The ‘Make in India’ campaign has inspired the country’s manufacturers to reach further in their pursuit of locally made excellence. Many have turned a new corner and, in doing so, achieved significant success for their businesses.
It makes sense. India’s household appliance market alone had an estimated worth of US$54.9 billion in 2023, expected to grow by a further US$2.3 billion by 2027. Revenue for both major and small appliances has increased year-on-year since 2018, and shows no sign of slowing down.
With a chance to be a part of both the ‘Make in India’ initiative and those rising profits, consumer durables company Haier Appliances will complete 20 years in India by expanding its manufacturing capabilities with a US$120 million cash injection.
The demand for air conditioners, refrigerators, washing machines and televisions in particular has seen a dramatic uptick, making Haier India’s US$48 million injection molding and sheet metal facility at its Greater Noida plant particularly crucial for future success.
Master Plan
It’s all a part of Haier India President NS Satish’s expansion plan that was enacted upon his appointment to the role in early 2022. Enhancing Haier’s product range – and Haier India’s manufacturing capability thereof – was one part of that plan. The other was a focus on bringing Haier’s customers further into the fold.
“I’ve seen the journey of this industry from a channel perspective,” Satish tells The CEO Magazine. “From small mom-and-pop stores to large format outlets, then modern retail and now the online system. Whenever a new channel would open, the existing ones would feel threatened, but over time, they’ve all learned to coexist.”
This means that in India, the retail industry has gone from a seller’s market to a buyer’s market, with customer choices playing a bigger role than ever.
“When I was 45, I took a break from my career, gathered ideas and used them to deliver results.”
“I started my career when the industry was phasing between the two,” he says. “India was opening up, and I was able to walk into the change to consumer durables.”
There, he saw that dealers were still able to control what they wanted to sell. It couldn’t last. “The channel partners were wanting to take more control of that, but slowly the customers took charge,” he says.
“It has completely changed now. Take air conditioners, for instance. You’ve got the man of the house deciding which air conditioner is purchased, how it’s going to be. The refrigerator and washing machines are typically chosen by the woman of the house, and the younger generation chooses the television or mobiles because they know so much about technology.”
What that means for manufacturers like Haier is a more focused marketing campaign. “In the past you’d just ensure exposure everywhere. Today, if I have to sell a television, my media mix has to be completely different. Households no longer own a single television.”
Changing Landscapes
The buyer has changed. The consumption of media has changed. The competition has changed. By this logic, early in his career, before he started working with Haier India, Satish decided he himself had to change.
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“When I was 45, I took a break from my career, gathered ideas and used them to deliver results,” he says. “I went for my second MBA at the MIT Sloan School of Management. I was competing with fresh-out-of-school MBAs and trying to catch up with them, which was nostalgic and challenging.”
The experience renewed Satish’s vigor for the business. “I’d never worked in an established brand, I’d always gone for the challenges, whether by design or default,” he says.
A Creative Space
When he landed at Haier Appliances India as Senior Vice President in 2016, the brand’s strength gave Satish a certain kind of freedom. “If you’re looking for a creative space in which to explore what you want to do with your career, this is the place. That’s what we believe in.”
The senior leadership was, he says, looking for someone that could take charge and blend authority with responsibility. “They knew about my background and I came to understand their leadership capability; where they’d be inclined to encourage,” he says.
“I took a break from my career, gathered ideas and used them to deliver results.”
“Nobody will ever give you power. You have to take that power and prove to people that you can use it to deliver results. That’s what I’ve been able to do at Haier India.”
In Satish’s estimation, Haier India had under its belt a strong brand and a robust ecosystem to bring good products to market. There was also a leadership culture that was open in its thinking and willing to provide Satish with an opportunity to chart his own agenda.
“When I joined, this was a 1,400 crore [US$169 million] brand. Today we’re a 6,500 crore [US$783 million] growth brand,” he says.
Customer-Inspired Innovation
That growth has been achieved not only through Satish’s bold leadership, or the hardworking team in his charge, but by Haier’s customers themselves.
Haier Appliance’s powerful and innovative R&D department is able to tap into the brand’s global network to achieve its goals, but Satish says the secret sauce is being able to access the minds of its Indian consumers.
“We strongly believe that the product is the hero, so when we innovate, we take inspiration from our customers,” he says.
“When we innovate, we take inspiration from our customers.”
India’s unique customership has led to some of those innovations. “In a normal refrigerator, you’ve got the freezer on top and the refrigeration section at the bottom. Many Indians are vegetarians, so on hearing very often, ‘Why does the most frequently used part have to be at the bottom?’ That’s when we innovated,” he explains.
Thus, the bottom-mounted refrigerator, with the sections reversed, was born. “Now, we control 85 percent of this market, and we’re known as the bottom-mounted refrigerator brand. We did it first, designed in India and made in our Pune plant. That’s what sets us leaders apart,” he says.
A Strong Legacy
The firm financial foundation Satish has thus far achieved has allowed him to reach even further in the years to come. “By the end of 2024, we should be a US$1 billion company,” he says. “That’s one of my aims. Another is to build a team that can carry on a legacy of good leadership; people who are independent and will flourish in the future.”
At the same time, Satish is committed to further developing Haier’s relationships with its suppliers, channel partners and customers.
“We work with our suppliers hand in hand and ensure they make a decent margin, but we also try to improve efficiency in our own value chain,” he says.
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“Right now we’re working on a new glass door refrigerator,” he explains. “The technology required to manufacture it was not available in India, so our R&D team is working with many of our partners to make it possible. Everybody wins.”
The channel partners are another story, given the role and nature of the dealer is still in a state of flux. “There’s a huge debate in India around this,” Satish says. “What will modern trade do? What will ecommerce bring? Will local chain stores survive? I strongly believe the Indian market is so big that all of them can survive – provided they have clear thinking.”
With the right strategy, Satish believes it’s still possible for a single store to grow into a multi-outlet dealership. “I’ve been in the industry for 26 years and I’ve seen that happen so many times. There’s enough space to make enough margin for all of us to survive,” he says.
All of this is in service of creating the kind of value the customer will not hesitate to pay for. “If you create that value, the whole ecosystem will make the margins,” Satish explains.
Above and Beyond
Haier India, with its range of white goods including smart washing machines, air conditioners, refrigerators, TVs and microwaves, works ceaselessly to create that value. If Haier’s impressive bottom line is anything to go by, this value is very much ingrained.
“If I meet a Haier customer, I’d love to hear them tell me ‘Yes, your products are great and serve my purpose’. Bringing that to life is my motivation and goal,” he says.
“By the end of 2024, we should be a US$1 billion company.”
“We sell many smart appliances, but what we hear quite often is that customers don’t use all the features even though the features can make life much easier.”
Haier’s response has been to provide instructional videos or arrange engineers to conduct in-person tutorials. “They’ve paid for these products, so they should get the most out of them,” he says. “We spend so much money to welcome new customers, but we don’t do enough to turn existing customers into brand ambassadors.”
The relationship between a brand and its customer shouldn’t end once the transaction is over, Satish insists.
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“If a customer is happy, he will become a brand ambassador for you and tell 10 people about his experience. If you’ve created a narrative around this, that’s a job well done,” he says.
“Even if you want to advertise, each of your current customers should bring in another two customers at least. That can only happen if you provide the value as well as the quality, and that’s what we are doing at Haier India.”
The internal driver for this kind of above-and-beyond service is, as ever, a strong and rewarding company culture. Satish says Haier India keeps customer satisfaction at the core of its growth trajectory.
On the Right Path
As one of the fastest growing brands in the country, Haier India is on a road to even greater success. “We have a wide product portfolio, larger than any brand present in India,” Satish says.
“When we started, we were focused on refrigerators only. Today, we’re a one-stop solution for anyone looking to set up a new house. That’s the biggest achievement.”
Sure enough, Haier has been recognized by Euromonitor as the world’s number one brand in major appliances for 14 consecutive years.
“This brand is living proof that making margins and making customers happy can be done in tandem,” he says. “Yes, it’s a long journey, but I’d say we’re on the right path.”
