Godrej Appliances targets top 3 spot in home appliances market in next 3 years
The company is confident of reaching $1 billion in sales by FY25 and expects to see continued strong growth in the coming
Kamal Nandi, Business Head and Executive Vice- President, Godrej Appliances
Godrej Appliances, an arm of Godrej & Boyce, is aiming to be amongst the top three players in the home appliances industry in the next three years. It is currently the fourth largest player in the overall refrigerators category, number six in washing machines category, number five in air conditioners, and number three in chest freezers. At present, the company has an annual capacity for one million washing machines, 3.6 million refrigerators and one million ACs. Interestingly, in the first quarter of the current fiscal, Godrej Appliances’ sales grew over 60 per cent y-o-y, backed by a significant improvement in consumption, whereas the industry saw a growth of around 30 per cent during the period.
The company also expects to increase its market share in Bengal across the three categories - air conditioners, refrigerators and washing machines. Going forward, the company’s growth path is driven by a growing desire of consumers for large capacity, feature-rich, aesthetically appealing, and advanced appliances that make life easier or more comfortable for them. The company, therefore, is adopting and embracing newer and newer technologies, particularly artificial intelligence (AI) and all that quite aggressively. Quite significantly, the company is also witnessing a significant and in fact much higher growth in tier-II, tier-III cities and rural markets, compared to tier-I cities and metros.
Speaking to Bizz Buzz, exclusively, Kamal Nandi, Business Head and Executive Vice- President at Godrej Appliances, explains how the company is confidently moving towards becoming a $1 billion company in FY25.
How big is the overall appliance market in India? At what rate is it growing?
Catering to rising demand for home appliances, India’s appliances and consumer electronics market size is Rs 75,000 - 80,000 crore, and is growing at 11 per cent CAGR over last 5 years, and is expected to continue its upward trajectory in the coming years.
What is Godrej Appliances' current market share?
Godrej Appliances expects to increase its market share in Bengal across all three categories air conditioners, refrigerators and washing machines.
How is the company adopting and embracing newer technology, particularly AI and all? How does the company stand to gain through the adoption of AI and other new technology? How do consumers stand to gain through the use of these AI-powered products?
Consumers today have become more tech savvy and appreciate intelligence in their products- be it devices or appliances. There's a growing desire for large capacity, feature-rich, aesthetically appealing, and advanced appliances that make life easier or more comfortable for consumers.
Catering to this demand, earlier this year, we had launched our Eon Vogue series of wood-finish appliances - refrigerators and air conditioners that was well received in the market. Our Patented Anti-leak ACs also garnered a very good response.
For the upcoming festive season, we are thrilled to showcase our extensive product lineup with intelligent AI Technology that optimizes performance and adds convenience. Godrej’s range of appliances in Washing Machines, Refrigerators and Air Conditioners come with in-built intelligence that monitors usage, senses various parameters like ambient weather, food load, cloth load or cloth balance among others depending on the appliance and accordingly optimises the machine’s performance. This makes the products more user friendly and also optimizes resources like energy or water. Our approach to AI technology is in line with our larger philosophy of Things Made Thoughtfully – which revolves around delivering relevant technology that adds genuine value to consumers through greater convenience or through resource conservation.
The company has also added new machines in the larger capacities given the growing trend towards the same amongst consumers like 400+ Litre Frost Free Refrigerators, large 10 Kg Front load Washing Machines, and 2.5 Tr Air Conditioners. Given the company’s commitment to energy efficiency, Godrej also has on offer India’s most efficient refrigerator consuming less than 100 units of power per year, High efficiency 5-star Air Conditioners, Front Load Washing Machines and Deep Freezers. The company has also lined up a strong portfolio of Front Load Washing Machines with a slew of exclusive offers that will benefit consumers.
What are the incremental sales you are looking at from this new range of innovative products? How do you expect demand to pick up during the coming festival season?
We started this year on a good note. 2024 summer was exceptional for the industry as well as us, especially for cooling categories, we witnessed AC growth at 2.5X of last year across the country. The good news is that other categories have also been growing well – not just in premium but also in mass segments. Having said this, premiumisation as a trend is expected to continue.
With a strong line up of new additions to our premium product range - larger capacities and intelligent technologies, along with exciting offers, we expect 40 per cent higher consumption during the upcoming festive season this year in comparison to last year.
How confident are you of becoming a member of 'Billion Dollar Club'?
Last year, pan India we crossed Rs 6,000 crore and this year our target is to cross Rs 8,000 crore. On the basis of our summer performance, we are confident of growing by more than 35-40 per cent which will help us move towards becoming a $1 billion company in FY25. Therefore, in next few months, we will be part of the ‘Billion Dollar Club'.
What is the breakup of urban and rural demands for your products? Going forward, where would the maximum growth come from- metro cities or tier-II, tier-III cities?
This varies by category. Appliance penetration traditionally has been lower in rural and is led by the urban markets. AC is far more urban skewed than Refrigerators. However, with electrification and improvement in access, we expect penetration levels to improve. Last year the industry saw maximum growth in the less than 1 Lac population towns across all key categories.
