Crompton Greaves Consumer Electricals Ltd said the fan industry is growing in a double-digit and it is optimistic about the growth in the premium segment, which used to be around 8-10 percent now is becoming a 15 percent. So the average selling price of this industry is going up and we are all confident that this premiumisation, which is happening in this fan category is definitely going to help Crompton to meet the top line budgets,” said Rangarajan Sriram, vice president of Crompton Greaves Consumer Electricals.
“The consumer choices are plenty right now. More and more plays are coming in. All the manufacturers are now focusing on creating all about this premiumisation – so even the consumer when they are going for shopping, they are looking for colour choices. So we see people are moving upwards towards the premium fans as against their old white and brown coloured fans. So we see that trend going up in the last two years. That is why I said this premiumisation is going to help,” he added.
In terms of margins, Sriram said, “We took some price correction in fans especially. We took four price increases in the last four quarters starting from last year April and every time there has been a pressure in margins, we definitely walk on looking at the price increase but it is not that easy to pass on the entire commodity benefit to consumers because you also start jumping up your pricing, laddering and then you start skipping the segment. So while we have to work on the other cost reduction method and improving the mix of this segment by focusing more premium product by selling more product, which gives more margins, so the price increase we have also taken at least three-four times in the last one year.”
Speaking about lighting business, he further mentioned, “We have been doing well in the LED segment. We have recently launched a wonderful innovation of Anti-Bac LED lamps as well. The price erosion is happening in the LED segment, so while on the quantity and the volume market share we are gaining because of the price erosion, you will get to see the revenues not growing.”