For the first time since its inception, Hyderabad-based Vijay Home Appliances Limited is going in for a major brand refurbishment exercise. The company, which manufactures and sells small appliances under the ‘Vijay’ brand, has charted a Rs 110-crore growth strategy plan for the current financial year.
“Despite being a 50-year-old brand, Vijay hasn’t made a mark in the market as it has not been nourished and visualised properly. We are planning to create a brand recall to achieve the targeted penetration at the end-customer level,” Krishna Sagar, chief strategy officer of Vijay Home Appliances, told Business Standard.
The company, which shifted its corporate head office from Chennai to Hyderabad last year, is primarily into the business, which in industry parlance is called the small home appliances (sub-Rs 10,000) sector.
The products that fall into this category include storage and immersion heaters, room warmers and coolers, fans and exhaust fans, mixer-grinders and juicers, iron boxes, rice cookers and induction cooking-tops. The market for small home and kitchen appliances alone is estimated at Rs 25,000 crore and growing at a CAGR of 23 per cent.
After giving a refurbishment to the Vijay brand with a new font type to its logo and a tag line that reads ‘Simple ... Everything’ a month ago, Sagar said, the company was now in the process of re-engineering the product range as well as its distribution channel.
“We have already awarded the creative mandate of the Vijay brand to JWT Mindset. While Rs 30 crore will go towards advertising spend this year targeted at the middle and bottom of the pyramid, the remaining will go for re-engineering and product procurement. Our idea is to position Vijay as a value-for-money brand .. and that's where we will continue to stand,” he said.
Currently present in Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Odisha, Maharashtra and Chattisgarh, Vijay is planning to go pan-India in the next three years. The company, operating at a profit margin of seven per cent, reported revenues of Rs 150 crore last year and is aiming at Rs 500 crore this financial year on the back of its rebranding and end-user focus.
According to Sagar, demand for office appliances like shedding, coffee-making and cash-counting machines, LED and LCD projectors, and Wi-FI speakers, the market for which is currently pegged at Rs 1,300 crore in India, is increasing by the day. “We are looking at tapping this by initially launching three products – tablet PCs, tea kettles and Bluetooth-enabled MP3 speakers – by the end of this month,” he said.
The company is also planning to increase the fan manufacturing capacity at its Jeedimetla plant in Hyderabad from the current 30,000 units a month to 500,000 a month within two years, for which modalities and financial arrangements are being worked out, he said.
On the company’s other brand, Siracco, Sagar said the company was selling close to Rs 25 crore worth of exhaust fans a year in Mumbai and was looking at introducing premium products under this brand. “It is still in the strategy stage. The premium product range will be ready for the next financial year,” he added.