Mirc Electronics, the maker of popular household electronic goods under the Onida brand, is now aggressively targeting mini-metros to push sales as it looks to get back its market share in the competitive white goods industry.
"We have a very strong presence in South and West and are expanding aggressively in Northern markets," said Vijay Mansukhani, MD, Mirc Electronics (Onida), in an interaction with Moneycontrol. "We are actively focusing on mini-metros, which is really paying off and we have seen good traction in our sales from these towns," he said.
Mini-metros are places like Ahmedabad, Chandigarh, Coimbatore, Hyderabad, Kanpur and Pune, which are almost at par with the metro cities and also have a high-spending customer base.
Onida has presence across 4,500 dealers and is adding 1,000 dealers every year across India, he explained. While the company had kept a low profile for the past few years, it has re-entered the white goods space aggressively.
Mansukhani said that Onida was affected by entry of large foreign players over the last couple of years, and also by the slew of measures by various state governments on duty benefits, which made the industry fragmented in terms of manufacturing and pricing of goods.
"Now that goods and services tax has been implemented, we are on the same level playing field with all these large foreign players," he said.
Focus on air conditioners & IPL
On the products front, air conditioners as a segment has been a growth driver for the company.
According to Mansukhani, the company is planning to double its air conditioner sales to Rs 700 crore, up from last year's sales of Rs 360 crore, and achieve 40 percent of its overall sales just from air conditioners.
He said that the growth predicted in India’s white goods market is 17 percent, whereas the company expects to increase its revenue at a rate of 20-25 percent.
For the quarter ended March 31, 2017, the company had reported revenue of Rs 210.43 crore and profit of Rs 12.23 crore.
As summer rolls in, Onida has released a new campaign for its air conditioners. For this, the company has also decided to bring back the once-familiar ‘Onida’s Devil’ out of his hiatus.
On the advertisement front, Mirc is planning to spend Rs 25-30 crore across all formats like television, print, outdoor and digital. It has also tied up with the Indian Premier League (IPL), 2018 and will be spending Rs 20 crore on IPL advertising alone, said Mansukhani.
“IPL is one of the most followed sport across the nation with millions of viewers increasing every year and this is a golden opportunity for all the brands to promote themselves which reaches their target audience. This will create visibility across the country for our products,” the Mirc MD said.
Onida had been an advertiser with the IPL when it was first launched in 2007.
Speaking about the company's financials, Mansukhani said control measures and improved efficiency have resulted in good margins and profitability. He said this has resulted in an increase in revenues and have attracted marquee investors from the market.
"The investors have infused Rs 143.35 crore into the company, which has led to increase in focus of expanding our market share through increased focus on advertising and strengthening sales and other senior management team from leading white goods and consumer durable companies," Mansukhani said.
India's demographic dividend may also prove to be advantageous for Onida. Not only are more and more rural Indians moving to urban areas, but there has been a marked increase in disposable income too.
"There is lots of potential in televisions, air conditioners and washing machines in this country. Especially the penetration level in air conditioners in India is 3 percent as against the global average of 60 percent, whereas washing machines is at 8.8 percent against a global average of 70 percent. This gives us lots of room for growth in our existing segments," Mansukhani said.