New Delhi: Bajaj Electricals Ltd will consolidate new product launches and its revamped portfolio of brands, including Bajaj, Morphy Richards, Nirlep and Nex, over the next two to three years as part of its long-term plan to overhaul the consumer products business.
To be sure, a few years ago the company had charted a course to transform its business during the current decade. In FY23, it completed the first phase, or what it calls “Horizon 1″, and set out to complate the Horizon 2 phase.
As part of this transformation, the company has invested in renovating its core brands, and entering new categories such as grooming products and lifestyle kitchen appliances.
For instance, in FY23, the company relaunched its flagship brand Bajaj, which sells household appliances, fans and lighting. Besides, it is present in the engineering, procurement and construction segments comprising illumination, power transmission and power distribution.
Bajaj Electricals operates in the home appliances and cookware spaces under the Bajaj, Morphy Richards and Nirlep brands. It recently launched Nex, a brand of premium fans.
“While the renovation will never be over, at least what we’re doing is visible now; the early stages are done. The products will continue to be launched over the next two to three years. Our product portfolio is still undergoing a change. Every year, we are churning out old products and launching new products. In the next two to three years our full portfolio would have undergone a refresh. There are enough new products going into the marketplace today,” Anuj Poddar, managing director and chief executive, Bajaj Electricals Ltd, said.
The company is allocating 2-3% of its annual revenue to roll out new products, supported by higher marketing expenses, said Poddar. It is also repositioning its Nirlep cookware brand on its health and nutrition platform.
“Now we have a multi-brand strategy, what we call ‘house of brands’. In that, each brand has a very strong consumer proposition. This is the new Bajaj Electricals(2.0)—over the next two to three years you will see us cement all the new launches and the communication around the new brands.”
“This process includes more premiumization and modernization, making our products more aspirational and catering to a younger India, so that the company starts occupying a deeper, and more meaningful space across different consumer segments,” he added.
Last fiscal, the company’s consumer products business surpassed ₹3,700 crore in revenue. Overall, in fiscal 2023, its overall revenue stood at ₹5,429 crore with profit of ₹216 crore. Poddar said the company will continue to invest in new launches and associated marketing costs.
“It’s a running cost—when you’re doing R&D, it’s a cost that hits our P&L constantly. Today, at least two-to-three percentage points of our P&L is an ongoing extra loaded cost on these as investments. The payoffs will come over three-to-four years from now.”
The company is also focussing on expanding its distribution network to cater to to modern trade retail stores in large metros. “Traditionally, we have not been very strong in urban markets and large metros….now we are present across urban counters, the more affluent counters, premium metro areas, where we were previously under-indexed. We have gained share in both e-commerce and modern trade,” Poddar said.
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Published: 09 Apr 2024, 08:55 PM IST