Brands line up for a spot on the kitchen table
Premium homes, changing lifestyles help organ is et he fragmented kitchen appliances market, encourage brands to step up the game
“We are bringing at least 100 new products into the market every year and none is a me-too product" T T JAGANNATHAN Chairman, TTK Prestige
The 63-year-old brand TTK Prestige is no stranger to Indian kitchens. Having built its reputation largely through its range of pressure cookers, the Chennai-headquartered company has in the past couple of years not just significantly expanded its product portfolio, it has also launched differentiated models for budget and premium categories and is moving beyond the kitchen into other home appliances. Prestige is not the only brand escalating its game, Preethi that was bought by Philips India seven years back is expanding its range and Amway that is known mostly for its personal care and cleaning products, has launched a slew of new, premium products for Indian kitchens. New brands have jumped in too, V- Guard, Kent and a clutch of international labels are all queuing up for a slice of the action.
TT Jagannathan, chairman of TTK Prestige says, “We are bringing at least 100 new products into the market every year and none is a metoo product.” The company is buoyed by the growing brand consciousness among consumers and the fact that 60 per cent of the market today is organised, a far cry from the fragmented and unorganised segment that it used to be.
An organised market is the result of a mix of factors; there is a shift in the way the young are building their homes, going for modern kitchens and branded kitchen ware. At the same time, the desire for healthier lifestyles among the urban young is fuelling demand for specialised products, opening the door for premiumisation in the category.
According to India Kitchen Appliances Market Analysis by New Era Market Monitor Consultancy, the kitchen appliances industry reported a CAGR (compound annual growth rate) of over 13 per cent during 2011-16 on the back of rising disposable income, growing sales infrastructure including e-commerce coupled with innovation in kitchen appliances. The market is forecast to advance with a double digit CAGR of 15.41 per cent during 2017-22 to reach $7 billion.
Preethi, the Chennaibased appliances brand that is focused on the mixer-grinder-juicer market was acquired by Philips in 2011. The company says that at present about 26 per cent of its market is still unorganised. Under Philips, the company has managed to pare its losses and expanded its presence in the Large Format Retail Category (LFR) stores and introduced new products. According to Francis Kanoi, a research firm, Preethi which is in nine states at present, has 20 per cent share of the mixer-grinder market, followed by Bajaj with 9.5 per cent.
TTK Prestige says that it is the market leader in cookware and that is largely because the brand has successfully transitioned from its single-product status to one that stands for all kitchen products. Jagannathan says that his brand enjoys intergenerational loyalty. But he sees a challenge in meeting the demand and aspirations of millennial consumers who are looking at a very different kitchen from their parents.
The company has launched a number of new products under Prestige and under a new label, Judge, for lower priced products. It is also moving into home-cleaning products with an electric mop and into water purifiers. The company recently roped in Vidya Balan as brand ambassador for the flagship Prestige brand. Chandru Kalro, managing director, TTK Prestige says with company expanding tis reach beyond the kitchen, Balan would help find additional ways to meaningfully connect with the modern Indian home-maker, the company’s core audience.
Subramanian Srinivasan, CEO, Preethi Kitchen Appliances says that his company constantly talks to its customers to understand their needs. “Every Preethi grinder goes through nearly 215 quality tests and is backed by a service network that can address breakdowns in one day,” Srinivasan says. While there are many new players entering the market, he believes the old brands with their formal and informal networks are going to be hard to beat. Prestige too believes that its deep distribution networks will see it through the competition.
True, but the point is that the new brands are not really directly engaging with the old players and many are using online channels for distribution. Amway says it will stick to premium cookware, a market that its estimates show to be around ~3.5 billion and growing at 35 per cent per annum. Sundip Shah, CMO, Amway India, says that with many more health conscious consumers in India, there is demand for specialised cookware. “Amway Queen as a key growth driver as it fits well with our direct selling model where the sale happens through the power of demonstration.”
A number of international labels have also stepped into the premium cookware segment but Shah says, “Differentiation in the product, with the help of technology, value added and distribution channels are the major pillars (the brand rests on).” Amway says it expects around ~1 billion revenue from this segment within a year.
Electrical appliances manufacturer V- Guard has also joined the fray. It says it expects revenues from kitchen appliances to be around ~2.5 billion in 2-3 years from ~800 million now. The company wants to be in the premium segment in the mixer grinder, induction, rice cookers and gas tops and plans to use its consumer durable distributor network to take the brand national. “This network includes close to 33,000 retailers, is backed by 250 service centres across four southern states, says Mithun K Chittilapilly, managing director of V- Guard Industries. All the players have identified digital as an important medium for brand development and as a key channel for sales.