Consumer durables manufacturer, Godrej Appliances, is focusing on the 5-star segment of the air-conditioner market, in order to capitalise on the growth during the upcoming summer season. The company, which currently enjoy a 12 per cent market share in this segment, plans to increase it to 15 per cent this year. Godrej Appliances currently has six per cent of the total market of four million ACs worth Rs 10,000 crore, and is expected to increase its share by another 1.5-2 per cent during the year, said Kamal Nandi, business head & EVP of the company.
Almost 22 per cent of this four million unit AC market is the five-star, energy-efficient category and the company's focus would be in this segment, he added. The new launches, especially the energy-efficient inverter AC, would be undertaken with a target to increase the market share in the five-star category.
The company was not present in the inverter AC category last year.
Godrej Appliances has recently launched an energy-efficient air conditioner under its premium sub-brand NXW, with an Indian Seasonal Energy Efficiency Ratio (ISEER) of 5.2. ISEER is a new rating system introduced by BEE (Bureau of Energy Efficiency) in June 2015, for inverter ACs, which mandates a minimum rating of 4.5 to get the ISEER stamp.
While the year 2015 was not encouraging for both ACs and refrigerators, owing to the low demand due to various reasons, sales have already started picking up from December and the company is expecting good growth this year for AC products.
The company is launching 30 AC models this year and five in the inverter AC category, covering all the capacities with greater focus on green products, Nandi added.
As part of plans to increase market share in the segment, it is looking at expanding its retail reach. Godrej Appliances has a distribution network of 26,000 outlets, of which 12,000 sell ACs. It is planning to expand this to 15,000 outlets in 2016-17.
The company has enhanced its manufacturing capacity by around 30 per cent, and expects it be enough to cater the requirement for the next couple of years. It is also planning to double its marketing spend on AC sales, to 40 per cent of its marketing spent on brand, he added.