Small towns and small products are what would drive the Rs 27,000-crore consumer durables market in the coming months.
If you have Tata coming up with a water purifier for less than Rs 1,000, majors like Philips and Godrej are also competing in the market for the cheapest, cleanest glass of drinking water.
Sensing the huge potential of small-town India, electronics firms LG Electronics India and Videocon Industries have zeroed in on power inverters?a must in every house given the endemic power cuts across most of India?s 5,400 cities and towns.
?Four months back, we had a soft launch of power inverters and we plan to enter the segment in a big way next year. Right now, we are test marketing our product and the response has been very encouraging,? said a top Videocon official. Manufacturing would be done at the company?s units at Aurangabad in Maharashtra, and, of course, the prices will be competitive.
LG has earmarked its Greater Noida plant for making inverters, a source close to the development told FE.
The organised power inverter market is estimated at Rs 1,500 crore and the chronic power shortage is only going to make it more lucrative and fast growing. So it makes good business sense for companies like LG and Videocon to foray into the segment despite the presence of established players Su-Kam, Microtech and Luminous, to name a few. As the official with Videocon Industries puts it, ?We would give tough competition to the existing players.?
Cutting back to the present, the latest low-cost offering for small towns and villages is a water purifier from the Tata group, which has already given the middle class a reason to cheer with its Nano. With a price tag of Rs 749 to Rs 999, Tata Swach?s target of selling a million units of the purifier seems quite achievable.
“We will grow our retail presence in water purifiers (specially, UV water purifiers), as this business has a low penetration and there is an opportunity to grow,? says Mahesh Krishnan, Philips, president & head (consumer lifestyle).
Water purification market, estimated to be at Rs 900 crore and growing by 40%, is divided into three categories: RO, which starts from Rs 10,000 and goes up to Rs 25,000; mid segment—between Rs 5,000 and Rs 10,000; and the storage water purification segment below Rs 5,000.
Following the trend, Eureka Forbes, which controls over 50% of the market, is also mulling a cheaper product, said sources. Not to be left behind, Hindustan Unilever is ramping up the marketing of its water purifier brand, Pureit, which it launched last year.
?Currently, we have 400 authorised service providers for our consumer durables, including air conditioners and refrigerators, and we need to train them for our water purifiers as well,? said Kamal Nandi, vice-president, sales & marketing, Godrej Appliances. The company already has an ultraviolet water purifier for the urban market and is all set to roll out a product in rural areas, and has plans to foray into entry level water filters in the next year or so.
Philips is a player in the segment for the past two years. With the water purifier market growing at 40% nationally, and a growth of 60% in small towns, their confidence is obviously not misplaced.
