Home appliances maker Groupe SEB entered India in December 2011 after buying a 55 per cent stake in Maharaja Whiteline, founded by Harish Kumar in 1976. But things did not go according to plan. There were differences over running the company and management control. In May this year, Groupe SEB bought out Kumar's remaining stake in the company. It also retained Sunil Wadhwa as its CEO. Wadhwa speaks to Shamni Pande about the company's plans. Edited excerpts:
Q. The brand has virtually lost out on all the traction it had due to the churn in the organisation. What was your initial challenge to get things rolling?
A. No, Maharaja Whiteline definitely has a huge recall value and traction among dealers and consumers - people still remember the '1-2-3' jingle well. We are also going to reach out to people through our in-store contacts and promotions and also through digital/social media.
Already, our Facebook has 50,000 fans and our website has more than two lakh visitors. But, yes, the dealers were a little unhappy when the company stopped servicing the brand due to internal changes. The whole point of buying the company was its brand value. Having said that, it is not complicated to effect a turnaround for a player that became quiet for some time.
The first thing is to get competent people on board. This we have through a competent international team from Groupe SEB and includes people like Emmanuel Serot Almeras, Vice-President, Marketing, and Calogero Franchina, Vice President, Operations. Other than this, we have roped in veterans from the industry and together, we have a team of 27 people across functions.
The second task was to re-connect with our distributors. We have doubled our reach in the last seven months are now available at 35,000 outlets. We hope to be available across one lakh outlets by 2016. The third challenge was to put in place an after-sales and supply chain in place. We have already put in place 165 service centres in the last eight months.
We open an outlet only after the service centre is in place. Often, people do not call the consumer helpline and go to the dealer they buy the product from. Hence, we have a separate number for the dealers who can resolve issues within 24 hours.
Q. How much will e-commerce factor in your strategy?
A. The traditional trade still accounts for 80 per cent of the business. But that apart, we are going to have an equally active play on e-commerce and have a relationship with Flipkart and Amazon. We have created separate shop-in-shop features on these platforms that allow consumers to watch our product videos and promos and get special offers online. This will be very integral to our sales and marketing strategy.
Q.Have you not lost time and now local and international players have managed to gain ground?
A. Yes, others have come into the fray. But no one really has more than 10 per cent of the market on a collective basis of the Rs 13,000-crore market for small home appliances. Another way of looking at it is that the market itself is not too well penetrated and we have, therefore, big room for growth. We will first concentrate on our areas of strength in the north, Gujarat and the east. We will begin to tap Maharashtra, Karnataka, Andhra Pradesh and Kerala next year. We will not enter Tamil Nadu for the time being.
Q. What is your growth target?
A. Our turnover is around Rs 230 crore and we are looking at 70 per cent growth by this calendar year. This is against an industry growth of seven per cent. To reach our target of being a Rs 1,000-crore company by 2017, we need to grow at least 100 per cent every year.
Q. How will you deal with Maharaja Whiteline and other international brands in the Groupe SEB portfolio?
A. We are introducing 70 new products. This has been possible due to our internal R&D and design team and the knowledge from Groupe SEB. Initially, all launches will be under the Maharaja Whiteline brand. That is what the market recognizes and connects with the most.
But as we go forward, by 2016, we will introduce some of the top brands from our international portfolio under the Tefal, Rowenta and Moulinex ranges. These would be at a premium range, while Maharaja will be in the economy price bracket.
Q. Is 'Make-in-India' going to help your manufacturing ambition and is there a greater role for your Baddi factory?
A. It is certainly a great statement of intent and we are looking for greater clarity on the announcement the government is likely to make on the taxes (GST), labour and industrial policy. Baddi is the largest small appliances manufacturing factory in India. It helps to meet our current requirement. But, going forward, we will need to look at other options that are perhaps more efficient in terms of transport and freight that can aid our export ambition as well.