The white goods segment covers goods like refrigerators, washing machines and air conditioners. Leading players LG, Samsung, Whirlpool have concerned nearly 70 per cent of the market now. This is a sea change from 5-6 years ago when BPL and Videocon had a fair share of the cake.
In India refrigerator production commenced in early 60s, mostly the conventional single door. (Direct cool) models with glass, wood insulation and external condenser coils at the back. The frost free models came into existence in 1994-95. Videocon was the first company to introduce frost free models in India. The competition rose from then onwards. Right now, the consumers have over 15 brands with more than 100 models to choose from. The direct cool segment accounts fro 85 per cent of the marketer while the FF models cover the rest. The price difference between the two varies between Rs 6000 to 9000. The 165 Liter model has traditionally been a hit with Indian consumers (nearly 70% market share). Now customers are slowly shifting to 185-225 Liter category. However, it continues to dominate the FF segment with over 50 per cent share. Region wise the North contributes the maximum followed by South, West and East respectively.
According to the latest ORG data in both the DC segment and the FF segment, Whirlpool is the market leader with 28 per cent market share followed by Godrej, Electrolux, Kelvinator (EKL), LG, Samsung Videocon and Others. Godrej has increased its market share by over 5 per cent after it got the International Design Center to design its products and launched by film actress Preity Zinta (ad for its penta cool range with five side cooling features). Due to intense competition, margins have come under pressure in the refrigerator segment in recent times. Korean giants, LG and Samsung have increased their ad spend substantially coming out with new models frequently and even claiming superiority over their rivals in terms of excellent quality and service. The world’s largest producer of white goods Eectrolux meanwhile is trying to find its feet in the market place after joining hands with the infamous Maharaja international. Its five brand portfolio has been pruned to only two: Electrolux Kelvinator (for the premium segment) and Allwyn (for the low end marketer) in an attempt to focus its limited resources on brands with high visibility. EKL is now trying to look into the frost free segment more closely (its entire refrigerator business till 2002 was built around DC segment only) after conducting a series of customers surveys. The refrigerator market is likely to witness intense competition in the days ahead. India, as most players realize has great potential to increase the cash flows of almost all the players with only 30 per cent penetration at the urban and 5 percent at the rural level (compared to China’s 35% overall penetration level as against India’s overall penetration level of 11 percent). The refrigerators are going to be an essential home appliance with rising urban as well as rural incomes.
Videocon was the first player to enter the washing machine industry followed by BPL. Initially, a large number of local manufacturers introduced washers which did not do well because of poor quality finish. Videocon introduced the twin tub washing machine in the 3 Kg category. The twin tub category fared well and later on the share of washers became insignificant. Now the consumer has a choice of more than 10 brands with over 80 models to choose from. The product range, too improved after the entry of MNCs like LG, Samsung, Whirlpool, Electrolux etc.
Source: Strategic Management