Onida bets on ‘owner’s pride’ for comeback; turns profitable

After ruling Indian living rooms with their colour televisions for almost two decades, the ‘neighbour’s envy owner’s pride’ brand Onida is now betting big on Indian kitchens with plans to launch refrigerators as well as small home appliances.

Onida, which was hurt when the Indian economy opened up in the 1990s and multinationals like LG, Samsung and Sony entered the country, has now found its feet once again. Mirc Electronics, the flagship company of the Onida group, turned profitable in the last January-March quarter. The company reported revenues of ₹785 crore in FY-17 and is targeting to grow 25 per cent this fiscal.

“From here on, we will continue to grow. We have done a lot of automation in our manufacturing plants and released redundant workforce. That is saving a lot of money. We may also turn contract manufacturer for other brands to use any spare capacity in our plants,” Vijay Mansukhani, MD, Mirc Electronics, told BusinessLine .

Alongside, the home-grown company has expanded its portfolio to include washing machines, microwaves and air-conditioners, where it has garnered eight per cent market share. It is now working on launching refrigerators. “We are into brown goods now and refrigerators will complete our presence in this space. We are also considering moving into home appliances,” Mansukhani said.

Currently, 45 per cent of the company’s revenues come from ACs, 40 per cent from panel TVs and the rest from washing machines and other categories.

Last year, the company roped in Vivek Saran, head of sales, from Whirlpool of India Ltd. He is driving Onida’s strategy in the refrigerator space.

Saran pointed out that the company is working on “giving more value” to consumers rather than entering into any price war. So Onida’s ACs come with an app that lets the user control the monthly bill or even switch on or off the machine from a remote location. Its microwaves come with an in-built weighing scale to help novice users decide the time needed for cooking.

With the changed market scenario, the company’s focus is now only on “owner’s pride” as consumers want the best from their buys in terms of functionality as well as design. Its famous mascot, the Onida devil, has also made way for the ‘bionic man’, who represents Onida as a futuristic, hi-tech company.

To fortify presence in retail outlets, Onida has set up a work force of about 600 in-shop executives. It has also started selling online through Amazon and Flipkart. “Our sales from online channel are currently at about 10 per cent. For now, we want to remain at that level and maintain channel balance,” said Sunil Shankar, Business Head, Air-Conditioners for Onida.

Onida’s 40 per cent sales comes from tier-I cities and metros, while the rest comes from mid-segment consumers mostly in semi-urban areas. Devangshu Dutta, Chief Executive at consultancy firm Third Eyesight, says for a brand like Onida to revive, it must be clear whether it wants to be perceived as a value brand or an aspirational brand given that many international brand have now flooded the market.

“Secondly, the business itself is quite distribution-oriented so there has to be a significant amount of investment in channel push. If they have the distribution relationship, a comeback should not be difficult, especially in tier-II and III cities where competitive intensity is less,” Dutta said.

While Onida is stepping up efforts to get the right products for the changed Indian consumer, only time will tell whether its new strategy is paying off.

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