South Korean major Daewoo eyes pan-India presence by Diwali this yr

South Korean major Daewoo has re-entered the Indian market in collaboration with Kelwon Electronics and Appliances, which has the exclusive brand licensee for Daewoo in India. The company has already launched more than 30 products in various categories including power and energy, and consumer appliances among others. It plans to introduce another 100 products from Daewoo stable by the end of this year. In a conversation with the Bizz Buzz, HS Bhatia, MD of Kelwon Electronics & Appliances said that Daewoo will have an all-India presence by the end of this year. He also said that around Rs 300 crore will be spent as part of the capital expenditure plan for establishing the South Korean brand in India. Bhatia said that Daewoo’s products are getting good responses from the market given its brand recall in India. He also said that despite the competition, the market is too big for everyone to grow and Daewoo’s brand value is putting the company on a good stead

Daewoo has re-entered the Indian market in collaboration with Kelwon Electronics and Appliances, which has the exclusive brand licensee for Daewoo in India. How did the collaboration happen? Can you throw some light in this aspect?

Daewoo was looking for a partner for Indian market. As you know, Indian market is doing pretty well with high economic growth. With rise in income, life styles are improving across the country. So, the South Korean major was looking for a partner, which has the infrastructure, sound distributor network, local contacts with manufactures and relationship with all stakeholders. As I have more than 30 years of experience with multinational enterprises like LG, Airtel, and Videocon with Kelwon Electronics and Appliances having a sound footing in Indian market, Daewoo selected us. So, our background and business plan helped us to clinch the strategic alliance.

Can you provide a brief overview about your current operations in India? How many products of Daewoo have been launched so far? What is the geographical coverage as of now?

We make some products, and we assemble some products to take the advantage of ‘Make in India’ scheme. We import some products and components from outside and assemble those in India and then market in India. Currently, we are present in power and energy segment. This segment consists of all kinds of batteries like solar batteries, automobile batteries, and inverter batteries among others. Then, we have CPUs, UPS, solar panels, and other related items. So, we are fully into power and energy.

Secondly, we are heavily into electronics. In electronics, we are into all kinds of products. In large appliances, we have LED televisions and audios. In small appliances, we have mixer, grinder, irons, toasters, and others. In mid appliances, we cover water purifiers, air coolers, fans and related items.

We have plans to enter the EV space in the two-wheeler segment. We are planning to foray into this new space in a year or so. Daewoo has the philosophy of providing innovative products powered with latest technologies at affordable price.

We started our operations in October 2023 and in the first six months, we have launched our products, short-listed our suppliers and vendors, hired and trained the manpower, address the supply chain factors like warehouses, and many more things. Post all this operation, we have already started launching our products in the market. As far as market coverage is concerned, we have covered North India as of now. After this phase, we will enter the West Indian market after which South Indian market will be tapped. Hopefully, by Diwali this year, we will have a pan India presence.

So, the current collaboration is end-to-end from manufacturing to sales & maintenance. Is that the right understanding about this alliance?

Yes, it is correct. Our collaboration is end to end. Even finalising the products, selection of products, market research, and others come under the purview of our alliance. Because, there are more than 200 products of Daewoo. We decide which product to be launched based on our market research. In terms of technology, branding, and marketing; Daewoo supports us. But all the decisions about which product to be launched, how to source, whether to import or assemble here in India, the USP of the product and related matters are taken locally by us. In our board, there is a Daewoo official, who resides in India. So, we work very closely with the South Korean team.

How many products are currently covered under this alliance?

Over 150 products are covered under the current arrangement. About 30 products have already been launched. More than 100 products will be launched by Diwali this year. As far as manufacturing is concerned, we do it through third-party. As I have mentioned earlier, it depends. We import the products, or assemble them in India or do the contract manufacturing. It varies from product to product.

How do you view the competition in the consumer appliances and other segments in which you operate? Do you think, Daewoo’s products will see good traction in this intensely competitive market?

We are a country of 140 crore people and people of different income levels are present. People don’t know many brands beyond the top ones. In that respect, people in India know Daewoo and the brand has a name recall because of their 50-year old legacy. So, there are a lot of advantages like we are a global brand. This brand has a long legacy, which makes its acceptable to people. Moreover, in India, there is an anti-China sentiment that is going on. In that sense, we are getting a lot of good response as we are not a Chinese brand. As a Korean brand, response to our products is very good. Rest all is dependent on your product packaging. How to package your product is very important to be successful in this market. Other features like technology, price points and other related factors make a brand successful. But, we have a natural advantage than others like a Chinese company.

As far as local or regional brands are concerned, consumers want to associate themselves with good brands. For middle class and upper middle class, brands do matter. Also, the Indian market is so diverse that not everyone is on the same page. There is a customer for every slab. So, the market is very big for everyone to grow. Our products have a strong value for money proposition. Therefore, they have received good response.

What is the capital expenditure plan as of now? How is it going to pan out in coming years?

We have a capex plan as we have to buy stocks, expend on marketing, hire people, along with salary and office expenditures. We also have warehouses. Without manufacturing, we are at first investing about Rs 300 crore. With manufacturing, this investment amount will exceed Rs 500 crore. These investments are being done jointly. Major investments will be done by India.