Summercool Aims To Reach Rs 800 Cr Revenue In 5 Years

Consumer durable space is growing at a fast pace in India with many brands competing to garner the market share. Many foreign firms have a dominant position in many consumer durable products in India as the country lacks domestic brands. As the country promotes ‘Make in India’ theme, Summercool Home Appliances is one such brand that stands out. The 25 years brand has made a good brand recall in the air cooler space and made its mark as it competes with several domestic and foreign brands. In a conversation with the

Bizz Buzz, company’s Director of Finance & Operations, Abhishek Gupta said the company is increasing its manufacturing capacity with new units in Ghaziabad. He said that the company’s newly launched products in washing machine, LED TV and others are growing well. According to this second-generation scion of Summercool Group, the company is likely to double its revenue in the next three to five years

India is promoting ‘Make in India’ in a big way and aspires to be a powerhouse of manufacturing in the world. How do you view the steps taken up by the Indian government for promoting domestic manufacturing?

We fully promote ‘Make in India’. If you see, the electronics sector is witnessing a growth rate of 25-30 per cent every year. In this perspective, the future is very bright for domestic manufacturers. Moreover, changes in technology are making waves in the consumer durable sector, be it appliances or related segments. Therefore, we promote Make in India, Vocal for Local kind of movements because we believe that we produce the best quality products. Our prices are also affordable, which can be bought by any person, living in the hinterland of the country.

Can you give me some overview about the evolution of ‘Summercool’ as a company? What are your experience as a second generation entrepreneur?

Yes, we are second generation entrepreneurs involved in the business. We have seen our company grow from scratch. My father and his brother (both the siblings) have started this business close to 25 years back. We used to stay in a place, where we had a small factory on the ground floor and we lived on the first floor. From that time, we have seen the company growing to this stage. Our company started in Ghaziabad and we had one factory when the company started. From that one factory, we have now more than seven manufacturing units in this area.

How many products are being manufactured by Summercool now?

Around 100 items including air coolers, washing machines, LED TVs, ceiling fans, heaters, mixer grinders are manufactured in our facility. We also trade in another 100 products in the home appliances space. All our manufacturing units are located in the Ghaziabad area and we have a total of seven units.

There are many established brands in the segment you operate. Many large MNCs have a near dominant position in many appliances. Can you tell us what is the differentiator of your products as compared to others?

Firstly, all our products provide value for money. Our target customers are in the tier-II and tier-III cities. We mainly focus on this segment of the population. We have factored in the price range, taste of consumers and quality of products that usually customers seek in the small cities. That is the reason that we are able to compete with all established brands, whether domestic or foreign. Moreover, all our products are delivered at customer’s homes. The items are delivered within 24- 48 hours. These are the unique differentiators, which make us stand out in the current market.

Technology is changing very fast in the consumer appliances space. We see more products are getting embedded with chips, turning them into smart devices. Can you tell us how are you leveraging technology to stay competitive in this market?

We focus a lot on the technology space as it is ever evolving. We try to remain at the top of the game by following all the current trends. We have our own inhouse research and development (R&D) team that ensures that all our products have latest technology features. All product designs, development and technology features are planned by our R&D team. We have more than 20 people, who are part of this team. We also give a lot of emphasis on the quality of products. Therefore, quality assurance team does all the quality checks of our products.

Which is the biggest vertical for you in terms of product category? Can you give us a view in this aspect?

As far as volume is concerned, air cooler is the biggest segment for us in terms of volume. Even this category gives us the largest pie of our revenue. Because it is the oldest category in our company and the business has started from this space. So, the brand ‘Summercool’ has started from air coolers. We launched the LED TVs two years back and entered into washing machine as a category last year. So, many of these segments have been launched in the recent past. However, the numbers coming from these segments are really encouraging. We are growing fast in these segments also.

Can you throw some light on the distribution model? Which part of India provide you with maximum sales revenue?

We are a Pan India company, maximum sales come from Uttar Pradesh. A major chunk of our revenue comes from northern states. We have entered into Maharashtra, Hyderabad and some other states. As far as distribution reach is concerned, we have more than 500 direct distributors. Our products are available in around 10,000-12,000 stores. We get 10 per cent of our sales in online channels and the rest 90 per cent comes from offline channels. We also have our own e-commerce channel, through which we sell our products.

What is the revenue of the group as of now? What are your expectations going ahead?

The whole group has a turnover of around Rs 400 crore. We are growing at healthy rate in past years. You have to understand that there is bit of cyclicality attached to our business because intense summer leads to higher sales of air coolers. With launch of our other products, we hope to double our revenue in the next three to five years.

Do you have plans to sell your products outside India in the near future? Can you give us some perspective in this matter?

We have entered the Nepal market. We have plans to sell our products in more countries going ahead. We are evaluating plans to enter UAE and South Africa. We are also planning to ramp up our production capacity in the air cooler space. Currently, we do have a manufacturing capacity of 5,000 units per day, which will soon be ramped up to 8,000 units per day. We have a plan to make it 10,000 units per day in the future.