Westinghouse aims to garner 5-10% of consumer durables

US-based consumer durable firm Westinghouse Electric Corporation forayed into the Indian home appliances market sometime in November 2011. The management has set itself an ambitious target of Rs200 crore in sales by 2014-15. R Venkat, CEO & Director, Westinghouse Appliances India Pvt, in conversation with Ashish K Tiwari talks about the company’s road map for the Indian market. Edited excerpts:

Could you briefly tell us about the company and its offerings?
The brand, Westinghouse, was established in the US some time in 1886 and has gone through various stages of ownership changes. A part of Westinghouse Electric Co, it underwent major restructuring exercises in 2010-11 wherein CBS is now the licensee for brand Westinghouse. The operations in India come under the Dubai-headquartered Mapana Middle East FZ Co and there is another company W- Lifestyle which is a global licensee for the brand operating out of Hong Kong. 

We launched operations in India in November 2011 and are currently selling our products primarily in the northern region i.e. Delhi, Haryana, Punjab and Jammu & Kashmir. Targeting the fast-growing Indian retail home appliance market, our range comprises small domestic appliances, personal care, garment care, heaters, baby care and premium fans, to start with.

Despite being a heritage brand, you’ve taken really long to enter the Indian market.
The Westinghouse restructuring exercise only got over early last year and the management took some time to identify the right product mix to make the right impact here in India. The Indian market is the second-largest in the world which is growing by leaps and bounds and we felt the time was right as purchasing power, buying behaviour and lifestyles were all changing.

But you already have competition from Korean and Japanese brands that have captured a significant slice of the market?
We are a young company and certainly can learn quickly from our competitor’s mistakes and that’s how we intend to operate in the Indian market. We are carefully studying the market demographics and putting together a multi-pronged strategy. We will focus on innovating and offer products that will give customers a better choice than what is already available.

Are your products available across the country? Which existing brands would you be competing with directly?
Not as yet. We are doing a phase-wise expansion, starting with North India followed by South, West and East. The focus will largely be in tier I and II cities. We are currently selling through 200 stores in Delhi, NCR and J&K. By August this year, we will be present in all the 42 cities that are potential markets for our product range across the country. Competition will be from brands like Panasonic, Philips and Indian companies like Havells, Usha Lexus and Bajaj Appliances.

Which are the other product categories you are planning to add to your offerings?
High-end and decorative ceiling fans are a category we have very recently introduced in the market. These are dual-technology, summer-winter fans that can run clock-wise and anti-clockwise and come with light attachments. We currently have 8 models, but will bring in the entire range of 36 models gradually. These fans are priced anywhere between Rs7,000 to Rs30,000 and are a niche product. Then, we have the lights category with a range of CFL and LED lights followed by air-conditioners. While lighting products will happen in the next six months, a decision on air-conditioning products will be taken how the market situation this year will be.

But the industry seems to be fairly bullish on the AC product category, especially when temperatures are soaring across the country.
Well, last year wasn’t very good for the AC market which witnessed a negative growth of 20%. My understanding is that every major brand in the AC category is having a tough time and an increase in raw material costs by 20-25% has only added to the trouble.

What are your revenue targets for India? How would you increase brand visibility?
Once presence is established in all the 42 cities across the country for our over 100-odd stock keeping units (SKUs), we will start working on the visibility side. The plan is to invest to the tune of Rs70 crore on marketing and product development in the next three years. We want to acquire a significant share of the estimated Rs6,000-crore home appliances market and are targeting Rs200 crore topline by 2014-15. The idea is to get at least 5-10% market share of the organised brand segment in India.

Where are you sourcing all products from?
Most companies follow the original equipment manufacturer (OEM) approach which is what we are doing to ensure a leaner organisation. We are working with third-party manufacturers in China and some from Indonesia. Lights will come from the Middle East. Some of the products like heaters and irons that require Bureau of Indian Standards compliance will have to be manufactured locally. So, wherever we feel there is a cost benefit in terms of sourcing, we will get the products made from there.

What is your distribution strategy in India?
We will be using a combination of traditional and contemporary approaches. Carrying and forwarding (C&F) agents will be out primary strategy followed by online with the likes of fipkart.com and selling through modern retail chains. Some of our products are also targeted at the institutional market so we will use that distribution channel as well.