By SALONI DUTTA
Haier India - just a decade old - has notched up impressive growth numbers and taken the competition head on in a fiercely competitive market. Shanta Roy Sanjeev, Head-Marketing at Haier India, talks about the insight behind the company’s marketing strategy, innovations and why the consumer is at the centre of all that the company does
Q] Haier has just completed 10 years in India. What are the consumer initiatives that you have planned to celebrate the first decade?
The 10th anniversary is just the first milestone. We have already connected and celebrated with our first customers - our dealer network. Today, we have over 6,500 counters through our exclusive Haier Experience Centres, Haier Experience Zones and Shop-n-Shop format stores across India. With every interaction, we are engaging consumers, talking to them about our 10th anniversary and making them a part of it. We have planned special point-of-sales initiatives. The celebrations will continue on-air, on digital and across all platforms. Our TVC goes on air from the third week of March and it will not focus on the 10 years but talk about the consumer’s contribution in Haier strategy and success in India.
Q] What are the fundamental principles of your marketing strategy? What is your media mix and are you looking at upping your marketing spends?
Globally, Haier is known for innovations and this has been extended to India as well. Our key focus is to get our potential consumers in direct contact with our products which are our biggest pride. Compared to other brands, our share of voice is not that high and our resources small, but our strategy is to use our resources innovatively. Our product line-up is a very big advantage and we feel that once a customer experiences and touches our product, he or she will be convinced to buy it. So from a brand perspective, our communication is product-centric. Our offerings are also slightly tailor-made for the Indian consumer and we highlight the innovations in different product categories.
Our media mix is a combination of traditional and digital media. We look at innovative media striking a balance between traditional and digital. Our marketing spends amounted to Rs 80 crore in 2013 (up from Rs 53 crore in 2012) and it should remain in the same range this year.
Q] What are your initiatives in the digital space?
The digital medium is at No. 2 level for us in terms of media planning. In the last year-and-a-half, we have gone pretty aggressive on this medium. We started with our website and then ventured on to the social media space. We do not look at the digital platform as a way to promote our product but use it to interact with consumers, understand their needs, conduct surveys, take feedback and also provide solutions. We had a global slogan contest and in India, we invited people to give us their slogans on Facebook and ran a five-day parallel contest on Twitter which trended three days pan-India. We also initiated our EcoLife brand theme contest and product launches online. In less than 18 months, we have close to three lakh fans on Facebook. We plan to increase our digital spends.
Q] The consumer durable segment sees intense competition to grab the consumer’s attention. How do you look to differentiate yourself from your competition?
We were a late entrant in India, a cut-throat market, which was already flooded with several international and home-grown brands, offering diversified products. The market has been price sensitive with a lot of price parity, leaving very little scope for brands to create differentiation. We believe our products stand out and are brave enough to cut through competition. With the kind of innovations that we have done – for example refrigerator design, 51% energy saving air-conditioners, LED with MOCard function for motion gaming - we have been able to stand out in the whole competitive scenario.
Q] What are the on-ground activities taken up by the company to connect with the consumer?
Haier activations focus not just on customers coming to showrooms but also taking the product to the consumer. Exhibitions play a major role as this not only allows consumers to touch and feel the product but also compare with other brands. We have been part of major exhibitions in Tier II and Tier III cities, which has given us a lot of mileage. Besides this, we have activities lined up at our stores, such as Haier Week and Product Experience Programme (PEP) where we put up newly launched or to-be-launched products. Based on customer feedback, we have even gone back to our R&D and asked them to make the suggested changes. This direct consumer interaction has helped us come up with newer versions of products.
Q] How important is India for Haier in the larger scheme of things?
India is a very important and strategic market. Everybody appreciates and understands the potential of a growing economy, where lifestyles are changing rapidly. Globally, we are seeing our ranking going up in comparison to the other 165 countries where Haier is present.
Q] Which vertical provides the maximum traction?
Refrigerator is our flagship product, and television is also one of the larger product verticals, and these two contribute maximum to the turnover. Home entertainment contributes about 30% and the balance of about 60% comes in from home appliances; another 10-15% is from commercial. Our commercial business is also growing. We are very strong in deep freezers, the commercial refrigeration business and commercial airconditioning.
Q] What is your current turnover and what is the growth that you expect in 2014? Which category/vertical are you betting on to lead the growth?
We follow the January-December calendar and garnered growth of 25% last year, at a time when the market was sluggish. We clocked a turnover of about Rs 1,503 crore in India, and globally it is about $ 29.5 billion. For 2014, our overall growth expectation is 33%, but we expect that our turnover and growth on categories would be very high. We are looking at growth coming from airconditioners, refrigerators and television. In television, the LED panel market is growing and we are looking at bigger numbers coming in from there. However, it is difficult to predict as elections will have an impact on the industry.
Q] What is your market-share in your key verticals? Which market provides the largest traction and which areas do you see as potential growth drivers?
In the flat TV and refrigerator segments, we have a 5% and 3% market-share respectively and hold 7% of the market-share in refrigerators. The West is our biggest market followed by South, North and East. Looking ahead, with changing lifestyles and the aspiration to upgrade lifestyles, we see huge potential throughout India and not just any one region.
Q] What percentage of revenue comes in from Tier I cities versus that from Tier II and Tier III cities? Do you compartmentalize your strategy for rural and urban consumers?
Tier I cities, i.e., the eight metros, contribute about 30%. The contribution of Tier II and III cities would be more than 40% and the balance comes from semi urban and rural areas. Our communication varies for these markets as the product category contributions are slightly different. Since our expertise lies in mid and high end products, we continue to focus on the Tier I and Tier II cities.
Q] What are the challenges for the brand in the market?
Haier, founded in 1984, is a very young brand, fighting much older and established brands. Our endeavour in the first three-four years was to settle down, get our products across, establish our network and increase our share of voice with limited resources. We have had our share of challenges and it has been an interesting journey. However, 2010 proved to be a turning point and since then, there has been no looking back.
Q] What opportunities do you see going forward?
Innovation has always been the DNA of Haier and our strategy revolves around it. It is a consumer-centric approach and that is why we say ‘inspired living’ - it is inspired by the consumers. As long as we are able to stay close to consumers and take care of their needs, we do not need to worry about keeping up the steady growth and ramp it up in the future.
Feedback: saloni.dutta@exchange4media.com
