News Details
Voltas ACs Breeze Through to No.1 Spot
20 August 2014

Voltas established a clear lead in air-conditioners sold through multi-brand outlets in the past fi scal year, dethroning LG, the first time in almost 14 years that a local manufacturer was able to topple South Korean companies in any major segment in the fiercely competitive Rs.50,000-crore consumer electronics market. This follows a year in which Voltas emerged as a front-runner in the category, fi ghting LG for ascendancy. The performance by Voltas came in the face of scepticism that success in FY13 had been a flash in the pan and that no domestic brand could make a dent in the dominance of the multinationals in multi-brand outlets, where 90% of total industry sales take place. The Acs made by the Tata Group unit had a 20% share in multi-brand outlets followed by LG at 18% and Samsung at 10.8% in the April 2013-February 2014 period, according to the latest data from market researcher GfK-Nielsen that tracks sales in the durables industry. Voltas is ahead by value as well at 18.9%, followed by LG at 17.9% and Samsung at 10.6%. This was the first full year in which Voltas sustained its leadership throughout, with LG having fought back to the top in some months in FY13. However, LG is still the market leader when counting sales in multi-brand outlets and its own exclusive stores. As per GfKNielsen, LG India has a 22% share by this measure, with Voltas at 18%, followed by Samsung at 14%. Since multi-brand outlets account for the dominant share of AC sales, it’s a fair measure of competition, said Pradeep Bakshi, president and COO, unitary cooling products business group. LG India seemed to reject the reasoning offered by Voltas. To be sure, as a delayed summer gets under way, LG will be more than ready to unleash the might of its vast marketing machine. Voltas will have a tough task as LG has been pushing back hard with higher margins this season, said a senior executive of a leading electronic retail chain. The turnaround at Voltas is big news at Bombay House, the Tata group headquarters, considering the many Indian brands that lost out after LG and Samsung entered the Indian market in the late 90s. Homegrown brands such as BPL, Videocon, Onida, Godrej and Voltas lost luster starting 2000-01, with the South Koreans kicking off their marketing thrust. IFB was one of the few Indian brands to maintain its grip on the market in the niche frontloading washing segment until about four years ago, when LG took over as leader. LG India has built the country’s largest network of companybranded exclusive stores in the durables industry, with more than 1,800 such franchisees. As per estimates, such stores account for around 20% of LG India’s sales, the highest contribution from this category in the industry. However, AC makers including Hitachi, Daikin, Voltas and Carrier have not focused on setting up exclusive stores since most AC sales take place in multi-brand stores such as local outlets, regional chains and modern retail. The air-conditioner business is now the highest contributor toward profi tability for Voltas and the second-largest revenue contributor, after electro-mechanical projects and services, with sales of Rs.1,835 crore in 2012-13 with a profi t of Rs.173 crore. Total net sales for Voltas in 2012-13 amounted to Rs.5,514 crore. (Source: The Economic Times, April 21, 2014)

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