Companies and brands spend crores of rupees to get new customers but very little has been done for the existing consumer, says NS Satish, president, Haier Appliances India. At the onset of the festive season, Storyboard18 discussed with Satish about how Haier is using Diwali to shift towards premium positioning and increasing its volume.
Edited excerpts
Haier has partnered with Disney+ Hotstar. Can you elaborate on that?
We have partnered with them for three things. Firstly, it is for connected TV where we have not gone for the impressions but for spot buying. In HD television, we are also present in spot buying. In terms of mobile, we have gone for impressions.
India is about cricket; India’s festive season has a good traction. After a long time, the World Cup is happening in India. We call this sports entertainment—it could really bring the brand to life and probably much closer to the consumer in the living room.
When we had made investment in IPL (Indian Premier League), we could see viewership around 1.5-2 crore. This made a lot of difference in terms of brand positioning and brand numbers. So, it’s Diwali along with the World Cup, and people are glued to their televisions. Luckily for us, the gamble played well. The highest viewership went up to 4.5 crore the other day. So, all in all, that made a difference to brand positioning and our numbers. That’s the trigger we used.
Today, in the World Cup we have a share of 90-95 percent in the durables industry. Most of the other brands don’t enter the event because of entry barrier issue. So we are getting a clutter-free durables space.
How is Haier leveraging consumer insights during the festive season?
Entry-point consumers are still not coming back, while the mid- and high-level consumers are willing to spend more for their quality of life. Customers are willing to buy now and pay later, in terms of EMI schemes. Based on these two things, we understood a differentiated product would make a lot of difference in the marketplace.
I don’t have to explain the product to the mid- and high-end customers since they have already been using the product for a few years; they clearly know what they want to buy.
Take the case of our refrigerators. We don’t need to sell it to these customers, we need to sell the extra features that come with these refrigerators. We have designed our product strategy considering these factors. This has really helped us in terms of this year shifting our brand from a mid-range brand to a mid- and high-end brand.
What is Haier doing in terms of innovation?
We did a consumer study on side-by-side refrigerators. The people using it said the freezer section is too big and they don’t use it. When we went to people using the regular refrigerator, they too pointed to the freezer section and said they are not buying the side by side refrigerator because the freezer section is too big. Using this insight, we designed a product that is a three-door refrigerator designed in India and made in India.
Secondly, in terms of air conditioners, we focused on hygiene. Consumers get their ACs cleaned only when it gets choked or every 6-8 months. Haier incorporated a self-cleaning technology you can clean every 15 days, monthly, or whatever is your choice.
We noticed that when it comes to washing machines, consumers prefer to give delicate clothes and expensive shirts for dry cleaning. They told us that the cloth ages the more it is put in the washing machine. We introduced a ‘refresh’ mode, it’s a 15-minute wash cycle without using water or detergent and yet it removes the odour.
From a media perspective, I would like to highlight that Haier was a traditional television- and print-led brand. After the pandemic, we realised that our targeted people are different. We have a unique combination of three product categories—the LED television today is decided by the son/daughter, and the lady of the house decides the refrigerator and washing machine. The man of the house probably selects the air conditioner. So our target customer is versatile across products. There, we had to shift from traditional advertising to digital, influencer, content marketing, OTT.
In the recent past, Haier didn’t get a known influencer on board for its campaigns. Was that a strategic move?
You go to a known influencer and they probably are doing too many campaigns. There is no real authenticity in those. We have taken the route of developing collaboration with alternate influencers for the long term. When we were doing traditional campaigns, we never took a traditional celebrity. We partnered with people like Deepa Karmakar and Hima Das. That time they were not in the limelight, and no brands chose them. Even now, we are trying to identify how we partner with upcoming influencers who are true to themselves.
What’s the market share in the consumer durables segment? Where is the business coming from the most?
The market size for large appliances is Rs 80,000-90,000 crores, of which 10-15 percent is online and the rest offline. Out of this offline, about 25 percent of business comes from large-format stores; the rest comes from general trade. In terms of channels, we see the southern market takes about 27 percent, the western part about 25-26 percent, the northern part about 20-30 percent. Some 65-70 percent of our business is dependent on 50-70 cities across India.
How does investing in marketing look like for the brand? What is the online-offline ratio in terms of sales?
Haier has invested about Rs 100 crore in terms of pure marketing; 10 percent sales comes from online and the remaining 90 percent from offline.
Given the festive season, what are the growth projections for the brand?
Compared to last year’s Navrati, Haier’s value growth is about 49 percent this year. In terms of volume growth, it’s about 38-42 percent. Having said that, if I take October-November, our estimation is that the growth is 42-45 percent.
How is Haier planning to evolve?
We are looking at enhancing customer value. We are looking for new ways of engaging with the customer. People are buying IoT-based products, but we saw that only 10 percent of customers who bought it are actually using it. We have a separate division in our department where we engage with the customer and make them aware about how to use it. For example, connecting air conditioners with your mobile is available on your handphone, you don’t have to worry whether you switched it off or not.