Sumit Joshi, Marketing Head | 01 Nov 2013
While we are seeing strong growth in urban areas, we are also seeing very strong growth in semi-urban and rural areas. As more and more of India gets electrified, clearly there are lot more opportunities for lighting going forward... Currently, our share in the LED space exceeds 46 per cent.
Nirupam Sahay, President, Philips Lighting India has over 18 years of experience across industries such as consumer durables, telecom and financial services. He has been President of Philips Lighting India since May 2011. In this role, Sahay is responsible for the overall commercial performance of Philips Lighting business in India, Bangladesh, Sri Lanka and Nepal. Prior to joining Philips, he held key positions at GE Capital, Whirlpool, Reliance Infocomm and Asian Paints.
Sumit Joshi heads Marketing at Philips Lighting India and additionally he is also responsible for managing the lamps business group at the company. Joshi has experience of over 15 years across FMCG, OTC and consumer durables space.
In conversation with exchange4media’s Simran Sabherwal, Sahay and Joshi speak at length about the lighting market in India, Philips’ latest campaign featuring Ranbir Kapoor, the future of LED lighting in India and more...
Q. The current slowdown has impacted demand across segments. According to you, how is the consumer sentiment this festive season?
Nirupam Sahay: It is actually very positive. The monsoons have been excellent across the country, so rural and semi-urban demand has actually picked up pretty well. I also think that the Reserve Bank of India has taken certain steps which have been pretty positive, and I think there is relative stability coming there as well. So, overall consumer sentiment is actually very positive. We are seeing an extremely strong Diwali season and we expect this to continue all the way up to Christmas.
Q. How would you compare growth in the urban and rural areas and what are the opportunities you see going ahead?
Nirupam Sahay: While we are seeing strong growth in urban areas, we are also seeing very strong growth in semi-urban and rural areas. As more and more of India gets electrified, clearly there are lot more opportunities for lighting going forward. There is still a large part of the country which is not electrified, and we believe that there is a huge opportunity for several years to come in rural markets as well.
Currently, we are split roughly 60:40 – 60 per cent home and 40 per cent professional. However, the opportunities for LED are across all segments – be it retail, hospitality, street lightning or even homes. So, we are expecting growth in all of these segments.
Q. Coming to the price-point, there is considerable difference between LED and CFL lights. What is the strategy adopted to convert consumers from CFL to LED?
Sumit Joshi: About 18 months ago, LED was seven to eight times the cost of a regular CFL. Now, this has come down to three or three-and-a-half times the cost. Looking ahead, we expect this to come down further to about two or two-and-a-half times the cost of CFL.
LED not only saves energy, but also lasts for a long time, so we believe that when the pricing comes down, LED lighting will take off. People are becoming aware of the benefits of LED lighting; it will start from the top, but I am sure that it will get to the masses as well.
Q. What is the current market size and expected growth for the LED segment and your share in this?
Sumit Joshi: A Frost & Sullivan study valued the LED lighting market in India at around $140 million in 2011. The study also pegged the expected market size to grow to around $500 million by 2015. That’s a growth rate of around 46 per cent CAGR and that is the rate at which it has been growing. Currently, our share in the LED space exceeds 46 per cent.
Q. The other concern for companies is the persistent high inflation. How has this impacted you?
Nirupam Sahay: In our case, because 90 per cent of what we sell here is actually local for local, inflation has had very little impact. The impact of the drastic rupee depreciation has also been very limited. Over the years, we have become more locally relevant, and this has ensured that there has not been much of an impact on margins.
Q. What are the challenges that the industry faces?
Sumit Joshi: The biggest challenge is that we need to make the consumer aware. As a market leader, we need to actively work to get the cost down so that more people can afford it, but I think an initiative like this is basically creating an aspiration to change from normal to something like LED, which is much better.
Q. What are the emerging consumer trends?
Nirupam Sahay: With increasing number of younger people buying new homes, the involvement in what goes into the house is increasing. So, we are finding younger couples and younger families who are now interested in lighting and, therefore, the importance of lighting and creating ambience through lighting is increasing. That is a very positive trend and that is where LED fits in beautifully. On the professional front, the government is being extremely pro-active in driving energy efficiency, so whether it is the Ministry of Power or the Bureau of Energy Efficiency, they have been very pro-active in driving a lot of policies, which are encouraging customers to shift to energy efficient lighting.
Q. You have come out with a new campaign, could you tell us what was the insight behind the campaign?
Sumit Joshi: It is a brilliant period for the lighting industry, because there is so much that is possible now with LED, lots of things that were not possible with conventional lighting are becoming possible now. Lights will play a bigger role in everyday life apart from the main functional kind of lighting. Philips is the only player that is making lot of developments on this front locally. So, the idea of behind this marketing campaign is how do we bring forward the dynamism, modernity, and possibilities which LED offers and present it in front of the consumers. Our agency, Ogilvy & Mather, came up with the idea of using the song ‘Saara Zamana Haseeno Ka Deewana’. At the same time, it is also important for brands to use a celebrities intelligently, and the thought was this iconic sing was not only about Amitabh Bachchan (in the movie ‘Yaarana’), but also about the suit of light and this was a great combination. While it will be amazing for people to see Ranbir Kapoor in the song, for us as a lighting company, we had an opportunity to showcase the possibilities with lighting. Whatever you see on the screen is LED lighting and we thought it was a great idea to basically recreate that magic, create that desire in people to see and ask for more.
Q. Marketers today focus a lot on experiences. How are you leveraging this space?
Sumit Joshi: We have 90 exclusive brand outlets – Philips Light Lounge, where consumers can experience the different kinds of lighting possibilities. We also introduced a Concept Store last year, which has been branded Light Next and is about technology and what will be the next phase of lighting. It showcases all the professional applications which lighting and LED in specific will have. We are trying to create these experiences through the retail footprint that we have got.