BSH Home Appliances, the Germany-headquartered consumer appliances company, is looking at a larger play in the Indian market by expanding its product manufacturing capacities, slowly moving away from China imports.
In an interaction with Moneycontrol, Neeraj Bahl, MD & CEO BSH Home Appliances, said that the company is taking additional efforts to produce locally.
“We will make use of the Make-in-India mission and the Production-Linked Incentive (PLI) scheme. Our Chennai facility was only being used to manufacture front-loading washing machines. We have now spent Rs 300 crore and started our refrigerator plant there,” he added.
The company is also shifting some product manufacturing facilities to India, instead of importing those goods from China.
“We used to import our top-loading fully automated machines from China. Now we have stopped imports and shifted that manufacturing into our Tirupati facility. Going forward, we may shift our manufacturing of dishwashers to India, and later blenders and refrigerators with bottom-mount freezers,” he added.
The Union Cabinet approved the PLI scheme for 10 sectors (including white goods) in November 2020. This scheme is intended to make Indian manufacturers globally competitive and attract investments into core competencies and cutting-edge technology. PLI also intends to make India an integral part of the global supply chain.
Entry into cooktops
Bahl said that the company is entering the cooktop segment in India in August 2021 through the Bosch brand to complete their product suite in the kitchen segment.
Cooktops are free-standing units made of glass/steel that are attached to a piped gas/gas cylinder unit for cooking purposes.
Brands like Sunflame, Prestige, Butterfly, Pigeon/Gilma (Stove Kraft), Elica,
Bajaj, Faber and Kaff are among the top players in the Indian cooktop segment. The price for a three-burner cooktop ranges between Rs 5,000-10,000.
The company will be launching four models of cooktop, including three-burner and four-burner products.
“This is a segment we are completely missing in. Mass-builders (real estate) that cater to residential projects and offer these products in flats were being missed out by us. Even if Bosch enters this segment on a premium, it has a lot of opportunities in India. Even if the products are priced Rs 1,000-2,000 higher than the market rates, customers would be ready to pay,” he said.
BSH Home Appliances is of the view that cooktops are the first product that Indians typically buy for their homes, Bahl said. Considering that there are a lot of unorganised players in this segment, Bosch could bring some differentiation, he said.
The Indian cooktops market is estimated to be Rs 2,560 crore, as on 2020. It is expected to see a CAGR of 15.5 percent and reach Rs 5,260 crore by 2025. It is expected that the Pradhan Mantri Ujjwala Yojana to provide LPG cylinders to 80 million women belonging to below poverty line (BPL) families will aid the growth of cooktops.
BSH Home Appliances sells products under the brands Bosch, Siemens and Gaggenau. Bosch operates in the mass premium segment, Siemens at a level above that, while Gaggenau targets the super-premium segment.
It sells an array of products from hobs, hoods, coffee makers, ovens, refrigerators, dishwashers, mixer grinders and washing machines.
Business expansion
While Bahl did not disclose the exact business numbers, he said that the company saw a 40 percent growth between May and December 2020.
“During the pandemic, there was a catch-up race across the world. India stood first in this race. From May to December 2020, we have grown 40 percent. But we had expected a 25 percent degrowth compared to 2019,” he said.
Bahl said that categories like dishwashers, front-loading washing machines and mixer grinders led the growth.
Company filings with the corporate affairs ministry showed that BSH Household Appliances had net sales of Rs 1,237.6 crore for FY20 against the Rs 1,055.6 crore in the year-ago period.
“We want to grow by 30 percent this year. This will be on the back of real-estate partnerships,
Direct2Customer and new launches,” he added.
BSH Home Appliances has also launched its experience centre in India – in Mumbai. This centre has built-in appliances for customers to check the product before taking a buying decision.
Bahl said that the company will be opening 10 more experience centres in India over the next three years.
