When number of brands in the retail market have taken on to franchising, depending on the business benefits they could churn out, how can Kitchen appliance sector lag behind? Let’s know more.
India is one of the most vibrant kitchen appliance markets today and brands are investing heavily on the franchise model for better and quicker expansion in the local markets. As per globenewswire, Kitchen Appliances market recorded strong growth, with a CAGR of over 13% during review period of 2011-16. The market is projected to reach over USD 7 billion by 2022. We found out how this market is growing tremendously with franchise model and the challenges ahead.
During the past few years, category like Hobs, Blenders, Microwaves, Cooker Hoods, Food Processors, Toaster, Cookers, Built in Ovens, Electric Kettles, Dishwashers and Coffee Machines recorded double digit value growth on the back of additional factors like more customisation in kitchen appliances coupled with new launches at wide price points targeting different income groups, growing energy and performance efficiency of kitchen appliances and other features like Child Lock, Digital Display, elegant look, easy to clean and automation of such kitchen appliances. A leading name in the industry,
Pralhad Bhutada, CEO of Elica says: ‘Franchising is an excellent route to showcase the brand in right way as it gives the consumer one stop solution. However, in case product range does not get well promoted then the franchisee does not find it feasible to invest in single brand showroom. At Elica we have been successful in executing this model of franchising since we have a wide range of low to high premium products with good margins and we also offer excellent promotion for the same.’
As far as competitive landscape is concerned, kitchen appliances market is a fragmented market. Apart from the few leading names, there are a lot of local and small players too that are striving to grow faster with franchise model. E-commerce players are also offering a huge range of kitchen appliances which is also a reason for better growth and demand. Major names include Sunflame, Pigeon, TKK Prestige, Kaff, Morphy Richards, Bajaj, Maharaja Appliances, IFB Industries and many more. On being asked about the acceptance of franchise model in the kitchen appliance sector, Kapil Kohli, Retail Head, USHA International says: ‘In the franchise model set up, companies can showcase their entire range of kitchen appliances and organise detailed in- store demo of the products which help consumers make informed choices of their purchase. Franchise model also allows better penetration, access newer markets and distribution networks. It also helps upsell complimentary products like if a consumer has come to buy an OTG, they may end up purchasing a blender/ mixer grinder as well.” USHA International’s smart Kitchen Appliances come in a wide range. Usha International Ltd was formed in 1934 and started doing business under the brand name, USHA. Over the decades, this brand name has become a household name in India while the Company has diversified into the business of new age home appliances, sewing machines, fans, power products, water cooler, water dispensers, modern farm equipments and auto components.
Speaking on the challenges, Bhutada delightfully says: ‘Well as such there are no challenges that we are facing as the market is wide open and very accommodating. The first sign of going modern is by upgrading your lifestyle and chimneys are one of those basic necessities of a modern living. The chimney industry in India is approximately 700-800 crore market. Hence, India is a luring market when it comes to chimneys.’ Retail chains such as Big Bazar, Easyday, Croma etc also play a major part in boosting the kitchen appliances sector. Such chains are quickly spreading their network across cities and towns for more growth and reach. Elica PB India boasts of introducing Split Hood, Touch Hood and latest technology Deep Silent Hood for the first time in India. At present it sells through 2000 retail outlets and approximately 60 distributors and plans to increase this number by 20-30 percent next year. Elica pumps around 12 percent of its sales revenue in network expansion and advertisement.
So, it can be easily said that with rising per capita disposable income of consumers the kitchen appliance market is set to grow even faster. The price conscious Indian buyer is now seeking for better and infact the best options in the market. The brands are also doing their bit to get best products on the counters for quick sale. The kitchen appliance brands have focused themselves in offering high-quality products at lowest possible prices.