Godrej recently launched a new energy efficient air-conditioner under its premium sub-brand NXW in Mumbai. Godrej claims the AC to be the most energy efficient air conditioner with an ISSER of 5.2, the ISSER is a new rating system introduced by Bureau of Energy Efficiency.
We spoke with Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances as he expressed his views on standards set up by the BEE, competition from other brands and Godrej’s growth over the fourth quarter, expectations from the Budget and more
How is Godrej planning to counter its competitors like LG, Blue Star etc.?
We have been differentiating ourselves from our competitors by offering our customers the best in class from any segment. We provide the best energy efficient appliances. We have designs and technology that are very different from others. As a brand, our strategy is to be the best in every category and have the latest and the most efficient appliances.
How easy is it to live up to the standards of the Bureau of energy efficiency?
I think both the industry and the government are working very closely on bringing out this programme. We are giving out all the support to the government to work on it. There are challenges in terms of high end efficiency appliances. If we take the example of a 5 star frost free fridge, the manufacturing is very expensive and so the cost is higher, unless and until the govt incentivizes the consumers to buy it they will not buy it. Even if the government incentivizes manufacturers to bring down the cost of manufacturing then it can be a lot more successful.
After few air-conditioning and refrigerator brands reported 25% growth in December ’15, how has Godrej fared over the last quarter?
We are growing more or less one and half times or two times of the industry, so if the industry is growing by 20% then you can assume that we are growing at 30+. December was a good month for the industry because the temperatures have risen across the country. The first and second quarter was not good for the industry; the third was promising because of the festivities and going forward we expect the fourth quarter to be better because the temperatures are already rising so we are expecting more sales.
The levying of excise duty makes it tougher to own premium products what is your take on it?
Overall at an industry level when the government of India had given us an excise concession, it propelled growth for the industry but was rolled back last year. So we have put in a request and in order to propel growth in the industry the excise needs to be held at 10%.
You have a target audience of a younger niche, how are you reaching out to the youth?
We all know that the consumers today are between 25 and 40 years. You need to address your communication to that target audience. There is a huge initiative on digital platforms that we are planning to release across all other media platforms as well. Just to reveal it to you, we enjoy the highest Facebook fans among all brands, so that’s how we are connecting with the youth.
What are you expectations from this year’s budget?
Our request is to generate demand for the industry and roll back the excise duty. Secondly to promote higher star or energy efficient products, the government must give incentives to customers to upgrade to better appliances with better standards. Thirdly to make the ‘Make in India’ a level playing field and all products under the free trade agreement and its components must also be made zero duty.
What is your marketing strategy going to be in 2016?
We plan to be more aggressive this year with our campaigning. We are starting our campaigns this week and we want to double our spends on our marketing as compared to last year.