Mathew Job, CEO, Crompton Greaves Consumer Electricals.
Consumer durables maker Crompton Greaves Consumer Electricals (CGCEL) is aiming to strengthen its brand that was left to lurch for years. To put the brand among young consumers, in competitive consumer goods market that requires constant activities to gain consumer mindshare, it is now investing close to ten times more in branding.
According to Mathew Job, chief executive officer, CGCEL, since the firm came into being in 2015, when Avantha Holdings sold off its stake to two PE firms — Advent International and Temasek Holdings — the focus has shifted significantly. “While awareness among older generations is still strong, it needs to be promoted among younger consumers. So, we have been working to drive the brand for last two years. Last year we allocated close to Rs 65 crore for the purpose, compared to less than Rs 10 crore that used to be invested before the de-merger”, he said.
During the past two years, CGCEL has identified five focus areas to grow its business. Growing market share in the categories like fans and residential pump categories that its leads will be a key driver for the firm’s growth. According to Job, it now enjoys 27 percent market share in the fans market, a category that continues to remain larger than other business for CGCEL.
However, agricultural pumps business requires push as it lags behind market leaders like Texmo, Lubi and KSB. In the lighting division which is second largest behind fans, the firm has managed to double its market share to 10 per cent from five per cent two years ago. “We are now somewhere between number two and three but we want to strengthen our presence and become a strong number two brand”, he said.
While, it has entered the air purifiers market recently to offer complete range of air solutions range of products, it is only considering categories where Crompton can get into the top three league in terms of market share. According to Job, the firm is also exploring ways to expand its overseas business, which is currently confined to a few neighbouring countries like Nepal, Sri Lanka and in Africa. However, its home turf remains more attention. Despite being the market leader in fans and a major player in lighting, it only reaches to half of the retail outlets — an impasse that needs to be broken soon.
Adverse conditions in the business environment during the past year has turned Jobs weary. “Poor growth in the housing sector has led fans market to shrink last year. Also, after demonetisation, implementation of goods and services tax has hampered sales”, he said. To tide over CGCEL had undertaken a cost saving measures which helped it save close to Rs 100 crore during last year.
“This also provided us room to allocate budget for the branding exercise, which will be crucial for our future growth” he said.