Eveready: From Red to 'LED'

The company wants LED-based flashlights and lighting solutions to account for a quarter of its turnover in two years.

Eveready is no longer just a battery maker. And Deepak Khaitan, executive vice chairman and managing director of the India’s largest battery company, says the company’s new mantra is “to light up people’s lives”.

While that sounds like a great social responsibility mission, Khaitan is candid enough to say that the approach makes eminent business sense, too. ‘Once a person gets used to light, he will never go back to darkness’ is the Eveready boss’s philosophy.

“Lighting up lives” has also meant a huge change in the positioning of the company, which was largely known as a dry cell battery giant with more than 46 per cent market share.

Eveready had created ripples in the market during the early nineties with its "Give me Red" campaign, which changed the way batteries were perceived. The ad highlighted the colour “Red” which has been the central point in its brand theme and gave it instant recognition. Khaitan can now start thinking of changing the brand theme to “Give me LED”

Here’s why. Eveready, which is targeting to double its turnover to Rs 2,000 crore in two years, says the share of batteries in the total turnover will come down from the current level of 70 per cent to 45 per cent, while flashlights and lighting solutions would account for around 25 per cent.

And the star attraction in the lighting space would be Eveready’s battery-operated LED (light emitting diode) - based lamps for household consumption. Branded HomeLite at the time of launch in July 2009, it will be rebranded Eveready Ultima, the umbrella brand for the company’s high-end products. The name Ultima was chosen as it connotes superiority. “When we entered the market, the product was already available. For one product of ours, there were five Chinese ones available at a much lower price. But eventually people realised that our products were superior,” said Khaitan.

Khaitan has a point, as he expects Ultima to sell more than two million pieces by the end of March this year, with rural sales accounting for 70 per cent of the volumes. The product has gained significant traction in power-deficient states such as Uttar Pradesh, Bihar, West Bengal and Assam. Khaitan believes that sales from the countryside would increase five times in the next couple of years.

Apart from the innovativeness of the product, what has helped is Eveready’s formidable distribution network. “We can even reach out to villages that have a population of 50,000,” says Khaitan. Eveready’s salesmen touch nearly 3.2 million of India’s 12 million retailers at least once a fortnight.

Khaitan is also banking on the rising prosperity in the villages. “With the growth in GDP (gross domestic product), 40-50 million will come out of poverty. Moreover, the cost of food is going up and farmers are making more money,” he says.

Clever pricing is clearly one major reason for the success of the product. The LED-based battery operated lamps are priced at Rs 250-450 and a month’s battery would mean shelling out Rs 45 at one go compared to kerosene, which is bought almost every alternate day at Rs 2, albeit an expensive option in the long-run.

Khaitan knows the price dynamics. “For volumes in India, the price point is very important,” he says. The company is already planning to launch the lamps for as low as Rs 100 a piece. Though similar products are available at a lower price, Khaitan is unperturbed. “We want them to be there in the market. Once people get used to light, they can choose the superior product.”

The business philosophy obviously is simple : as long as missions like “power for all” remain only a vision, sales of battery-operated lamps will surge. Once villages are electrified, they can switch to bulbs. And Eveready sells bulbs, too.