Mumbai: In a whole day dedicated to showcasing their innovative ideas and how they truly inspire living, Appliances India (Haier India), the global leader in Home Appliances and the World’s Number 1 brand in Major Appliances for 14 consecutive years recently announced that the brand is targeting a turnover of Rs 100 billion by becoming a one stop solution for all the home appliances & consumer electronics, by the end of 2024. This is in line with the expected growth of 40 per cent and 30 per cent in revenue in the years 2023 and 2024, respectively.
On this occasion, Indiantelevision.com had a tete-a-tete with Haier India president Satish NS and Haier India director & head of marketing Priyanka Sethi, elucidating the brand’s vision of a Rs 100 billion turnover, the brand being the official digital streaming sponsor of IPL, their Rs 100 crore advertising and marketing plan and more.
Haier India’s market outlook is backed by the persistent commitment to product innovation and building manufacturing excellence in the industry. With customer centricity at its core, the company has been able to launch several industry firsts such as 3 Door Side-by-Side (SBS) refrigerator, Bottom Mounted refrigerator (BMR), Glass door refrigerator, Self-Clean inverter and Anti-scaling technology in washing machines, shock-proof technology in water heaters, self-cleaning in air conditioners amongst many others. Leveraging a strong research arm to assimilate market feedback and technology-driven solutions by global R&D, the company has built the widest portfolio of home appliances in consumer durables industry in India.
In line with customer demands, Haier has constantly brought the best-in-class products to India by consistently expanding its manufacturing capabilities, strengthening the after-sales service network and building its operational excellence, aligned with its ‘Make in India’ and ‘Made for India’ strategy. With the strong presence in refrigerator and washing machines, Haier India plans to take lead in air conditioner and TV as their next biggest growth drivers for the India market.
Focused on premiumization, product innovation and delivering a complete range of Smart Home appliances, Haier India, offers a host of smart products, powered by breakthrough technologies making life effective and efficient for customers.
With the recent investments in the last few years, the company has built the capacity to roll out 1 million units of air conditioners, 1.5 million units of washing machines and 3 million units of refrigerators annually at its state-of-the-art manufacturing plants located in Greater Noida and Pune. The company has a keen focus on expanding the capacity for overall production by 25 per cent by 2024 supported by a second phase of expansion at its Greater Noida plant. The brand is planning to invest Rs 1,500 crore by 2025, for backward integration and localization of components.
Haier India currently boasts of a vast network of 30,000+ sales touch points across the country. Focused on achieving 3X growth in next 2 years, Haier India continues to strengthen its position with products driven by innovation, customer centricity, robust after sales service, convenience and ease of living for customers across India.
Edited excerpts:
On having strongly-led AI products and putting those forth to the Indian consumers
Satish: Firstly, it is the infrastructure which is helping – with 5G coming in – definitely, 4G and 5G will reduce the burden on infrastructure. Second is that obviously when we are selling the product at the shop floor presale demo, we do ensure that our guys in the showroom talk about the product, its features, and how it can help make the consumers’ life comfortable etc. And then once they buy the product, we also ensure that we know this product has been bought by XYZ consumers -so we ensure that when the installation happens, our engineers are educating them. After some time we again follow up with them, asking them if they are using it and how it is – if it is not happening, we send the engineer back to their houses and tell them these are the things and we help them to connect the product. So, it’s a question of the fact that once we start doing it, automatically word of mouth will start because the whole education ecosystem is increasing which will increase all ecosystems.
Now, the next thing is adaptation, which is going up now because with all the connected TV that is coming in, and OTT which are coming, obviously the adaptation will be much faster. If you see, earlier, most of the innovation in smart connected products was happening in the premium most segments. The premium consumer, how much of them are technology savvy, we are not sure. There is the mid-consumer who is the one between 25 and 40 years is the consumer who’s technology savvy. Can he afford a Rs 2 lakh refrigerator? No. What he can afford is this. Even if they can afford it, they don’t spend that much money as they feel it is not worth it. So that’s where we are trying to put technology into the product which can be bought by customers between 25 years to 35 years.
On the reach of connected TVs
Satish: Talking about connected TV, the number of connected TVs is I think about 75 million in terms of penetration But as the day progresses, it’s increasing. It is a question of content – the moment you start seeing good content and today with the internet facility of 4G – 5G coming in, the adaptation is definitely quite fast. From 75 million, it will definitely jump faster.
Sethi: The adoption of technology and the penetration of the internet put together, there is no way the demand will go down.
Satish: One, good content – even if you have a smart TV and even if you’re not connected today when we are pressured or somebody’s discussing that this content is good say on XYZ. Netflix or something. So obviously the first two times he might resist, but the third time he will go do some experiment and get connected. And so that is how adaptation starts and in most of the houses today when we see probably the 75 million households which are connected, probably half of the people would have surrendered the digital set-top box.
On sales in consumer groups across various markets
Satish: Today, we have a division between a metro and a non-metro, it is a 70:30 ratio. And going forward what we see is definitely, again as I said, that the awareness, the income level which is going up obviously, the non-metros will start contributing much more. And the channel penetration is increasing, customer awareness is increasing the way they are consuming the media, and the awareness level is going up. So obviously, this 70:30 ratio – I think every day this ratio will start shifting.
Sethi: After covid, digital transformation has paced up drastically – the way people want to consume their appliances and electronics at home also, is changing – it is multifaceted. They want convenience, they want personalisation, they want everything at the flick of their hand fingers, and this is how it should function in my house through connected IoT devices.
Satish: What we see during the pandemic is that there are two changes that happened in consumer behaviour. One is permanent, the other is temporary. For example, eating inside the house, during the pandemic, you had no choice but to order and get it. That was temporary – now people have started going out for food, movies etc. But some of the habits which are there became permanent. In the way people are seeing and consuming the media – the newspaper is out. Discontinuing the newspaper became a permanent thing. And so some of the changes which they brought, the way some of the things are consumed – there are some other things which became permanent.
Sethi: Even for washing machines and dishwashers, the trend wasn’t there earlier.
Satish: Robot cleaner was never a thing. It has become a part of the consumer’s lifestyle now – these are some of the changes.
On retail presence and expansion
Satish: 92 per cent is coming from offline, and 8 per cent is from online sales, D2C is not a major contribution. Today, our focus of D2C is not to sell, but more from the perspective of educating the consumer because we don’t want to interfere in the channel business. So D2C is basically if you see, to educate the consumer and some of the conceptual products, like the robot cleaner – those kinds of things are what we promoted through D2C But otherwise, it’s more of a 92 versus 8 per cent. Out of this 92 per cent, I would say about three to four per cent is EBOs.
On advertising and marketing strategies, and the media mix for Haier
Satish: In terms of product category, in terms of the major investment, if you ask me, refrigerators stand at number one for us. We would spend about 30-35 per cent on refrigerators. Air conditioners would take about 20 – 25 per cent. Washing machines are about 10 – 15 per cent. And then TV/LED is about 10 to 15 per cent.
From the media perspective – traditional versus non-traditional, it used to be a ratio of 80:20, wherein 20 per cent was digital. This year, we will go with about a 60:40 ratio, wherein 60% would be digital.
Sethi: Like Satish said, experience is a deterrent. If we have to cater to the consumer, the new age consumer, there is no way you can avoid digital. Absolutely. That is why this revamp of strategy is what we are looking at.
Satish: This year the spend is about 100 crore, which is purely the advertising and marketing spends.
The split, which we will have for the year, is about 60:40. Probably we spend about 55-60 per cent in H1, and the balance in H2.
On being the official digital streaming sponsor of IPL and this partnership
Satish: Our philosophy as we have said has always been that whatever we do, do impactful. Don’t do me too campaigns. If you see any of our advertisements in the print media, you will never find less than a half page. The minimum is a full page, but sometimes we go for a half page. Because the moment you put less than half, you become a dal-roti brand. And nobody notices you.
I know because I was the one who introduced the ad, and my sales guys know because there’s an ad which is coming in. But the consumer doesn’t notice it. Imagine this paper where X brand is a full page and I’m a brand which is a challenger brand – I say okay being a challenger brand I put a quarter page ad – your purpose is defeated. And even on television, clearly, we never take a ROD. When we take a news channel, it is very clearly defined morning – 8.30 to 10 am in the morning, in the afternoon we take between 1pm to 2pm, and in the evening after seven.
Secondly, in the television traditional channel, we only take impactful properties like Bigg Boss. Instead of putting it in every channel, we were never for a mix, we always prefer to have impactful properties.
In the same way, IPL. IPL has an entry barrier, which means the minimum investment means you can put in one crore, and also the one crore rupee you will lose in two days, your money is spent. But it gives you impact, so if we have to do IPL, then we said very clearly you have to be present for the full season. That’s where we will have some impact. That’s why it’s been both ways – how we spend and where we spend.
Sethi: As rightly pointed out by him, the strategy was very clear why we are investing in IPL for two reasons. Number one, the premiumization that we are looking at and how we are going to be achieving premiumization through being present on connected devices. So that is why the clear choice was that we are not going to go towards cable and satellite HD, SD. This year it is going to be only connected devices because my premium audience is there. So, I want to be showcased as a premium brand. Hence, the strategy is very clear that targeted marketing will happen. That’s why the digital streams sponsor.
On your vision for the company – a Rs 100 billion turnover by 2024
Satish: Firstly, we definitely want to be an innovative company. Whatever we want to do – the product has to be the hero. You saw the design of your own refrigerator proposition. Being a challenger brand, if you don’t challenge the established concepts you will never be successful. So first is the product.
Second is when you have to make such a product, you need to have your own R&D, you need to have your own manufacturing. Next is to get the talent inside. I mean, like, we try to bring in the talent and that’s where you’ll see the entire atmosphere of this campus has something. We want to make this a youthful company where people want to spend time, and then where they are allowed to do what they want to. So we say, do experiments. Fail fast and learn fast. We encourage people to do new things, and take up the strings. Otherwise, being a challenger brand, the attitude is simple – you always try to do something which your competitors have not done or the established things. You accept tradition. There are two types here – you do this, you do that, those are there. Or when you go there you have to either out beat them or outshout them. So, the best way is to go on a different route being a challenger brand, pick up something new and then do it.
For example, she just said it took us some time to decide on the IPL. We were very clear – we said what choice we have. We had standard definition – we had Star as the broadcaster on one side, and on the other side there was Jio Cinema as the digital broadcaster. So, when we said who should we look at? What is the purpose of the brand? Second, where is this consumer, who are these people? These are the people who are there. So when we did some research, we realised and you will find probably among the durable brands, we are the only brand which is being present and being projected on Jio Cinema. So we took up that challenge. And then keep watching your consumer – the consumer teaches a lot many things.
I’ll give you one simple example. We had a window air conditioner. The new one which we launched – so it’s about two months since we launched. So we took a dealer who’s selling maximum numbers of the product. We took the feedback from him about the product and what are his suggestions, what does he have etc. Product wise it’s doing extremely well, but he gave us some suggestions. This morning we had a quick meeting and we said why don’t we adapt this one? So, some of the feedback which he gave me which generally would make product performance the thing, but the customer experience changes. I said we might add some cost to us. But, let’s build because he could add products. Of course your advertisement at the shop floor is there. But there’s a third element which we strongly believe that we do and most of the companies do – is spend crores of rupees to get a new customer, but very little is done for the existing consumer while the existing customer is a good brand ambassador for you. You have to assure the existing customer how you make him happy while giving him a good service like for example for a premium consumer side by side, we send the engineer to their house. I’ll give you one classic example – one of the customers always had a complaint. So I sent the service guys, they went there as a preventative thing, when they pushed the side by side refrigerator ahead, they discovered that the entire coil was blocked. We found out the reason – the customer had three dogs in his house. So their dogs’ fur etc choked the coil. So then we showed it to the consumer saying that, “Hey, listen, this is what it is. Of course we are cleaning it for you. But you need to ensure every month or every two months to get it cleaned.” The customer sent us a note back saying thank you guys for educating me. That’s how you build a connection with the consumer.
Leave a Reply