Onida is looking to double its market share in the panel TVs business by the end of FY18-19. The brand currently enjoys a market share of about 4.5 percent in the category.
The brand, which has been facing some tough competition ever since the Indian economy opened its doors to international players after liberalization, turned profitable in the last June-March quarter and has seen a CAGR growth of about 25-30 percent for the last three years.
“In the last three years, we have been growing at a CAGR of 25-30 percent. This year our growth has been to the tune of about 40-45 percent. The market on the other hand has been growing at the rate of 8-10 percent. So, we are already gaining market share and by the end of FY18-19 we should be able to reach our target,” said Sunil Shankar, Head of Business, Onida.
In order to continue their upward growth trajectory, the brand also intends to open more outlets in markets where it currently doesn’t have a strong foothold.
“We had a reach of around 35 branches across India but with the demise of CRT TV, that network shrunk because CRT was our bread and butter and we were doing quite well in that category. With the panel TVs category, we are trying to expand our network,” said Shankar.
The brand currently reaches about 4500 retailers and about 40 percent of their sales come from tier-I cities and metros, while the rest comes from mid-segment consumers, mostly in semi-urban areas.
Onida has identified states like Uttar Pradesh, Andhra Pradesh and Orissa and intend to increase its reach in these markets by adding around 2,500 more networks.
While Onida is steadily gaining some lost ground back, about 50 percent of the market share in the panel TV category is still claimed by the top three players in the category–LG, Samsung and Sony.
Onida is now betting big on Indian kitchens with plans to launch refrigerators as well as small home appliances.
Speaking about its plans to venture into the refrigerator market Shankar said, “The refrigerator market is the least competitive market. If you look at the panel category, it is dominated by the three top players and then there is a host of price players. Now, the government has increased the customs duty from 10 percent to 20 percent on CBU parts. So, we as manufacturers will get the benefit out of this.”
Currently, about 45 percent of the company’s revenues come for its AC business and about 40 percent comes from the panel TVs. The remaining comes from other categories like washing machines and microwaves.
The brand also made a change in its communication last year. Well known for their ‘Devil’ ad campaigns and the tag line ‘Neighbour’s Envy. Owner’s Pride’, the brand decided to move away from the envy bit and focus on the pride part.
The campaign, conceptualized by Zero. Zero Creative Solutions, replaced Onida’s iconic mascot ‘The Devil’ with a bionic man to emphasize the brand’s technologically future-focused orientation. But the campaign was not able to capture the imagination of the consumer like its earlier campaigns and they are now in the process of coming up with a new camping for their AC business.
Onida has been spending about Rs 30-35 crore on marketing for the last four to five years. The brand has, however, earmarked around Rs 75 crore for marketing for FY18-19.
While, so far, the brand has been spending about five percent of its marketing budget on digital, it is realizing the strength of digital and intends to increase its spend on digital as well. Roughly 10 percent of all of Onida’s sales happen online.
“Since we were spending a smaller amount of money on marketing when compared to other brands in the category, our presence on digital was very miniscule. But we do understand the importance of digital. It is a growing media and most of millennials, a group we want to target now, are on digital media. So, going forward, our spends will be equally divided between digital and traditional media,” said Shankar. – Best Media Info