The Hindu Business Line : Exide adopts ‘shielding strategy’ for low-priced competitors

Snapshot
Exide now commands a 50 per cent market share in the UPS battery segment. Of the remaining, 20 per cent is imported primarily from China and Vietnam.

Pratim Ranjan Bose

Kolkata, Feb. 20 Exide Industries is working out a major exercise to take on its low priced competitors in the UPS and inverter battery segment in the retail market. The company is planning a countrywide roll-out of 5 to 8 per cent cheaper SF (Standard Furukawa) branded stand-by batteries to be marketed through separate distribution channels.

The ‘shielding strategy’ is aimed at protecting both the brand value and market share of the Exide branded products, and also gain market share in the low value retail segment dominated by smaller producers and imports.

According to Mr Gautam Chatterjee, Director-Industrial, Exide now commands a 50 per cent market share in the UPS battery segment. Of the remaining, 20 per cent is imported primarily from China and Vietnam.

Amara Raja and HBL Nife are the other major Indian producers in this segment.

Inverter segment

In inverter batteries, the company claims control of 80 per cent of the organised trade which is not more than 50 per cent of the total market size.

“Exide acquired SF brands through the merger of Standard Batteries in 1998. While both the brands co-exist in our automotive business, industrial products alone were branded as Exide,” Mr Chatterjee said.

With the expansions in industrial battery business in the last decade, coupled with fierce competition from low priced products comprising mostly Chinese imports, Exide felt the need to introduce SF in this segment too.

“We have been working with the brand for the last few years including some soft launches to test the waters. The brand witnessed a 73 per cent growth in 2007-08. We are now ready to hit the market with a bang,” the official said.

Separate distribution

To prevent canibalisation within Exide and SF branded products, the company plans to separate the distribution channels. While the Exide distribution channels are branded as ‘Exide Power Centre’, the same for SF will be known as “SF Power Junction”.

Unlike the Exide branded products, marketed through an exclusive distribution network, SF will be more flexible in its approach. “In order to reach out to the nook and corner of the country, we may adopt multiple-brand distribution in smaller locations,” Mr Chatterjee said.

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