Companies

Voltas targets ₹3,500-cr sales from Beko range of consumer durables

Purvita Chatterjee Mumbai | Updated on January 12, 2018 Published on May 29, 2017

Formal product launch likely before Diwali



By making an entry into the ₹35,000-crore consumer durable segment through an equal joint venture with Turkey-based Ardutch (a subsidiary of Arçelik, part of the Koç Group making the Beko brand), Voltas is moving from being a single product company making air-conditioners to having a complete consumer durable portfolio.

Adding new categories such as washing machines, refrigerators and kitchen appliances, the new co-brand under Voltas Beko is expected to garner a 10 per cent share with sales of ₹3,500 crore in the category which continues to be dominated by MNC brands like LG and Samsung.

“The formal product launch should happen before Diwali and while there has been an equity infusion of ₹680 crore, there is going to be a phased additional investment by both the partners since we have ambitions to have a 10 per cent share in the consumer durable category. The plan is to first seed the market by importing the products from Beko’s manufacturing base,’’ said Anil George, Chief Financial Officer, Voltas, during the Q4 earnings call.

Apart from Beko being an unknown brand in India, Voltas will face stiff competition from the Korean and Japanese chaebols who are already present in these categories. Distribution is going to be the key where Voltas, with its presence across 5,000-odd multi-brand outlets, may find it tough against competitors like LG which is present in 30,000 multi-brand outlets.

According to Vijay Babu, Business Head, Residential Airconditioners, LG India, “Almost 80 per cent of the consumer durable category is between LG and Samsung. Voltas has to work hard towards distribution, penetration and the upcountry markets where it does not have adequate presence, to have a significant share. While it may be a strong brand, even getting a 2-3 per cent share will be a big deal for Voltas.’’

But compared to the MNC brands, Voltas may have relatively lower prices with a ‘value for money’ proposition for its Voltas Beko range of consumer durables, claim analysts. Considering Voltas air-conditioners are almost ₹5,000 cheaper than the MNC brands, it is likely to adopt a similar strategy for the rest of the consumer durable categories under Voltas Beko.

To begin with, Voltas is expected to enter white goods such as refrigerators and washing machines which will get imported directly from Beko’s manufacturing facilities and can ride on its existing air-conditioner distribution. Kitchen appliances may take a while to launch since it will have to build a separate distribution for the same.

With time, Voltas Beko intends setting up more than one manufacturing units in the country.

Published on May 29, 2017
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