Electrolux Plans Hi-Tech Consumer Durables

Ever wondered why the Rs 750 crore home appliances major, Electrolux Kelvinator Ltd (EKL), pushed the Indian-made refrigerators Kelvinator and Allwyn, rather than its own powerful brand in the white goods industry?

Here's why: It was preserving its big brand name for a range of hi-tech consumer durables it is launching in India. EKL is to launch a gamut of premium appliances under the Electrolux brand name, which include frost-free refrigerators, washing machines, microwaves, cooking ranges, deep freezers. It is also introducing the Whitewestinghouse air-conditioners and Cyclone vacuum cleaners. Most of these appliances are imported, which makes them expensive, but the brand equity of Electrolux justifies the premium.

 

For the up-market Electrolux appliances, EKL intends to sell the convenience proposition. It is following the international trend of showcasing all its appliances in kitchen-like settings in large showrooms. This year, EKL plans to set up nearly 25 exclusive showrooms across the country. "The idea is to sell the whole kitchen, not the appliances individually," says executive vice president (sales) Arun Sharma.

To put things in perspective, the company used the Electrolux brand name for refrigerators for a short time three years back. But once the Kelvinator and Allwyn brands were available, the Electrolux brand was phased out. Company officials say had the brand been encashed for EKL's mass market products, it could not have been leveraged for the premium end of the market.

Predictably, the company's marketing plans for different brands are in line with their respective positioning. While the Electrolux appliances are positioned as introducing fresh ideas for convenience, Allwyn is pegged as being durable, while Kelvinator, a cooling specialist in refrigerators.

A thin line divides the market for the Kelvinator and Allwyn brands. While the former targets the upper end of the middle income group, Allwyn expects to grow in the rural markets. "It contributes 15 to 20 per cent to our turnover, and can grow at a rate of 25 per cent," says Sharma.

EKL now plans to send display vans carrying refrigerators and washing machines to villages. "The idea is to create awareness and aspiration. Even those who cannot afford these appliances today, will think about them when they can. The objective is to be the first to reach them," says Sharma.

Last year, the company sold one lakh refrigerators in Punjab, of which 20,000 to villages with a population of about 5,000. For Kelvinator, the company is planning cosmetic and technical upgradations.

In the refrigerators segment, Allwyn and Kelvinator are market leaders. The two brands combined, the market share of EKL in the direct cooling segment is 22.7 per cent, followed by Whirlpool at 22.4 per cent and Godrej at 17.9 per cent. The company is targeting a turnover of Rs 1,000 crore this year, with an average growth rate of 20 to 25 per cent for the next three years. Refrigerators and washing machines will continue to be the company's flagship products.

EKL aims to sell one million refrigerators (all brands combined), one lakh washing machines and 50,000 high-end Electrolux appliances.