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V-Guard's focus on e-commerce drives sales amid COVID-19 disruption

"On the demand side, there is some degree of recovery. Everybody is having challenges there are gaps also. The demand side is a bit better now, though the supply side is a challenge. E-commerce is picking up and doing well," says Sudarshan Kasturi, CFO, V-Guard

Anup Jayaram | September 5, 2020 | Updated 21:45 IST
V-Guard's focus on e-commerce drives sales amid COVID-19 disruption
In the first quarter of this fiscal, V-Guard saw a 42 per cent fall in revenues to Rs 408 crore as compared to the previous year

Kochi-based consumer electricals and electronics company, V-Guard, was impacted by the initial lockdown like every other company. But the fact that it has been working on an e-commerce strategy for well over 24 months helped. At a time when the first quarter of FY21 was reduced to a six-week quarter, it was e-commerce that drove sales. "In recent times, we have upped our game and continue to invest heavily to improve our capabilities in e-commerce," says V Ramachandran, COO, V-Guard. The e-comm accounts for 6-8 per cent of the company's revenues now. Though it is not so large to move the needle, the share is going up.

"On the demand side, there is some degree of recovery. Everybody is having challenges there are gaps also. The demand side is a bit better now, though the supply side is a challenge. E-commerce is picking up and doing well," says Sudarshan Kasturi, CFO, V-Guard.

Secondly, V-Guard has moved from long-term to short-term planning. That allows for changing plans at short notice to launch products. In recent times, the group has launched small kitchen appliances and water purifiers. These electrical appliances along with consumer durables are moving at a fast pace since people are at home. That strategy has come in handy for the company at a time when high-end discretionary spending is slow.

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The third plank of V-Guard's success its focus on getting a larger slice of the North Indian market. Today, the North and South India together account for 40 per cent of its sales. That is still lower than the 60-65 per cent that the two regions account for in case of most durables. V-Guard hopes to hit that limit in the next 3-4 years. "North and East are markets where we have been able to achieve particular success. Our margins, profitability, pricing and market position is getting slowly closer to what we have in the south," says Ramachandran. In states like Uttar Pradesh, it is doing extremely well, but metro markets like Delhi and NCR are more competitive. The company is also focussing on weather-related products such as water heaters.

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In the first quarter of this fiscal, V-Guard saw a 42 per cent fall in revenues to Rs 408 crore as compared to the previous year. The consolidated profit after tax for the period was down 93 per cent compared to the same period last year. One big challenge was to ensure that factories functioned normally in the post-lockdown time. Initially, that was impacted by localised shutdowns. The company along with vendors, provided personal protective equipment (PPE), sanitisers and masks for workers. That helped to ensure production was almost close to pre-COVID levels.

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