The company is also increasing indigenisation, which is a key “thrust area” for the company, where it expects local souring to contribute up to 80% across products in the next two years
New Delhi: Home appliances maker Haier is “buoyant” about the fast-growing Indian market where it aims to become the second largest player in the next five years, with increased investments in manufacturing and product portfolio expansion, the company’s India President N Satish said on Wednesday.
Haier Appliances India, a part of the Chinese multinational Haier Group, is investing around Rs 800 crore on capacity expansion here this year, and has also lined up future expansion plans, he said.
The company is also increasing indigenisation, which is a key “thrust area” for the company, where it expects local souring to contribute up to 80% across products in the next two years.
Haier India is also increasing exports from its Indian operations to other countries and is scouting for new markets in the Middle East and African countries, besides expanding its retail business in the domestic markets.
Haier India, which has been growing with a 25% CAGR (Compound Annual Growth Rate) for the last six years, expects to close this fiscal with a topline of Rs 8,500 crore and expects to touch the Rs 10,000 crore mark in FY25.
“Last fiscal, we closed at around Rs 7,000 crores and our expectation this year is to do Rs 8,500 crore and next fiscal year is Rs 10,000 crore,” Satish told PTI.
India is the third largest market for Haier Group globally, after China and the US. The company operates in the country with two manufacturing units in Pune, Maharashtra and at Greater Noida in Uttar Pradesh.
“We are very buoyant about the Indian market. The overall economics look very positive for the industry and the business here. We see a lot of positivity among the consumers,” said Satish
With the growth of the Indian economy, the company expects demand for consumer durables, which currently has a very low penetration in comparison to other countries, to also increase.
According to Satish, this is one of the “triggers” for demand growth here and young demography with new-age consumers, who are ready to pay for convenience and comfort, would create a market for high-end, value-for-money products.
“Our target is to be the number two brand in India in the next five years,” he said.
Haier, which has completed 20 years in India, is also expanding its product portfolio and now is present in 11 consumer segments which include traditional areas such as TVs, washing machines, refrigerators, LED panels and water heaters.
“Today we are one of the fastest growing in the last seven years with a CAGR growth of 25%, which is unprecedented in this industry. No brand probably has ever done this kind of growth and that too across all the categories,” he said.
When asked about the investments, Satish said Haier has so far invested Rs 3,500 crore in the Indian market, which has created 35,000 jobs.
“Currently, almost now phase two is at Rs 800 crore which we have already committed and are investing,” he said.
Over future investment by Haier in India, Satish said: “It’s still in the initial stages probably at this point. I will not be able to comment on that number. But definitely, we have a huge expansion plan which is lined up.”
Currently, Haier India has a consolidated manufacturing capacity to roll out nine million units annually combined from both plants.
It is the third largest appliance maker in India and competes with companies such as LG, Samsung, Panasonic, Whirlpool of India, and Bosch, besides some homegrown manufacturers such as Godrej Appliances, Bajaj Electricals, and Voltas, among others.
On exports, Satish said currently the outbound shipments contribute around 5% of its sales but now Haier India is increasing exports and working on different standards and certifications for the respective markets where it wants to export.
“Currently in our export business, we are growing about 40% year-on-year. There is a separate dedicated team which works on the export… The team is working on African markets which are now evolving and also the Middle East,” he said, adding, “Now we can cater for these markets after capacity expansion.”
The Indian appliances industry was estimated to be around Rs 1 lakh crore in 2023 and has been projected to grow to about Rs 1.48 lakh crore by 2025, according to an IBEF report.
