Pawan Kumar, CEO of Elista, Emphasizes the Importance of Understanding Consumer Trends
StartupTalky presents Recap’22. This is a series of interviews in which we conduct in-depth discussions with founders & industry leaders to understand their growth in 2022 and their predictions for the future.
Home appliances, also known as domestic appliances, are electrical machines that help with household functions such as cooking, cleaning, and food preservation. Examples of home appliances include refrigerators, washing machines, ovens, microwave ovens, dishwashers, air conditioners, and vacuum cleaners. These appliances are designed to make household tasks more efficient and convenient, and they have become an essential part of modern life.
The growth of the consumer electronics and home appliances market in India is forecasted to reach an increase of USD 2.12 billion from 2020 to 2025. Factors such as rising disposable incomes, urbanization, and changing consumer preferences are driving the growth in the market. Additionally, the government’s focus on promoting the use of energy-efficient appliances and the increasing adoption of smart home appliances are also expected to boost the growth of the home appliance market in India.
For this Interview, we invited Pawan Kumar, CEO of Elista, and we talked about the growth, challenges, insights, and future opportunities in the Home Appliances/Consumer Durable industry.
StartupTalky: Pawan, what products does your company sell? What was the motivation/vision with which you started?
Pawan: 2022 is the year of opportunity for Elista. We have expanded our product offering in the Smart TV, accessory, washing machines, and computer peripherals categories. We have seen tremendous success in the Smart TV category and registered over 20% growth y-o-y. We started with the motivation to offer technologically advanced products at affordable prices. Our vision is to Make in India for the world. With this objective, we have recently entered the UAE markets and plan to launch in the CIS and MENA markets in the coming year.
StartupTalky: What other products/features have been added in the past year? What is/are the USP/s of your products?
Pawan: We have been focused on providing a superior experience to the users on a budget. Earlier, we disrupted the Dishwasher category, which was considered premium. This year we have launched UHD webOS TV-powered ultra-premium Smart LED TVs in India. These are large-screen TVs that offer a clutter-free experience to our users. It also comes with an easy-to-use that can be maneuvered using voice commands. Elista also launched its Tower speakers, which have 140W of sound output to ramp up the home-party scene, making for a totally immersive experience.
StartupTalky: How has the industry you are in changed in recent years, and how has your company adapted to these changes?
Pawan: The most significant shift that has happened is the change in the production base. Most organizations have shifted most of their production from China to India. There is greater accessibility for Make in India products. The manufacturing capabilities in India have improved significantly, and the ecosystem has also matured.
At Elista, we have been extremely bullish about Make in India. This is our third year running, and we manufacture most of the products in India. Even for the international markets we are entering, we are aligned to Make In India and are already in talks to set up a manufacturing facility in India in 2023.
StartupTalky: How do you stay up-to-date on the latest trends and developments in your industry?
Pawan: Manufacturers must be cognizant of consumer behavior in the consumer durable industry. In addition, technological changes are taking place at a break-neck speed. We have our pulse on the market and track all the changes taking place in the sector. Elista also has a full-fledged R&D center where we study all the changes and work on innovations.
StartupTalky: What key metrics do you track to check the company’s growth and performance?
Pawan: Given that we are still in the infancy stage, we track two parameters for our growth. First is our distribution width and growth in revenue. It is our endeavor to spread our presence in the country and continue to grow on a year-by-year basis. For the current year, we have set a target to achieve Rs 250 crore in revenue and looking to clock over Rs 1,500 crore by 2025.
StartupTalky: What were the most significant challenges your company faced in the past year and how did you overcome them?
Pawan: In the past year, the biggest challenge has been the persistent demand-supply imbalances that have impacted the demand momentum. Another big challenge the industry has to face inflationary pressures due to the ongoing geopolitical situation. To overcome these, we have strengthened our India manufacturing. Despite the rise in prices, through our quality offerings, we have been able not just to sustain the demand but even grow in the categories in which we are present in.
The burgeoning middle class in urban areas and aspirational demand from rural India is an excellent opportunity for us. We will continue to offer technologically-
advanced, feature-rich products at competitive prices to suit their needs.
StartupTalky: Repeat purchase is one of the most important parameters on which most e-commerce brands are betting. How do you keep your customer engaged to stop churn?
Pawan: For us, data is oil. We use the data that we have at our disposal to cross-sell. When someone buys our product, he/she is already exposed to the product and our promise. We try to entice them with our great product offering and even offer them exciting offers and discounts to buy the following product.
StartupTalky: What are the different strategies you use for marketing? Tell us about any growth hack which you pulled off.
Pawan: Values-driven consumption in India is rising, and we have been able to tap this segment well. We have two iconic cricketers as brand ambassadors – Suresh Raina and Ishan Kishan. They have worked wonders for our brand, and we have used them well by making our packaging stand out with a popular face in the market. We are essentially strong in the Tier 2/3 brand, and to sustain our growth in these markets, we continue to invest in retail branding. We are also aware that the consumer from tier 2/3 are also digitally savvy and hence promote our brand digitally to reach out to them.
StartupTalky: What are the important tools and software you use to run your business smoothly?
Pawan: We are currently using Zoho people and Zoho Expense for the smooth functioning of our business.
StartupTalky: What opportunities do you see for future growth in your industry in India and the world? What kind of difference in market behavior have you seen within states in India?
Pawan: There is considerable growth potential in the product categories we are operating in, as the penetration level is still low. India is a large country with diverse cultures and needs. In many ways, our country is equal to many countries in size and consumer preference. The product needs of one state can be very different from the others.
For example, in dry areas, consumers prefer to buy desert coolers, while in many other states, the requirement is that of window coolers. We offer a diverse portfolio to cater to these varied needs. Our product promotion strategy is also customized as per the region’s preference.
StartupTalky: What lessons did your team learn in the past year and how will these inform your future plans and strategies?
Pawan: Despite the inflammatory challenges, the consumer durable sector has seen healthy growth this year. This year’s most prominent lesson that we have learnt is that consumers will always continue to prioritize their needs. They will also seek affordable quality products. They may put off buying luxury products, but the demand for coolers, washing machines, and refrigerators will continue to be strong. Keeping this in mind, we will be looking at strengthening our product offerings in these segments.
StartupTalky: How do you plan to expand the Customers, SKUS, and team base in the future?
Pawan: We will expand our footprint in India and internationally in the coming year. We are also looking to enter into new product categories and will diversify into water dispensers and deep freezers. We are also looking at launching at expanding our presence in the trolly speakers. The team base will be enhanced, keeping these requirements in mind. We are hoping that the consumers that consumers will connect with these product categories that we are launching and will continue to trust us as they have been doing.
StartupTalky: With so much hype around d2c brands spending on ads, what will be your growth strategy, organic or inorganic? How do you plan to work around SEO and content marketing?
Pawan: Since we are a budding brand, we are looking for organic growth as there is a lot of scope in the market. We continue to invest strategically in enhancing our reach and are focusing on over 50 keywords.
We thank Pawan Kumar for spending his valuable time and sharing his learnings with all of us.