‘Appliances have seen 100% growth’2 min read . Updated: 12 Nov 2020, 10:46 PM IST
This year, the government has emphasised on self-reliance, therefore, we have started designing many products in-house
Air conditioning company Voltas Ltd, part of the Tata group, sells more than one million AC units a year. Once the lockdown restrictions were relaxed, the firm saw a quick turnaround in business, driven by smaller towns as well as expansion into newer categories, Pradeep Bakshi, CEO and managing director, said in an interview. Edited excerpts:
How is the recovery looking in the consumer appliances sector?
The pandemic and the lockdown derailed us completely — across industries, the sentiments went down. People were not moving out, so there was no business. The lockdown also happened at a time when the air conditioning and cooling business peaks. But while India was under lockdown, our international businesses, including our mining and construction business in the African continent, continued. With Unlock 1.0, the business in India picked up rapidly. All along the second quarter until now, we have done reasonably well — better than the industry — because of several reasons. One is the trust of consumers in our products and brand. Two, we have a large footprint of channel partners, more than 20,000. There are service teams available. And all our products are based on consumer insights. We saw higher traction in smaller towns during the unlocking phase. The distribution channels in non-metros opened sooner as compared to the metros.
Since the peak season for ACs is over, where would the growth over the next six months come from?
The fact that we expanded into new categories—the appliances segment, for instance — was to complement the seasonality factor of the room air conditioner business. This has paid dividends. Refrigerators, washing machines, microwave ovens and dishwashers sell round the year. Many consumers were working from home. We offered them a wide variety of products. We are a nascent player in appliances. However, our growth in appliances has been more than 100% over last year’s numbers.
What is the progress Voltas has made in localizing supply chains and manufacturing in India?
60-70% of the components came from abroad for room ACs. There were disabilities in terms of technical know-how, scale, the capability. We have started working on that; we are trying to source most of the components in India. Earlier, completely-built units were imported. Then only the indoor units and the compressors were imported. With the inverter AC category coming in, the PCB controllers, motors, the copper tubes were all imported.
This year, the government has emphasised on self-reliance. Therefore, we have started designing many products in-house. Going ahead, we will set up a plant in south India. That would be a huge backward-integrated plant.