Companies

Godrej Appliances forays into air-cooler segment

Meenakshi Verma Ambwani New Delhi | Updated on January 23, 2020

Kamal Nandi, Executive Vice-President and Business Head, Godrej Appliances

Godrej Appliances aims to garner 15 per cent market share in five years

Godrej Appliances has decided to foray into the air-cooler segment, in line with its strategy to expand its cooling product portfolio and deepen the brands’ penetration in smaller towns and rural region. The company is eyeing a market share of 15 per cent in this category in the next five years.

Kamal Nandi, Executive Vice-President and Business Head, Godrej Appliances, said, “After prices of air-conditioners have increased due to the tightening of energy efficiency norms, a section of first-time buyers are seeking more affordable solutions and downtrading to air-coolers. We believe the air-cooler category will continue to see strong demand in the coming years.”

Entry-level AC prices, for instance, have risen up by ₹5,000-6,000 due to tightening of energy efficiency norms, making it an expensive proposition for first-time buyers.

“It is also a logical extension of our expertise in the cooling solutions space and we think we can add a lot of value to the segment,” he added. Besides affordability, factors such as urbanisation, rising temperatures and pollution levels are also supporting the growth of the air-cooler segment, Nandi said.

The air-cooler segment, which was clocking a growth of 17 per cent in the past, is expected to grow at a CAGR of 20 per cent by 2022.

Sanjeev Jain, National Sales Head, Godrej Appliances, said, “In the first year, we expect to sell about one lakh units of air- coolers and garner a market share of about 4 per cent. In the next five years, we aim to gain a market share of 15 per cent in the segment.”

Besides leveraging on its existing retail distribution network, modern trade stores and e-commerce, the company will also look at selling its air-cooler range in small appliance stores channel.

Relying on third-party manufacturer

For now, the company will rely on third-party manufacturer, for making the air-cooler range, in line with existing industry practices. “As the air-cooler business scales up, we will look at manufacturing these products on our own in the next three years,” Nandi added.

Godrej Appliances said its offering a differentiated product proposition to consumers by offering inverter technology in air- coolers to be able to deliver cooling more efficiently with higher power savings.

Asked about growth trends for air-conditioner sales in the upcoming summer season, Nandi said, “We are witnessing early signs of demand for air-conditioners in the southern region. We anticipate the AC sector to witness a growth in excess of 20 per cent this summer season.”

 

Published on January 23, 2020

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