With Make in India push, Haier is eyeing 40% growth in 2023: Satish NS

“Haier is ready infrastructure-wise, with our manufacturing plants in Pune and Noida being operational, and we are looking at 40 per cent growth in 2023. We are expecting the demand for air-conditioners to increase with the weather playing up,” says Haier India President Satish NS. 

In an interview with Adgully, Satish says that there is a paradigm shift in the company’s marketing strategy, with a shift towards the digital media. He says that there has been an increased focus on producing smart products and home appliances through local manufacturing in India. “We strive to deliver a deep alignment with the government’s ‘Made in India’ initiative by producing innovative and convenient products for Indian consumers,” he says. Excerpts from the interview:

What is the current market scenario for the consumer durables industry and what is Haier’s business outlook for 2023 and beyond?

The post-pandemic consumer durables sector in terms of revenue in India grew from 15-18% to Rs 1 trillion in FY 2022, led by a 10-13% increase in volumes, demand driven by both urban and rural segments, according to a Crisil report. In terms of the product segments, Air conditioners (AC) segment has been the key growth driver for the industry along with the consumers opting for higher-capacity refrigerators and washing machines (mainly fully automatic). Demand for television has also been on a higher side due to technological advancement, high competition and consequent significant reduction in prices.

Haier is ready infrastructure-wise, with our manufacturing plants in Pune and Noida being operational, and we are looking at 40 per cent growth in 2023. We are expecting the demand for air-conditioners to increase with the weather playing up. There is also a paradigm shift in our marketing strategy. Earlier, we were heavy on advertisements on television and print, which was right to build brand awareness and reach the mass. Now, we need to be specific to the target audience – 60 per cent will be digital media and 40 per cent traditional media. Earlier, it was 80 per cent traditional and 20 per cent digital media.

What are the growth trends expected in the consumer durables industry? What are the key consumer insights that the company is seeing?

The consumer durables industry is dynamic, and the consumer behaviour changes according to varied factors. There is a shift in buying behaviour. Not all customers buy online, as more offline stores offer evolved buying experiences. As many as 50 per cent of the consumers do their research online and then purchase it. People are looking for energy-efficient and feature-rich products. The younger generation is well-informed, and they know what they want. Consumers do not mind paying extra to buy better quality and serving products. Consumer finance and credit card trends are growing faster, wherein consumers don’t mind paying EMI with better quality products. Moreover, while traditional home appliances have remained in demand consistently, products like smart air conditioners, dishwashers, and robot vacuum cleaners are gaining traction by customers as new enablers.

Please tell us about the investments in manufacturing capabilities and Haier’s commitment towards ‘Made In India’ and ‘Made for India’?

Haier has been strengthening its focus on producing smart products and home appliances through local manufacturing in India. Our mission is to constantly bring a change in the lives of the people with best-in-class innovation. We strive to deliver a deep alignment with the government’s ‘Made in India’ initiative by producing innovative and convenient products for Indian consumers.

In 2017, we established our first state-of-the-art manufacturing facility in Pune, Maharashtra with an investment of Rs 600 crore. Later, as part of our expansion plans, in August 2018, we planned to invest Rs 3,069 crore to set up a second industrial park in India in Greater Noida, Uttar Pradesh. The industrial park covers an area of 123 acres. Both industrial parks are high eco-friendly units in the world with state-of-the-art R&D centres. Investments are towards special focus on local needs – ‘Make for India’ across offerings in refrigerators, air conditioners, washing machines, LEDs, water heaters, and deep freezers. This is our commitment towards ‘Made in India’ and ‘Made for India’ as we cater to the ever-evolving needs of our customers as part of our core philosophy of inspired living.

How is inflation going to impact the consumer durable industry? How different is the Indian market in comparison to the rest of the world, especially the Asian markets?

Amid the rising inflation, strategic actions are required to strengthen the manufacturing in India. It will be essential to maintain the current trajectory of steady economic growth in the country. We see disruption happening, which is why we are trying to bring forward certain production. There may be some disruption on the supply side, but we will be able to salvage it. It could impact sales in the April-June quarter. While consumers will hold on to discretionary spending due to inflation, certain home appliances will remain in demand with the seasonal change.

What are your expectations from the Union Budget for 2023-24?

The Union Budget 2023 will play an important role in bringing the white goods sector on track, amid geopolitical uncertainties and rising inflation. Strategic actions to strengthen manufacturing in India will be essential to maintain the current trajectory of steady economic growth in the country. The PLI scheme should continue forward, which will push ‘Make in India’ ahead. And as we move towards the summer season, we expect some relaxation in GST for air-conditioners from the upcoming Union Budget 2023.