With 52 per cent of its air-conditioner sales coming from smaller towns, Blue Star is planning to increase its distribution footprint in this market in States like Uttar Pradesh, Bihar, Maharashtra and the North-East.
“It is a myth that people in smaller towns need cheaper products. They are as aspirational as those in bigger cities. We reach out to them through our brand shops, which are run by dealers,” said B Thiagarajan, Joint Managing Director, Blue Star.
The company currently has a reach across 4,500 stores, of which 2,000 are in tier 3,4 and 5 towns. It is now planning to take up the count to 3,500 touch points in smaller towns, expecting to double its revenues from this market. Besides, there are going to be more exclusive brand shops run by franchises.
“It is the smaller towns which have contributed to the growth of the air-conditioner category and we expect their contribution to go up by 30 per cent by next year,” he added.
With almost 40 per cent of its portfolio comprising inverter models, Blue Star is also integrating some of its models with air-purifiers, as the latter is still a small segment.
“Air-purifiers are a ₹180-crore segment and is dependent on pollution levels increasing, which is typically for a couple of months. We are now integrating our air purifiers with our air-conditioners,” said Thiagarajan.
Having entered the room air-conditioner category in 2011, Blue Star currently has a 11.5 per cent value share and is behind players like Voltas, LG, Hitachi and Daikin.
“The air-conditioner category grew by 10 per cent in 2017, while we grew 15 per cent. We expect the category to grow 15-20 per cent in 2018,” added Thiagarajan.