Why is Hindware, a manufacturer of sanitary ware products and bathroom fittings, setting up kitchen galleries?
In October alone the brand unveiled 15 new exclusive kitchen galleries in the cities of Lucknow, Ludhiana, Ghaziabad, Alwar, Kolkata, Mumbai, Bhopal, Gwalior, Nashik, and Mangalore. With that, its gallery count went up to 170.
After a cautious start in 2019 when the company forayed into Internet of Things (IoT)-enabled appliances segment with its iPro range of products (water purifier, chimney and water heater), Hindware Appliances made its intentions clear in 2020 when it upgraded the range with the addition of the Amazon Alexa feature to give consumers a complete hands-free experience using voice commands. Now, parent firm Hindware Home Innovation is working overtime to expand the portfolio with the addition of intelligent food sanitisers, hobs, cooktops, built-in ovens, microwaves, dishwashers… you name it. The brand also has a furniture and home décor retail arm, Evok.
The opportunity is immense, no doubt. The household appliances market in India stands at roughly $68.75 billion, according to a 2022 report by Statista. The research firm added that the sector is set to grow annually at 5.68% (CAGR for 2022-27). Of that, revenue in the smart appliances segment is projected to reach $2.3 billion in 2022, which is expected to grow at an annual rate (CAGR for 2022-26) of 13.13%.
But the shift is not going to be easy. First, the brand is moving from a low-involvement category to a high-involvement one. Second, ticket sizes in the new category are much higher. Most importantly, can a brand that is closely associated with the humdrum category of sanitary ware create space for itself in an aspirational product category like smart appliances?
First, here are a few things going in its favour. After being present in sanitary ware for more than 60 years, it enjoys substantial brand recall and patronage and is among the Top 3 players in the organised segment, which is about 80% of the market. Its long presence also gives it a strong distribution muscle. Its network comprises over 170 exclusive kitchen galleries across over 100 cities, and over 13,000 consumer appliance outlets all over the country.
Now look at what it is up against. Naresh Gupta, CSO and managing partner of advertising agency Bang in the Middle explains the dilemma: “It is debatable if this is a smart move because the smart appliances segment has a different value system, impression, and feel.” Agrees Samit Sinha, managing partner, Alchemist Brand Consulting: “When people think of Hindware, the association that immediately springs to their minds is sanitary ware.While it may not be a deal-breaker, I believe that the brand name carries more baggage,” he says.
Now look at the competition it faces. Both national and international players — including LG, Samsung, Panasonic and TTK Prestige have sensed a huge opportunity here. The organised players face stiff competition from a range of unorganised players operating across segments, point out Ravleen Sethi and Hardik Shah, associate directors, corporate ratings at CARE Edge.
But the firm is upbeat. It claims that almost 7-8% of its business, with overall FY22 consolidated revenue from operations of `2,294 crore comes from smart appliances already. “We are certain that it will account for one-fifth of our total business in the next 5-6 years,” says Rakesh Kaul, CEO and whole-time director, Hindware Home Innovation.