Havells to focus majorly on rural markets, launch customized products

Havells is going to focus majorly on rural markets as one of the first to do so in the electrical goods industry by creating a dedicated sales channel and launching customized products, chairman and managing director Anil Rai Gupta said.
Gupta said unlike the FMCG industry, there is no distribution channel for the electrical industry in the rural markets which are mostly fed from the main towns.

He said Havells intends to reach markets with a population below 50,000 and has started with lighting, domestic wires, electrical products, fans, small appliances and will eventually add large appliances like refrigerators and air-conditioners.

“There is a rise in income in rural areas, road infrastructure has improved, electricity in every village whereby there is a good traction in rural markets. We have set up 35,000 outlets in rural markets and the distribution investment is now paying, with almost 4-5% of our sales coming from rural markets as compared to nil even 3-4 years back,” said Gupta.

Talking about the overall recovery of sales post the second Covid wave, Gupta said while last year the recovery was quick, this year it is slow but getting better every week.

“Things are coming back and if we average it out, it is actually better than last year. The industrial and projects segments are also doing well. There are no signs of down-trading by consumers and people are ready to invest in good products,” said Gupta.

Havells has no plans to merge itself with the consumer electronics arm, Lloyd. Gupta said the synergy in selling between both the brands is only about 30-35% since large distributors of electrical consumer durables do not sell appliances and vice versa.

“The distribution network of both the brands converges only in large format stores and ecommerce. We also have back end such as supply chain, IT and finance which are synergized,” said Gupta.

He said once the AC plant for Lloyd became operational in October 2019, there were positive changes in supply chains but two summer seasons were lost due to Covid. He said the brand has forayed into refrigerator space and revamping the washing machine line up with in-house manufacturing whereby it wants to gain some meaningful market share in large appliances over next 3-4 years.

“We need four major products such as AC, refrigerator, washing machine and TV to become a sizeable player in the consumer electronics business,” he said.