Sanjeev Jain, national sales head, Godrej Consumer Electronics, in an exclusive conversation with EFY Group shed light on how Godrej plans to go ahead in the air-coolers vertical. Godrej has forayed into the air-coolers category with 17 semi-knocked-down models of air-coolers. The company has also introduced India’s first inverter-technology powered air-cooler.
“If you look at the growth pattern of the air-coolers vertical in the unorganised and organised sector, you will find that the organised sector is growing faster than the unorganised sector. It simply means that consumers are looking for better value-for-money air-coolers,” stated Sanjeev Jain.
He added, “Growth of the unorganised, organised or both the sectors, has been, and will always be, up to the consumers and the quality of the products to decide!”
Here are some more interesting excerpts from the interaction around Godrej’s entry into the air-coolers market
ACE – What will be Godrej’s overall channel strategy for retailing these air-coolers in India?
Sanjeev Jain – We are choosing the network to retail Godrej air-coolers in India very carefully. While we are already in touch with some of our existing channel partners, we have also been scouting for new network partners especially when it comes to the distribution part.
Taking Ghaziabad for example, we have been signing up with distributors dealing in fans, air-coolers and small kitchen appliances. What we are doing now is we are not going with our existing distributors, but we are exclusively hunting for distributors who are selling their products to electrical stores, hardware stores, kitchen appliances stores and so on. Our primary focus, in terms of developing the network for these air coolers, is scouting for distributors who are dealing in similar kind of products.
Whether we are going to UP, Punjab, Haryana or any other, we are picking new distributors. Initially, we will be targeting the launch to happen across dry weather condition states in India.
ACE – Any strategy about the end part of the sales channel?
Sanjeev Jain – When it comes to retailing different consumer electronics categories, retailers are common. A lot of retailers who sell ACs, also sell air-coolers, TVs and more consumer electronics categories. The only difference here, at times, is in the source these are brought from.
We said that we are using the existing network. It simply means that we are using the existing retail network. Godrej Appliances is in touch with its existing end-channel partners for these new launches. However, as I said earlier, when it comes to the distribution channel, we are scouting for new distributors.
ACE – What about e-commerce and the modern trade channels?
Sanjeev Jain – Godrej is already retailing its consumer electronics in the e-commerce or the online channel. We are present on Flipkart, Amazon and Tatacliq in the e-commerce side of the retail. These air-coolers will be retailed through all these portals in India.
Similarly, we are also present in the modern trade channel through the likes of Reliance Retail and Croma. Players in the modern trade channel have been retailing our products from a long time and we are sure that these new Godrej air-coolers will also be retailed by these players.
ACE – What geographies are you focusing on initially?
Sanjeev Jain – We are starting from the dry geographies in India. Some of the markets that our focus is on now include UP, Delhi, Bihar, Jharkhand, Uttarakhand, Orissa, Madhya Pradesh, Orissa, Chhattisgarh, part of Maharashtra and parts of West Bengal.
Air-coolers are not really a match for areas where humid weather conditions prevail. So, our focus will not be on the states in the southern parts of India, but on areas which have dry weather conditions.
ACE – The unorganised sector is going to be one of your biggest competitors. Do you have a plan in place?
Sanjeev Jain – The modern-day consumers take technically-sound buying decisions. I often quote the Maruti and Fiat example here. Fiat used to rule before the collaboration between Maruti and Suzuki came to India. The rest is history!
The fact that consumers want value-for-money products is evident from the rise and fall of many brands. Godrej air-coolers have been designed and crafted keeping in mind three factors – convenience, technology and affordability.
Additionally, we are taking about India’s first inverter-air-cooler. I am not sure whether anyone in the industry has thought of the same or not. What I know is thinking about this technology and launching in the very-first air-cooler that we introduced is a proof of the commitment and farsightedness we have for this category.
ACE – But aren’t there too many players in the unorganised sector?
Sanjeev Jain – If you look at the growth pattern of the air-coolers vertical in the unorganised and organised sector, you will find that the organised sector is growing faster than the unorganised sector. It simply means that consumers are looking for better value-for-money air-coolers.
Twenty-years back, there used to be just one brand in the geysers market. The rest of the vertical was dominated by the unorganised sector. If you look at the dynamics of the geyser market in the present scenario, there are hardly any players from the unorganised sector left.
I feel and believe that if you are ready to give convenience to the consumer, he is ready to spend extra. We at Godrej, with these air-cooler launches are trying to bridge the gaps between affordability and features when it comes to air-coolers. It is also about the availability factor. People can choose to, or not to invest in a product, only if its available in the first place.
ACE – Can organised sector take over the sales of air-coolers by the unorganised sector?
Sanjeev Jain – I don’t think anyone can forecast when will that happen. If you look at these markets carefully, you will find that the gap between the two is diminishing. The share of organised sector has increased in the last five years and it is still increasing.
The answer to this question will also depend on the consumers. If they think products from the unorganised sector are a better value-for-money, they will stick to them. If they find Godrej air-coolers as a better investment, they will switch from unorganised.
Growth of the unorganised, organised or both the sectors, has been, and will always be, up to the consumers and the quality of the products to decide!
