‘Share of smart bulbs is less than 1% of LED bulbs’
Syska Group has come a long way from its core business of LED lights. The company now sells smartwatches, home appliances, personal grooming appliances, fans and mobile phone accessories like earphones and chargers. Gurumukh Uttamchandani speaks to BrandWagon about the company’s bet on smart home products, its offline and online retail strategy, and diversification plans.
What kind of impact has the pandemic had on Syska’s business?
If not for the pandemic, we would have been on a 20-25% growth trajectory, which was the growth rate until 2019. For FY22, we foresee a 10-15% increase over last year. Our target of Rs 4,000 crore revenue by 2022-2023 is not too far away, provided we have no major disruptions.
Having said that, we were severely impacted in the first quarter of FY21. Right after that, we saw an upsurge in demand that lasted until the festive season. As a result of pent-up demand, we ended FY21 with revenue nearly matching FY20 levels.
We launched a number of products during the pandemic; and have seen a lot of traction in new categories like fans and wearables, both of which we launched last year. We felt that the smartwatch category was an apt category to foray into as people were beginning to get more health and fitness conscious.
In categories like appliances and wearables, where legacy brands have a strong presence, what’s Syska’s strategy to stand out?
We make it a point to enter categories where we can add value through innovation and new technology. The other aspect we are mindful of is price. We ensure we are competitively priced. For instance, in the fan category, our intention is not to compete in all segments. We want to focus our efforts in building a portfolio of energy-efficient fans. Our aim is to create a niche for ourselves in these segments.
From being synonymous with LED lights to dipping your toes into grooming products, among others — where is Syska headed?
We want to be one of the biggest fast-moving electrical goods companies in the country with a focus on innovation. Technology will always be at the core of everything we do, similar to how we pioneered LED lighting in India. We entered the wearables category because it is part of building a smart ecosystem for a home. We started off with smart bulbs and smart plugs, now wearables can communicate with our other smart home products. We have seen tremendous growth in the smart home market despite the pandemic. And we envision similar high growth for our company in this segment.
How much does e-commerce contribute to your revenue?
E-commerce contributes 10-15% of our overall business. All the new categories we have ventured into have a high e-commerce play. People have started gravitating towards this channel since the pandemic. Therefore, whenever we are launching something new or innovative, we create buzz around the product through an exclusive e-commerce launch. That said, we have a strong offline retail distribution network, which we want to improve and expand.
Will you be expanding your network of offline experience centres, too?
The Syska Lounge was initially set up to create awareness about our lighting products. Over the past year, we have included all Syska products at these lounges. There are 40 such lounges now, and we will add about five more in the short term. About 70% of these are in tier I cities.
How big is the smart home business? You had hoped to earn Rs 200 crore in revenue from this segment in 2020…
In the smart home space, bulbs are the most popular products. Until 2020, most of the demand for smart bulbs was coming from tier I cities. Ever since the pandemic, the increase in adoption of e-commerce has widened the market of smart bulbs to tier II and III cities. We will achieve this target of Rs 200 crore in 2021.
The adoption of smart bulbs is less than 1% of the overall LED bulbs market, so there is a lot of headroom to grow by creating awareness and encouraging customers to make their first smart home product purchase. Once we achieve that, it is all about cross-selling, and ensuring that we sell the entire experience.