Havells Gained 10% Increase in Market Share

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So, let me tell you a quick story 😁 The other day, I was chatting with a friend who's a total tech geek.

We got onto the topic of smart home gadgets - like, you know, the kind of stuff that makes your lights dim with a voice command or lets you control your ceiling fan from an app.

Pretty cool, right 😯 Anyway, it got me thinking about how companies are jumping on this smart tech trend, and that’s when I remembered the crazy journey Havells went through.

All electrical appliances in my house are from Havells (a household name in India) and were bought almost a decade ago.

But when I looked out to change the ceiling fan in my room today, the designs, model, and how they function were no longer the same 😫 as when I got one a decade ago.

So, what caused these changes, and how did they do it?

Let's dive in…

Executive Summary

Havells India Ltd., founded in 1958, is a renowned name in the electrical equipment industry, offering a wide range of products such as lighting, home appliances, switchgear, and cables.

The company has branches in over 50 countries, with a strong distribution network of over 500,000 retailers and 13,000 dealers.

Despite its strong foothold, Havells saw the increasing market and consumer preferences change towards energy-efficient and smart products.

Havells successfully broadened its offerings, leading to significant growth in market share, improved customer satisfaction, and a substantial increase in revenue.

But what problems did Havells face, and how did it overcome those to become a household name across India?

Problems Faced

Technological Shift

Over the past decade, the global shift towards energy efficiency and smart technology has gained momentum, driven by increasing consumer awareness, government regulations, and technology advancements.

Consumers were becoming more environmentally conscious and demanded products that were not only efficient but also convenient and smart for better control and integration with modern lifestyles.

Considering the evolving trend, Havells' existing product portfolio, though strong and reliable, was beginning to show signs of aging in terms of technological advancements.

While meeting basic consumer needs, the products lacked the smart features that competitors were introducing.

For instance, while traditional ceiling fans, lights, and switches were still well-known, the market was gradually moving towards smart fans with remote controls, app-based lighting systems, and switches that voice assistants like Alexa and Google Home could control.

Rising Competition

Havells also saw increasing competition from established brands and new entrants who quickly adopted and introduced smart and energy-efficient products.

Competitors like Phillips, Schneider Electric, and new tech-savvy startups were aggressively capturing market share with innovative products.

These companies introduced AI-based lighting systems, energy-saving appliances, and home automation solutions that appealed to tech-savvy consumers, particularly in urban areas.

As a result, Havells began losing ground in key segments, with a noticeable decline in its market share by approximately 5% over two years.

Customer Expectations

Havells had built its brand on the foundation of quality, reliability, and customer trust.

However, as consumer preferences evolved, there was a growing expectation for products that offered basic functionality and added value through technology.

Consumers were now looking for products that could fit into their smart homes, managed remotely, and provided insights on energy consumption.

This shift in expectations posed a significant risk to Havells’ brand perception.

The company was at a crossroads: it needed to evolve to meet these new demands or risk becoming outdated and out of touch with modern consumer needs.

Financial Implications

The financial implications of this problem were also significant. The declining market share and inability to compete with innovative products directly impacted revenue growth.

In the fiscal year before introducing the AI products, Havells reported a slower revenue growth rate of 8%, down from 12% in the previous year.

If Havells failed to address these challenges promptly, it risked further erosion of market share, reduced profitability, and long-term damage to its brand equity.

The company needed to innovate quickly, comply with evolving regulations, and meet the ever-evolving customer expectations while maintaining its reputation for quality and reliability.

Solution

Havells made a decisive move to boost its investment in research and development to address the challenges.

Understanding that innovation was the key to staying competitive, the company allocated over ₹500 crore annually towards R&D efforts.

The increased funding allowed the company to focus on several critical areas: smart technology integration, energy efficiency, and product design.

The R&D teams upgraded existing products and conceptualized entirely new lines to meet the modern consumer's demand for smart and energy-efficient solutions.

Smart Products Development

One of the most significant outcomes of this increased R&D investment was the development of a new range of smart products.

Havells recognized the need to provide consumers with products that could seamlessly integrate into their increasingly connected lifestyles.

This led to smart lighting systems, fans, and switches with IoT (Internet of Things) capabilities, allowing users to monitor and control their devices remotely, set schedules, and even receive real-time energy consumption data.

For example, the new range of smart fans came with remote controls and app integration, allowing users to adjust fan speed, set timers, and even change modes without manually operating the fan.

Energy-Efficient Technologies

Alongside smart technology, energy efficiency was a critical focus for Havells. The company recognized that consumers were increasingly concerned about their energy consumption.

To meet this demand, Havells implemented energy-efficient technologies across its product lines.

The company introduced LED lighting solutions that used up to 80% less energy than traditional bulbs with the same brightness level and longer lifespan.

Havells also upgraded its range of home appliances to include energy-saving features. These appliances work at lower power levels without compromising performance.

For instance, the energy-efficient water heaters were equipped with better insulation and advanced heating elements that minimized heat loss, reducing energy consumption by up to 30%.

Collaboration with Technology Partners

Havells collaborated with leading technology partners to ensure the successful development and implementation of smart and energy-efficient technologies.

These partnerships were crucial in integrating advanced IoT features into Havells’ products while maintaining the company’s high standards of quality and reliability.

For example, Havells partnered with global technology firms to develop the software and hardware required for its smart home solutions.

These collaborations allowed Havells to leverage technology leaders in areas like cloud computing, data analytics, and IoT, ensuring that its products were innovative, secure, and user-friendly.

Phased Rollout and Market Introduction

The implementation of these innovations was carried out in a phased manner to ensure smooth adoption by both consumers and the market.

Havells began by introducing its upgraded and smart products in key urban markets where demand for such solutions was highest.

This strategic rollout was escorted by extensive marketing campaigns that highlighted the benefits of the new products, such as energy savings, convenience, and integration with smart home ecosystems.

To support the launch, Havells trained its sales teams and dealers and ensured they were well-equipped to explain the features and benefits of the new products to customers.

Improving Product Design

In addition to technological advancements, Havells paid close attention to the design and user experience of its new products.

The company recognized that modern consumers also valued aesthetics and ease of use. As a result, Havells invested in developing sleek, modern designs that would appeal to contemporary tastes.

The new products featured intuitive interfaces, making them easy to operate even for users who were not tech-savvy.

For instance, the smart switches were designed with simple, touch-sensitive panels that could be easily integrated into any home decor.

Results

Havells' strategic initiatives led to impressive outcomes across multiple areas:

• Sales and revenue growth: The launch of smart and energy-efficient products resulted in a 25% increase in sales within the first year, driving overall revenue growth by 15%. This growth showed an improvement from the previous year’s 8% increase.

• Market share expansion: Havells gained a 10% increase in market share in the smart products segment, particularly in urban areas.

• Customer satisfaction and loyalty: Improved features and energy-saving capabilities boosted customer satisfaction, leading to a 15% increase in repeat purchases.

• Return on Investment (ROI): Havells reported a 30% increase in profit margins due to higher sales of premium products and lower production costs for energy-efficient items.

• Global expansion: The success of the new product line facilitated Havells’ expansion into international markets, resulting in a 20% increase in global sales within two years.

• Environmental impact: The energy-efficient products introduced by Havells contributed to a reduction of over 50,000 tons of carbon emissions, aligning with the company’s CSR goals.

Conclusion

Havells’ approach to addressing the challenges it faced resulted in a transformative period of growth and innovation. The company overcame the competitive pressures and technological shifts in the market and emerged stronger with a revitalized product portfolio that met the evolving needs of modern consumers. The increase in sales, market share, customer satisfaction, and ROI shows the effectiveness of Havells’ strategy.