Competition: Hotting up

Anup Menon

A RANGE of batteries is now available from the various players, and competition is on the rise.

For instance, in the past the dry-cell battery industry used to be dominated by a few players -- Eveready Industries, Indo National, Lakhanpal National and GEEP. However, there have been other recent entrants -- BPL and Duracell. Also, major international players, such as Energizer and Panasonic, have a presence in the domestic market.

There are so many players, but is there a market? Unfortunately not. Industry sources agree that all the players are operating at excess capacity and the rising competition is hurting everybody. They also point out that there are considerable export opportunities to countries such as Sri Lanka, or West Asia. But not many are able to capitalise on the opportunity because of external factors.

The established players have a reason to worry about the new entrants because the increasing level of competition would also imply pressure on the retail front. For instance, the problem for batteries is the very limited scope for brand loyalty. A consumer may ask for one brand but if it is not available take what is available. Therefore, offered the right incentive, the retailer would be the key to increasing volumes. The rising competition could thus lead to higher retailer margins which may affect bottomlines.

The other major factor is the peculiar threat offered by BPL. As a manufacturer of various consumer appliances that use batteries, BPL could offer its batteries as part of a package. This could work out cheaper for the consumer and for BPL drive volumes.