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It is not easy to move out of one's comfort zone. But electrical goods majors Anchor and Havells are attempting to do just that. Anchor, a 50-year-old electrical goods brand, is synonmous with switches in the west and south of India. Mumbai, in particular, is a market dominated by Anchor. Rival Havells, on the other hand, finds strong resonance in the north, south and the east of India, but Mumbai, a key electrical goods market in the west, has largely eluded it.
Noida-headquartered Havells is now attempting to fill this critical gap by quietly increasing its distribution beyond traditional channels, and targeting influencers such as contractors, architects and electricians, who have a direct line of communication with consumers.
Anil Rai Gupta, deputy managing director, Havells India, says, "While we are not ignoring the traditional wholesale channels such as Lohar Chawl (near Crawford Market, in Mumbai, famous for selling electrical goods), influencers play a key role in the business too. At the end of the day, as a consumer, you count on what your electrician or contractor would recommend to you in segments such as switches. It takes some time to establish your presence in a new market. We are doing just that."
Gupta says that he has 125 dealers distributing his company's products in Mumbai out of a total of 485 in Maharashtra. "That's a fairly big number for a market like Mumbai. This way we are ensuring that every area within the city is covered," he says.
But taking on Anchor in its home turf is hardly going to be easy. In its last mass media campaign earlier this year, Anchor played on how the consumer has a huge recall for its brand: Even as an architect-designer takes the actor Boman Irani (the consumer) through the blueprint of his swanky, avant-garde bungalow, Irani sleeps through the entire session save for the times when the brand for switches has to be discussed. He insists they be of Anchor.
Almost 55 per cent of Anchor Electricals' revenues of Rs 1,360 crore comes from switches alone. In terms of market share, Anchor corners about a half of the Rs 2,500-crore organised electrical switches market. No surprises for guessing that Mumbai plays a big role here, though the brand in the last few years under Panasonic, which acquired it for Rs 2,000 crore in 2007, has rapidly moved to markets in the north. These include tier II and III towns where it has the brand Penta, a traditional piano switch that retails for as low as Rs 19.
But targeting the hinterlands in the Hindi belt is not what Anchor has been upto in the last few years alone. The Mumbai-headquartered company has a full range of products for the urban consumer - from the entry-level modular switch called Ryder that retails at Rs 64 to the popular Roma that sells for Rs 96 to the premuim Woods and Viola that are available for Rs 104 and the imported Ave that comes for Rs 185.
These products, analysts say, are intended to challenge competitors such as Havells, which have created a niche for themselves with premium-priced modular switches targeted mainly at the urban consumer in markets such as Delhi, Karnataka, West Bengal and Tamil Nadu.
Takaki Oguri, joint-managing director, Anchor Electricals, says, "Our strategy first has been simply to fill up every product gap that we may have. The second has been to ensure that geographical gaps are covered, if any. This way we ensure that we continue to be a dominant player in organised switches."
Anchor has attempted to fill these geographical gaps by setting up offices in places such as Allahabad, Varanasi, Kanpur, Ghaziabad and Noida, besides Lucknow in Uttar Pradesh. It is replicating this model in neighbouring states such as Haryana and Punjab too.
Havells, while targeting the hinterlands now with its Reo brand of piano switches, continues to occupy significant mindspace among urban consumers in the north.
So, Anchor's aggressive play in urban and rural areas in the north, say experts, is a clear signal that it is ready to take on Havells in its home turf.
Gupta chooses to play up the work that Havells has been doing in Mumbai as a counter to Anchor's move up north.
He says, "We have been growing faster in Mumbai than our traditional strong markets in the north, south and east of India. We have a new Mumbai head in Amit Bahuguna, who has come from Samsung. We earlier had an ex-Procter & Gamble hand, Deepak Agrawal, who has moved on. Our approach in Maharashtra has been to have separate teams targeting each city such as Pune and Nagpur, besides Mumbai. These are large centres that have the potential to give us good business. We recently had a consultants-seminar for the Maharashtra market, where we invited key influencers to visit our factory in the north to give them an idea of the products we manufacture and our quality standards. All of this will eventually pay off," he adds.
