MUMBAI: Godrej Appliances, a division of Godrej and Boyce Mfg Co Ltd, will not venture into new product categories for now. The company, which is targeting an annual growth of over 20 per cent, however, is targeting to break into the top three home appliances players in the country by 2020.
“New products will come from the adjacent space of existing categories. We are not entering new spaces and that is a conscious decision,” Kamal Nandi, business head and executive vice-president, Godrej Appliances told Express.
Godrej Appliances have four broad products including refrigerators, washing machines, air conditioners and micro waves. According to Nandi, there is tremendous potential in these products as penetration is currently dismal.
For instance, only 22 per cent of the households use refrigerators, a mere nine per cent own washing machines, four per cent have air conditioners and three per cent possess micro waves. “With affordability, we clearly see penetration increasing in the next five years or so. Therefore, the potential is huge within existing products,” Nandi reasoned.
Having started operations in 1958, it has come a long way and is currently ranked four. “We like to overtake our immediate competitor. We started this exercise three years ago and we have narrowed the gap with our competitor and hope to surpass by 2020,” he said.
Currently, 60 per cent of the company’s revenues come from the refrigeration segment, while 24 per cent is from the air conditioning segment and the remaining is from other products like micro waves and washing machines. It operates two units, one each at Mohali and Pune, with a combined production capacity of 30 lakh refrigerators, eight lakh washing machines and five lakh air conditioners.
Godrej Appliances, which contributes roughly 35 per cent to the overall Godrej Group’s business, is expected to grow over 20 per cent and cross the `4,000 crore turnover during the fiscal.Meanwhile, with the incoming GST, prices are likely to rise by 2-3 per cent, but unlikely to slow down purchase decisions.
“In fact, for consumers this is an opportune time as distributors and retailers are offering massive discounts on one-year old stocks in the run-up to GST implementation,” Nandi explained.