Household electrical appliance maker Glen Dimplex is known for controlling €1.5 billion worth of global sales through a core team of just 17 people at its headquarters in Dublin. So when three of those 17 people, including founder-chairman Martin Naughton, descend on India in the peak of summer, there’s probably a lot going on.
The Irish company’s top management team was here to review the company’s two-year-old tie-up with Bajaj Electricals for marketing and partly manufacturing the Morphy Richards range of appliances in India. “We’ve come to spend some time with our partners and check out the chemistry,” says Naughton. “The other point on the agenda is to make plans for the future.”
Those plans may include Bajaj manufacturing and exporting some products in the Morphy Richards range, which would be quite a breakthrough in an industry that was one of the first to face the onslaught of competition from China.
Glen Dimplex currently buys $175 million worth of appliances from China, but it now wants to develop India as an alternate sourcing base. “They don’t want to put all their eggs in one basket,” says Bajaj Electricals president R Ramakrishnan.
The first Morphy Richards product to be exported out of India is likely to be dry irons, an item that China doesn’t make too well. Bajaj currently makes dry irons and food processors under technology licence from Morphy Richards, while other products in the range, such as steam irons, coffee makers, ovens, toasters and hair dryers are imported.
Glen Dimplex has incorporated some design changes for the products made for India “” such as making them repairable. “The West has a disposable culture, so product elements there are fused and cannot be opened,” says Glen Dimplex CEO Sean O’Driscoll. “For the Indian market, we’ve created products that can be unscrewed, opened and repaired.”
The Glen Dimplex design studio in London has also created an electric tea maker for the local market, which brews tea the Indian way “” boiling the milk, water, tea and sugar together. Priced at Rs 1,695, the product is the company’s most recent launch.
“We do a lot of research on lifestyle,” says Neil Naughton, son of the chairman and CEO, Glen Dimplex Exports. “The tea maker is only the first of our products designed specially for India.”
Though it has yet to earn a profit for Bajaj, the Morphy Richards range notched up sales of Rs 16 crore last year, in a market that’s estimated to be growing at 10%. Hand blenders and steam irons seem to have caught the Indian consumers’ fancy, and are the two fastest-selling products in the range.
Bajaj sells around Rs 130 crore worth of products under its own brand name in the same categories as Morphy Richards, so it has created an entirely separate marketing team and distribution channel for the global brand.
The brown goods category has received quite a boost of late from the retail boom, with showrooms allowing toasters and blenders to occupy space that was earlier reserved for the more expensive white goods category. While in India, the Naughtons threw a special party for Morphy Richards’ distributors and major retailers, in their apartment aboard The World, a cruise liner then anchored at the Mumbai docks.
A private, family-run company, Glen Dimplex has grown over the past three decades through the acquisition of a number of European appliance brands, one of which is Morphy Richards. The group consists of 24 manufacturing companies, operating in Ireland, the UK, France, Germany, Holland, Hungary, Norway, Canada and China.
Today, Martin Naughton sees many similarities between India and the Ireland of his youth. “We used to have high unemployment and high levels of immigration, just like India has today. But I see things changing dramatically. India’s profile has really gone up in the business world. I think it will soon be like Ireland is today, where people are now looking to come in rather than leave.”
From The Economic Times