Voltas, the full stack appliance company is synonymous with all-round comfort. Guided by its ‘Har Ghar Voltas’ vision, the brand’s product portfolio is all about managing extreme heat with confidence, keeping electricity costs predictable, preserving food reliably in demanding climates and ensuring hygienic, efficient laundry care for growing households. It is about solutions that quietly support everyday life without adding complexity.
In a conversation, Mukundan Menon, Managing Director, Voltas speaks about the brand’s retail and geographic expansion, focus on Tier II and III markets, its franchise strategy and more.
Retail and geographic expansion
Menon outlines that currently there are roughly around 30,000 counters which sell Voltas’ products across the country. These are in Tier I, II, III, IV and V cities and towns. “The geographical coverage that we have is probably the best in the country. Every nook and corner of the country is serviced by our counters.”
Voltas runs approximately 300 EBOs (Exclusive Brand Outlets) which operate as franchise outlets. Out of these, almost 290 of them run on the FOFO (Franchisee Owned, Franchisee Operated) model. A few, roughly 3-4 of them, run on the COCO (Company Owned, Company Operated) model. From the remaining of the 30,000 counters, they operate as MBOs (Multi Brand Outlets).
“Our plan is to have at least another 5 or 6 more COCO model stores, taking the count up to 10 COCOs by end of this year. The FOFOs will increase from the current number to close to 500, within this year,” reveals Menon.
Increasing focus on Tier II and III cities
According to Menon, distribution reach is the only way to get to the Tier II and III markets. These are markets wherein a brand needs to be closer to the customer. Hence, Voltas wants to go into the smaller towns, and be in the stores where customers walk in for buying a product.
He lays emphasis on availability of product service as well. “Before we enter a market to sell a product, we ensure that the service backup is ready. You can't have a product sold in a city and the serviceability coming from another town or city. So, we take care of the backend, the service franchisee network, then we get into multi-brand outlets.”
India is a diverse country. The needs of a Tier II and III town may be very different from what a metropolitan city needs. Therefore, Voltas customizes its products for the Tier II and III markets. “Some of them prefer an entry-level product, while some of them also go for premium. A Tier III or IV counter may probably not get fancy with AI, some customers may be interested simply in basic cooling. Hence, we have a product mix in these stores, which is relevant in positioning our product basket in those geographies. It is about meeting the consumers’ demands and needs,” Menon tells.
Retail and franchise strategy
Voltas has an omnichannel strategy. The brand has distributors across the country who inturn have sub-dealers. There is also the modern trade channel, which includes outlets like Reliance, Croma, and Vijay Sales. Additionally, there are roughly around 70 to 80 regional retailers. These are retailers who operate in one or two adjoining states, and each of them have around 40 to 50 stores, or some even more than 100 stores.
The fourth channel includes the COCOs, which are Voltas’ EBOs. The e-commerce channels such as Amazon, Flipkart etc are also becoming hugely popular these days. Menon says, “We are present across all these channels and we grow because every single channel has products which are relevant to that particular channel. Our marketing strategy is also as per our channel mix. All of our channels are witnessing growth.”
Competitive positioning
Being a brand under the Tata umbrella, for Voltas the most significant factor is that of trust.
Whether it is entry-level products, value for money, the value seeker who wants to buy an affordable AC as a first buy, or mid segments which is essentially about features, AI-driven products, or even products at the top of the pyramid which bring beauty and intelligence together – Voltas has products across varied price categories. The brand ensures that the channels also maintain the price differentiation across cities and towns, wherein the products offerings are customized, showcased and positioned according to the audience, the footfall and the purchasing patterns.
Long term vision & growth roadmap
Menon brings out that India has seen a growth of approximately 12 per cent in the last decade in the consumer durables category. The expected growth for the next decade is estimated to be about 15 per cent.
“In terms of consumer durables, the penetration level is still very low. Out of 100 households, only less than 10 households have air conditioners whereas a developed country like China or any of the other European countries have a penetration level of more than 60 per cent. Hence, there is a lot of headroom available for growth,” he concludes.
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