SME Times News Bureau | 19 Feb, 2018
In an exclusive interview with SME Times, Saurabh
Baishakhia, Sr. Vice President and Business Head, Appliances,
Orient Electric, said that low quality and counterfeit
consumer electric is a concern for the domestic industry.
of the interview…
Orient Electric is a known name across the country. We would like to
hear about the company's history and it brilliant entrepreneurial
Baishakhia: Orient Electric, has evolved with time embracing new frontiers in
technology and innovation to delight its customers with new and
innovative offerings. Back in the early 1950s, inadequate
infrastructure was a key challenge facing the manufacturing industry
and making high quality products was the need of the hour. It was the
thought of contributing to India’s economic growth that led to the
establishment of the erstwhile Calcutta Electrical Manufacturing
Company which became part of the CK Birla Group in 1954. Through
these six decades, Orient has kept its brand story relevant –
evolving with the times and venturing into new product segments in
sync with market needs.
A household name in the Indian fans industry for more than six
decades, the company over the years has diversified into lighting,
home appliances and switchgears to emerge as a one-stop brand for
electrical lifestyle solutions. The continuous evolution and
rejuvenation process has helped the company stay ahead of the
competition and close to the customers. We take pride in our R&D
capabilities, spirit of continuous innovation and commitment to
manufacture cutting-edge lifestyle electrical products that meet the
needs and expectations of new age consumers.
Recently, the company announced its association with Indo-Global
Social Service Society to donate 100 units of advanced wall-mounted
room heaters across night shelter homes in Delhi NCR. Please let us
know about the noble initiative.
For homeless people, Delhi winters bring a whole lot of distress
especially among families with small children.
While government and NGO’s are doing their bit, we at Orient
Electric felt that as we have a vast product range of room heaters we
can also positively contribute in a way which helps the homeless to
stay warm in the chilly winters. So that’s the reason we approached
Indo-Global Social Service Society (IGSSS) and donated 100 units of
advanced wall-mounted room heaters across night shelter homes in
Delhi NCR in December ‘17. The
activity was carried out through their ongoing initiative ‘Winter
of Hope’ to create better conditions for the homeless during harsh
winter months. More than 4000 homeless people have benefitted through
this initiative. We are sure that the room heaters will bring much
respite from the cold weather and provide comfort for the needy.
Orient Electric offers a range of products. What is the competitive
Baishakhia: It is our ongoing commitment to quality and innovation, and our
vision to partner consumers at every stage of their modern living by
providing lifestyle electrical solutions, which makes us meaningfully
different. To ensure that, we consistently make investments in new
technologies and in areas of quality improvement, service level
improvement and new product development.
Quality is one thing we never compromise on. All product that go
out of our manufacturing units are tested for quality, durability,
and performance. Product quality is extremely important in exports
and I feel proud to share that we have been the largest exporter of
fans from India for last so many years. We have over 60% share in
exports. In home appliances category, all our products are quality
certified by a reputed third-party certification agency.
We have robust retail
presence across India with over 1 lakh retail outlets and a pan-India
service network. Our service efficiencies have improved
drastically over the last few years and we have been able to close
complaints within 24 hours.
Orient has evolved with time to embrace
technological advances to delight its customers with new and
innovative offerings. I am happy to share we are bringing out a great
innovation in coolers this season with India’s first modular air
What are the challenges your industry is facing
Baishakhia: The consumer electrical industry has moved
towards adopting higher energy efficiency norms particularly in the
home appliances space. We therefore hope that the government will
continue to support and encourage this movement with incentives to
both consumers and manufacturers, to help investments in this area.
Recently, the GST rates in many categories have
been revised, and this process of rationalisation is expected to
continue. We feel that the GST rate for small appliances should be
reduced from 28 percent to 18 percent, for example, in products such
as mixer grinders or geysers, which are no longer deemed to be luxury
goods. We recommend that the
government create a multi-layer GST structure for the
electrical appliances industry, like that of cars.
The government should also reconsider revisiting the quantum of
incentives offered under the budgetary support schemes, to OEM’s,
who had set up manufacturing facilities in the hilly states. These
OEM’s were provided with area-based excise incentives in the form
of excise exemption/refund, which have now been discontinued under
the GST regime. The government recently announced a scheme to
grant budgetary support in the form of 58% of the Central GST
(CGST) component paid by such units. This effectively reduces the
incentive - earlier 100% refund – and manufacturers have been
forced to increase prices, resulting in the products becoming costly
for end consumers. This move could also reduce demand and impact
businesses adversely and the government should consider granting 100%
of the CGST component paid, as budgetary support.
What is your views on counterfeit goods from
China? Can they play a havoc on the domestic industry?
Baishakhia: The imported
sub-standard products and components from China is surely a reason of
concern. Currently, the low priced counterfeit goods do not go
through proper validation and are simply a boxed purchase. With no
after sales support and lack of spares, such products have low shelf
life which further adds to consumer woes. The viable solution here is
to set product standards in imports and give impetus to indigenous
manufacturing. With the government support and standardised norms in
place, Indian manufacturers can scale up big time and meet the huge
demand for electrical appliances in India and can soon become
Having said so, I would also like to mention
that these counterfeit goods from China cannot play havoc on the
domestic industry. The Indian consumer’s purchase pattern and
approach to the buying process is evolving fast. The new-age consumer
looks at a product as a wholesome package wherein various factors
like design, aesthetics, functionality, service and
longevity are taken into account. Quality being a key buying
criteria, consumers are choosing branded products over poor quality
imports. While government is doing its bit, Indian manufacturers must
also play a significant role in educating the customers more on this
How GST is likely to impact the industry... both
in positive and negative ways?
Baishakhia: There is an aberration in GST where in products like small
appliances like water heaters and mixer grinders still attract 28%
wherein these are bare basics. We hope that the Government looks to
the same and brings down the GST rates on the products of basic
needs. Government must look at creating proposition so that domestic
manufacturing can prosper. Quick actions have already been taken by
the government and this aberration must be corrected.
GST is helping the organised players gain more market share while
putting reins on the unorganised sector. In this scenario, the key to
success lies in building in the differentiation amongst so many
players. For instance, we are trying to create the pride of ownership
for a product category like a cooler which is still considered as a
commodity. We believe that there is a good replacement cycle
available to us and creating the differentiation in this category
will help us create demand.
Please let our readers know about your future
Baishakhia: The appliances industry is estimated to be about Rs. 13,000 –
14,000 crore of which coolers alone account to almost Rs. 1500-2000
crore. On the other hand, water heaters drive almost 1500 crores of
business and other domestic appliances stand at Rs. 8000-9000 crores.
As far as coolers and water heaters category is considered, we aim to
be amongst the top 3 market players by 2020. We are launching 12 new
models for this season which will expand the company’s cooler range
to 34 SKUs. With our new air coolers range, we aim to fill the
existing gap in the segment which is to have smarter and efficient
In our kitchen appliances segment, we are focusing on food
preparation sector majorly which includes grinders and blenders etc.
In this sector, grinders segment stands at Rs. 300 crores, so that’s
a priority market for us and our aim is to reach a high single digit
growth numbers in the next one year.
have also not closed our doors for inorganic growth or exclusive tie
ups and will continue exploring such opportunities while keeping a
keen eye on new and emerging segments within home appliances.