CHENNAI: Booming demand from the consumer appliances market in India has pushed premium players like AO Smith to expand availability of their products to Tier II and Tier III cities. The company expects to make its water purifiers available at nearly 46 cities by 2018, thereby reaching nearly 75 per cent of the customers in India.
“Earlier, we strongly focussed on the metro cities, but India is no more about the six metros. When it comes to products that involve basic hygiene, people become brand conscious, they look for the latest technology and proper after-sales service,” said Parag Kulkarni, Managing Director of AO Smith India Water Products Private Ltd.
When it comes to tier II and tier III penetration, Tamil Nadu and Maharashtra are markets that are very significant for water heaters and purifiers. AO Smith has physical presence in four locations in Tamil Nadu and Maharashtra. “In Tamil Nadu, our workforce is located in Chennai, Madurai, Coimbatore and Trichy,” Kulkarni said.
The Milwaukee-based water treatment company also said it sees India as a key growth driver among other international markets, where the water purifier business is pegged at `3,500 crore. The firm’s revenue from India grew nearly 40 per cent in 2017.“We are far more premium than most of the products in the Indian market, but our growth was more than double of the 13-14 per cent that the industry had reported in 2017,” he claimed.
The company, which has priced its water purification appliances ranging from Rs13,000-23,000, said almost 65-70 per cent of its growth in the water treatment business in India came from the premium Rs 18,000-23,000 segment.Kulkarni said the company plans to focus on newer technologies in the water purifier space for India, which is expected to contribute 30-33 per cent of their total product sales from the 20 per cent last year.