum," Nandi informed.
According to Statista, the German data collation online platform, the Indian market for air conditioners is estimated to grow by 16.56 per cent between 2024 and 2029 taking its value to $12.65 billion in the penultimate year of the decade. Nandi sees this fastest growing category for his company to leverage. “Even though it has the lowest penetration today, the potential of an AC is higher because of its higher volume compared to the likes of refrigerators and washing machines in a household. So, that's where we have built our strength the most,” he argued.
Then again, it is the low penetration of air conditioners and climate change triggering the need for the product that has made the product line most bankable. Tier-II/III/IV cities are the new growing markets. “Currently, the business that comes from these cities is about close to 55 per cent while tier-I and metro cities are about 45 per cent” Nandi explained.
Geographically, he finds the East of India underserved and holding the promise of quick growth. “If you see, over the last 3-4 years,consumption has been better in that market, making it one of our focus markets, because we want to ride the growth and get a larger share. We are doing very well pan- India including Bihar, Bengal and North East,” he elaborated.
Going forward the company plans to expand its network of outlets by 30 per cent by the end of this fiscal year, but has no plans for price hikes.