As online sales become increasingly popular in India, the Fast Moving Electrical Goods (FMEG) company Havells India Ltd (HIL) plans to use this platform from next financial year to propel its sales.
The company, which recorded a 30 per cent jump in net profit compared to a 12 per cent increase in sales in the first nine months of current fiscal, attributed a host of reasons including price discipline, improved margins and a healthy product mix with focus on consumer segment.
In an interview to
The focus of the company is on consumer business and the domestic electrical markets. Its products, excluding motors and cables, are sold through its distribution network and its products are launched leveraging its brand value and strength of dealership network.
Product range Jagadish said his company had looked at the possibility of entering the air-conditioner segment as well since it had gained a foothold in the appliances market. But it did not feel that there was any synergy between the existing setup and the AC segment and hence has kept away from it. But he did not rule out entering this segment at a later stage since HIL’s product range and sales network are expanding.
Asked whether Havells would take to online sales as many online portals such as flipkart.com, snapdeal.com and amazon.in are offering electrical and electronic products, Jagdish said ecommerce was a ‘three-year nascent industry’ now booming and Havells was ‘not discounting it’.
At present, the company’s margin was on distributor model. But the company is ‘exploring’ the ecommerce route as well. Even now, a distributor is offering Havells products online.
But the question was whether Havells itself would begin selling its products online. Havells is looking at this avenue seriously and it plans to enter this market by the next financial year (2014-15). This will require a lot of backend facilities. The company may begin with some of the products such as appliances, lightings etc which may not require installation by skilled personnel before expanding the range.
Acquisition plans Asked whether Havells was looking at acquiring Crompton Greaves Ltd that was stated to be on the block, Jagdish said, “Crompton as a company has much more than consumer products.”
Only 30 per cent of its turnover is from consumer products and it is heavily into power transmission and power distribution products manufacture that are totally different from what Havells is into. However, it is not for him to comment on whether Havells would have a look at acquiring CGL if it comes up for sale, he added.
Conceding that slowdown in infrastructure and construction sectors has had an impact on demand for capital goods, Jagadish said this also provided an opportunity for looking at other markets such as the rural market.
A revival in the construction sector will benefit Havells since a large segment of its products are aimed at this sector.