 Hello everyone, exchange for media in collaboration with Denning Pascal Group is curating a series of video interviews called Non-Metros Driving the Economic Resurgence, where we focus on how the entire two entire three cities in India are likely to lead the recovery from the pandemic and emerge as the drivers of growth. We are very glad that today we have with us Mr. Debar Ghoshal, Vice President, Marketing Holders, and he's gonna share his insights with us on how he sees the Non-Metros performing in the days ahead and how the Non-Metros will be contributing not just to Volta as well as to the entire country. Mr. Ghoshal, welcome. Hi, everybody and I wish you all a very happy the Sherra NFS2 season. I'm sure all of you are enjoying at home and making the best of the celebration, sir. Thank you, Mr. Ghoshal again. And starting off us just looking back at the pandemic and the ensuing lockdown which happened, how did this impact the durable and white, consumer durable and the white goods sector? And what has been the recovery like for Volta since restrictions have been eased? All right, so let me just give you the Volta's perspective first. Volta's is a six-to-get-old company and we are into cooling products, refrigeration products and now recently more appliances. With this 60 years of experience in consumer durables and cooling refrigeration and projects business, this is the first time we saw a complete lockdown in our presence in the country for almost six decades. Having said that, we were prepared for this April and May lockdown period in such a way that our distribution and our brand fired back immediately when the lockdown was lifted. But yes, as an industry, the lockdown affected the months of April and May significantly because though they were consumers who wanted to buy cooling products or all of our appliances, but the channel was not there. So where do you buy from? How do you buy? So these two months affected the overall business of the industry, I would say. Especially cooling product, which is the peak months of March, April and May contribute almost 50% to the overall industry. So that big chunk was not available for the industry. So that was lost out. But after the lockdown was lifted, I think we saw a lot of traction, which I'll talk about in the subsequent time. So we as a brand, we were geared to bounce back. We did a lot of things during the lockdown to be engaged with the consumer. And our social handles, our digital efforts were significant. Being a service-oriented product category, we reached out to consumers who were after sales service team. And we reached out to people in various enterprises where we were servicing official services, like hospitals, blood banks, and critical establishments. So we had the infrastructure to reach out to people. So while sales was not happening, but the team was pretty much engaged in reaching out to people in terms of after sales service. So that's how we went through the lockdown. We didn't forget the consumer across the country. Although we didn't have sales, but we had a lot of commitments towards the customer in terms of after sales service. But if you could just elaborate a little bit more on this, because you said you didn't forget the consumer. And Voltage is a very established and trusted brand in the country. So how did you, while you didn't forget the consumer, how did you ensure that you remained, you retained your share of voice and remain top of mind? Okay, so taking a cue from what I spoke about in the last question. You see, consumers wanted us, for example, consumers wanted us to know how the service day condition is on their own. So we created a lot of do-it-yourself videos which we posted across our social handles which were widely appreciated. We took the lead, of course, competition followed after that. But that was one of those steps which we took to reach out to consumers who were looking at us from a functional perspective. At that time, I don't think any kind of emotional hook would have helped any brand. Where all brands had to be purposeful. So our purpose was to reach out and help people whenever they wanted to service their products. And that's why the content was very important. Day in and day out with the help of our agencies, we created new content. We engaged with consumers from a vocational perspective, from a topical perspective, wherever there were some special locations, we reached out to them through our content. Content was created not only from a functional perspective, but also we wanted to reach out to consumers reminding them that we are there with them on special occasions. Besides that, we had the advantage of servicing essential services. So our team was there in the field, in the front line, servicing those establishments from a cooling perspective, right, from hospitals to blood banks. Now, we could use that team in emergencies for even for single customers who had medical issues or who had issues to do with emergencies on the health front. And we used our teams to help those consumers who reached out to us when they were in an emergency. So Voltage was engaged through our own follower base. Voltage was engaged through our own customer base because we have a large population of products in the market today. Voltage was engaged from our institutional perspective. And of course, Voltage was engaged as a brand once on digital product. What are the some of the key consumer behavioral changes that you have seen that has taken place since March and how has Voltage adapted to these changes? All right, so the consumers have become little more specific in their requirements, I would say. They are not searching for things which would be purely aspirational. They are looking at things which are specific, which are need based, which can take care of the immediate requirements. So we have seen a trend where consumers are doing a lot of search online. They know what to buy, which brand to buy, what model to buy. And after doing their homework pretty seriously, then they venture out to a store or they go online. Now, the time spent at different stores or different dealer outlets also has reduced because they know what they're going in for. So they're less amount of into shopping. So for brands and marketers and consumer durables, what we have witnessed is the fact that we have to be there at the right place, at the right shelf, with the right model, with the right fill-in ratios so that consumers can take what they have searched for and what they've decided for. We've also seen that being a brand which is top of mind helps during this pandemic because if you're not there, the consumers might even not consider you. So we had the advantage of that, of being a brand which is top of mind. Brand equity in this category is pretty high, one of the highest, especially in air conditioning business. So we had the advantage. And I would say similarly other brands which had good equity in other categories got the benefit of the same. So that's the overall trend which you have seen that the shopping experience has become much more tighter. It's not a wide experience which a consumer can afford to do today. Secondly, there is a huge amount of influence which is taking place within the household and decisions have been taken by consulting each other. Earlier decisions were taken in isolation many a times but since being in home appliances and since home is where the action is today, a lot of consumers are consulting each other within the family to take a decision. There were categories like air conditioners, refrigerators, washing machines, air coolers. But each category traditionally we used to define the consumer as a male or a female adult, non-adult. So typical demographic definitions have blurred today. I think every category is required for every gender, every age group and every segment. So the durable basket has become segment neutral in this pandemic. I don't think anybody who would have taken a decision for air conditioner wouldn't have consulted each other within the family, the husband or the wife. I don't think anybody who would have bought a dishwasher could have gone ahead without consulting each other. So we saw very democratic trend in the distributing process of the consumer in the household. I'd just like you to take on this point that you mentioned about how it's no longer about targeting the male or the woman of the household. So how is your marketing strategy that's evolved because traditionally you're looking at either the male, the woman or a particular age group. So how has that also changed? So we, as you've talked about Boltaz as a brand, Boltaz as a brand has cut across segments throughout. We have never been a segment specific brand, especially when you are calculating to such a large portfolio of products. Over a period of time segmentation has become very strategic in nature and it's not the conventional segmentation which you have to follow in our business. So our marketing pitch, our product hook, whether it is tangible or emotional has always been towards the family, has always been towards the family as an entity. So that's helped us. Being a durable product, many a times you'll see brands talking about their own technology and about their XYZ feature without even getting to know what the consumer wants. We have been driven by consumer insights and those insights have been taken not only from one specific individual in the family but from the entire family. So these insights have come to us. We have taken those insights on board and we have given the consumers a simple and a very meaningful feature which they can relate to always. So not only doing this pandemic, but for the past many years as a brand, we have taken the consumer insights very seriously. If you recall in almost 10 years back when Boltaz changed the whole ball game by talking about an AC which could also heat in the winters and the all weather campaign came up on board, that campaign was for cutting across all segments. It was not only targeted at any particular unit in the house. When we spoke about energy efficiency many years back, almost 15 years back and we spoke about indirectly AC that time also, we were cutting across segments. We were not talking to the specific individuals. So as a brand, we have always been segment neutral and we have always appealed to the entire household whether it is an adult, whether it's a parent, whether it's a child. In fact, many of our commercials and our creative content have always taken into account the wider members of the family, right? From grandparents to children. Now just coming back to what's the main focus of this interview, a lot of reports have indicated that non-metro markets have seen an upsurge in demand when compared to the metro markets. How are you reading the situation? Okay, so let me set the context on from a town classification perspective, how do we define metro and non-metro? So you see in India, anything which is above 10 lakh population, which is a billion plus population is a metro, right? And anything which is above a 5 million population is a major metro. Now, there is a clear cut demarcation in these markets. There are X amount of towns which belong to metros and X amount of towns which belong below the 10 lakh population, top strata. So we define metros as the urban markets for us in a durable basket. And the moment we go below the 10 lakh population, that becomes a semi-urban market for us. So anything between a 1 lakh to a 10 lakh population is a semi-urban market for us, which is a smaller town. If you want to go more deeper into it, there is also a classification between 5 lakh and 10 lakh population, which we should be targeting. And below 5 lakh up to 1 lakh is the smaller towns completely. If you go below a lakh in terms of the census definition, although technically they are not villages, but they are bordering the rural segment of the market. So as an industry, we are focusing 1 lakh upwards towards 5 million. And in terms of data, 45% of the market belongs to metros and above. But surprisingly, 50% of the market belongs to below the metro level, which is below 10 lakh population. So that's a big market to cater to. And out of that 45%, 35% of the market belongs to 1 lakh to 10 lakh population, significant. So almost one third of India consumes consumer durables or a conditioning products in that pop strata. So that's an important segment of the market in terms of population and town classification. So what is the situation? How are you reading the situation on ground and how is the consumer sentiment in the non-metrals? Since the contributions are still coming from non-metrals, I would say the sentiments are in fact at par with any major town. During the unlock period, when it just opened up, we witnessed more traction in the country towns rather instead of the major metro, the major metro for lockdown. And there were still pockets of lockdown and containment zones. So I think when it opened up between June and September, the traction in smaller towns were much more higher than the larger towns. There were two factors to it. A, the fact that the channel, the distribution channel which caters to these consumers in a smaller town were opened up faster. They had lesser restrictions there and we call them the electrical or electronics Kirana store. Those were open in a much more consistent manner than the retail chains, which you've seen in the major towns. So the market got polarized. At one end in the metros, you saw online business picking up more because the major retail stores were based on malls or commercial establishment, which were not opened up. On the smaller towns, those smaller electrical Kirana stores were opened up. And one could order by calling up your nearest neighborhood electrical store in terms of whatever you wanted to buy once you have searched on the net. So we saw these two developments from a decision-making perspective or from a buying perspective that there was a trend towards smaller shops. There was a trend towards smaller stores in the smaller towns. Okay, but I'd also like to ask you, when you mentioned 55% of your sales comes from non-meters, but looking ahead, do you see this number increase? Sorry, I was quoting the industry, not our sales as such. But for Volta, then how much, what percent of your sales then comes in from? It's higher than the industry trend. Almost you can say five to seven percent higher in the many metros in the smaller towns. Because we have a better reach. Our distribution reach is much more higher than categories than other brands. So our sales contribution is higher in tier two, tier three, tier four towns these have been industry. So I could say around 60 to 62% of your sales then... If 45% is industry, we are at 55% here. Okay, now looking ahead, the festive season is upon us. So how are you looking at the festive season, particularly in the non-metro markets? Non-metro markets, the festival period had started already. I don't think, we have seen good traction already in smaller towns. And wherever we have, wherever the industry had a distribution reach, and Dogmat Big Distribute was getting to smaller outlets, there we have seen a huge amount of traction. So the sentiments are very positive. We started with Onam in the month of August. And although it was not so beneficial for the industry because the rains were still hanging around Kerala, but the sentiments were there. People wanted to buy, but there was a bit of a challenge in terms of the weather conditions there. Then it moved on to Ganesh Chaturthi. Unfortunately, Maharashtra had not opened up to that extent that time. So the sentiments were high, but we didn't see much of results. However, recently, in the last seven to 10 days or maybe two weeks, when we have seen a fair amount of interest in the consumers to buy household appliances, and also the second summer which has come in for air conditioning products. So the timing is good. Home appliances are being replaced, or there's a pent up demand for appliances, which you're seeing because of the fact that people didn't buy in the peak summers, people are coming back to us with more requirements. There is also the cooling aspect of it. There is the second summer, which is basically taken over in many parts of the country which is helping us to buy cooling products. You spoke about the emergence of the local Kirana store. Can you just tell me how has retail changed for you because our consumers still vary to go to the large format stores? How has that evolved over the past few months? Large format stores are bouncing back slowly. Earlier they had suffered in between the month of June, July and August, but recently they're bouncing back, especially with the necessary precautions. As I said at the beginning, people were very about visiting large format stores, and they were doing their homework before going there. And many of the people were actually buying from the front of the store. They were not going inside the store. But now that is changing slowly. And there is a fair amount of confidence which is built up to visit large format stores. And there is a fair amount of precautions being taken by the large format stores or not allowing people to come inside in a group. Many stores, many large format stores are taking the right precautions, giving the right advice. Many of them are actually booking appointments for consumers to come in at a particular time so that they don't crowd the store. So these kinds of steps are helping the retail formats to gather momentum. And I'm sure during the festival period, we will be able to see more traction in large format stores. Can you also tell us about your marketing strategies that you've planned for the two weeks ahead, which is for the festive season? Okay, so this festive season, we have been pretty much prepared with our range of consumer offers. We feel that there is a requirement for consumers to avail offers which make the process of getting into a category easier. Now, instead of looking at only freebies or discounts, we are also talking about how to enter a category by investing a lower amount or a lesser amount as they consider a new category. So that's why we have devised various finance schemes. Finance used to contribute almost 30% from our secondary sales perspective. And this season, we expected to go up. Purely because of the fact that consumers want to pay less upfront. So we are offering a range of consumer finance offers through NBFCs where the upfront payment is lesser than what he would have paid if he would have bought cash down. And we are also offering 10% cash back on various credit cards from various banks, almost 10 banks we have partnered with and we are offering a 10% cash back on all our products ranging from air conditioners, to air coolers, to commercial air products, to air purifiers, to the old touch vehicle range of product which are a three to washing machine, dish washers and microwaves. So all this will help consumers to take a decision faster. They will have, they will see, they will be ease of getting into a category. Besides that, we also offering the peace of mind in terms of extended warranties. We have warranties up to five years for air conditioners, four years for commercial refinery products, three years and two years for refrigerators and washing machines. So there's a huge range of extended warranties which will give you peace of mind after you buy a consumer development. So between the voltas and the voltas and the cool range of products, there are these offers which are applicable up till Diwali. Looking ahead, what do you see will be the drivers of growth for voltas? You're talking about the next six months? Yeah, over the next six months, yeah. So for us, we are hopeful that the, after the festival season gets over, when the next summer comes in, it will be a good summer. We hope that the summer sets in faster by February or so. And we should be able to gather the second traction, second wave of better traction February onwards. You see, South India starts firing from January onwards, in fact, so the summer sets in much more faster there. So we have prepared with the new range of models from our air conditioning perspective. We have prepared with the new range of models from our direct cool refrigerator perspective. We have launched a new range of direct cool refrigerator which we see under the voltas because of the brand which we see getting a lot of momentum next year. This year already started, but next year we get better momentum as our supplies get better and better. So we are looking forward to a good summer February onwards and that would set the ball rolling for us for the next year. And what about the festive season? What are your anticipation from this season? We are pretty positive about the season. This season would be at par with the last festive season as far as we are concerned. I don't see any kind of dip in this festive season because of the fact that there has been a huge amount of comeback by the consumers. Whatever time they lost out, they are coming back and getting their home appliances in order. And since home is where the action is, we're all operating from home, we're all operating from our home as a workplace. So people need home appliances. People need convenience. People need comfort and that's where we are positioned as. So we see the home will get refurbished. We see the home will get augmented from a convenience perspective or a comfort perspective. And we are in the business of comfort and convenience. So you see the festive season to be on par with your own year compared to last year? Or do you see even that you anticipate growth also? Yes, we anticipate growth also, but it's difficult to comment as of now. But because it's started, we'll see a better picture in the month of November close to Diwali. But we are definitely sure about the fact that it will be at par with last year. And which markets do you see leading this growth? Any markets where you're looking to increase penetration and reach, particularly in the non-metro markets? Non-metro, as I said, contributes significantly and it will continue to contribute. Our market shares are very high across all pop sectors. We have a 27% market share all India, which is the highest in the category for a condition. The nearest competition is half our market share. We're almost 1,300 business points ahead of competition. So we have a good market share across the country. If I bifurcate the market share from a pop-shared-up perspective, the metros get definitely stronger. In the mini-meters or similar markets, we are strong. We maintain a 25% plus market share in all these markets. So I don't see any reason why we should not be doing very many metros and a market share will only increase. Thank you so much, Mr. Devak Ghoshal, for taking the time out and wishing you again a very happy fester season. Thank you so much.