Consumer durables major Haier Appliances India, which is expanding its manufacturing plant in Noida by investing ₹1,500 crore by 2025, wants to ramp up exports, localize components and make premium products.
Satish NS, president of the company, spoke to businessline on a range of topics including demand uptick, expansion, digitalization and D2C’s impact on consumer durable sales. Excerpts:
Has the demand for air-conditioners and refrigerators increased compared to last year? Has Hair ramped up production?
Up until mid-March, the demand was on an uptick, but it was impacted by the unseasonal rainfall. We are seeing an uptick in demand again. We will be producing at full capacity till May 15.
There are always two kinds of buyers — one who can afford it irrespective of the season; he/she could be building a house, or doing interior works; and the other is the absolute-necessity buyer, who may be forced to buy because of the weather.
How are your entry-level product sales? Has the demand picked up in rural?
The demand for entry-level products is not catching up with mid- and premium products. Post-pandemic we see two impacts — the mid- and high-end consumers whose lifestyle was probably not much impacted; and the other, the mid- and low-end consumers whose life savings were wiped out. Either their employers did not pay salaries or they were forced to take out their savings or borrow to survive; now they are rebuilding savings. It might take some time as there is an inflationary impact.
Will the focus shift to premium products?
We are still working on the mass market for products, but we see an opportunity and the market would be better for premium products. We are bringing in innovative products such as a three-door refrigerator.
How are you targeting the audience for premium products digitally?
Our spending has increased from the earlier 80 per cent traditional and 20 per cent digital to 60 per cent digital and 40 per cent traditional. We have cut down on traditional media spending. We can specifically target customers through social media or performance marketing. The consumers can be targeted by geography, media consumption and by knowing what kind of information he/she is looking for.
Does that mean there is an uptick in sales through Haier’s D2C channels?
D2C is, as of today, more from an information-gathering perspective. There are multiple challenges as customers even today look for a bargain. Being the manufacturer or the brand owner, I can disrupt the channel. On our website, I cannot adorn the margin for trading partners which is why my prices are pretty high. Hence the customer purchases in the traditional market.
What is helping us is that the products which most of our trade partners are not selling — like the wine cellars and the newly-introduced larger refrigerators — sell in good numbers on our website. Our footprint has increased on D2C and we would rather encourage consumers to buy from our channel partners rather than serve directly.
Does Haier plan on increasing exports with the expansion of manufacturing capabilities at the Greater Noida plant?
We are currently catering to Nepal, Sri Lanka, Bangladesh, New Zealand and a few European markets in exports. We are trying to now explore more into the Middle East and African markets, which would become a good transit point.
Do you also plan to expand Haier’s Pune plant? Will you be looking to establish manufacturing capabilities in the south Indian market, too?
There will be no expansion but a lot of upgrading in terms of manufacturing, processing will take place in the Pune plant. We have expanded with deep freezers in the Pune plant. Our next natural expansion is in south India but not at this point; we have not decided on it. The south Indian market is consistent and a new technology is picked up instantly.
Also read: Haier India targets ₹10,000 crore turnover by 2024 end