To strengthen its appliance division, Godrej & Boyce Mfg. Co. Ltd. plans to expand its portfolio in refrigerators, while entering new product categories of televisions, food processing and commercial refrigeration by this year end. “As part of our strategic business plan, we aim to unveil something new every quarter,” said George Menezes, chief operating officer, Godrej.
The company launched a new range of direct-cool refrigerators on Wednesday. It will introduce 40 new models in three variants during the course of this year. With this launch, Godrej aims to tap into the direct cool segment, which remains largely under-penetrated at around 15%, Menezes said. “Direct cool refrigerator segment is growing at only 5% as compared to frost-free which is growing at 31%. Yet direct cool still accounts for close to 70% of the Rs44 million refrigerator market in India,” said Kamal Nandi, vice president, sales and marketing, appliance division.
Godrej said its current market share in the segment is around 22% and it is looking at expanding it to 25% in 2008.
The company is also plans to tap the growing flat television market. “Godrej is currently evaluating its entry into the television space. Should everything work out, we will be launching televisions in the flat panel division in the next six months,” said Menezes.
Both the direct-cool refrigerator and flat TV segments are dominated by Korean companies Samsung India Electronics Pvt. Ltd and LG Electronics India Pvt Ltd. According to industry estimates, the total size of Indian consumer durables industry is around Rs25,000 crore and the two Korean rivals dominate the market with around 40% market share in it. Other leading players in the industry are Whirlpool, Videcon and Mirc Electronics among others
“We will compete with our rivals on value proposition and our technology, which will be more tailored to the needs of the Indian consumer,” said Menezes.
The company also plans to enter the food processing and commercial refrigeration categories this year. While Menezes did not divulge much details, he said: “With India’s retail landscape becoming more organized, several new opportunities are coming up. Because we are pioneers is refrigeration, getting into commercial refrigerators is the next step.”
“There is a realization among household brands such as Godrej that they have the potential to unlock value of their name and explore new spaces and opportunities in the market,” said Harish Bijoor, CEO Harish Bijoor Consults Ltd, a marketing consultant. “Godrej will not be a mega brand in these new spaces as they are already dominated by global players, but they will get a fair share of the pie by carving a niche for themselves based on the value their brand brings,” he added.
The company recorded a Rs. 1,000 crore turnover in 2006-2007, and it expects it to grow to Rs1400 in 2007-2008. “The consumer durable market is growing at 12-15% but at Godrej we have been growing at 30%. By next year, we expect to achieve a growth rate of close to 40% with a turnover of Rs2000 crore,” said Menezes.