The Indian TV industry took double hit during 2010 one because of economic slowdown and other being the transition from SRT to LED TVs. While many of the brands shut their operations, SPPL – the company that owned brands as Beltek and Crown, chose the licensing way and acquired the rights of Kodak. When you think of Kodak, you think of the Kodak moment. We focus on carrying that still moment to digital moment through Kodak TVs, said Avneet Singh Marwah, CEO of SPPL in a candid interaction with License India.
Talk to us about the brand SPPL.
Super Plastronics was established in 1992. We started manufacturing of plastic moldings and after doing moldings for almost every brand, whether in Tier II or Tier I for televisions, we started manufacturing televisions. That was when we launched our own brands like Beltek and Crown. Both the brands are now 40 year old in India. Looking forward, when there was a transformation from CRT televisions to LED, which was a little lame period and the acceptance for LED in India was such that TVs only from the top four MNCs were in demand. Then we thought that next big thing after smart phones is LED, given the y-o-y increasing market size. Also we had our own infrastructure ready, that is 28 offices around India and close to 350 company-owned service centers. With that kind of infrastructure, it was natural inclination to have a brand of international repute.
What made you zero down at Kodak? 2010 was the time when this transition was happening from CRT to LED, and it was a double hit as the economies were already bearing the brunt of recession. As a result most of the tier II brands either wrapped their operations or forayed into brand licensing space because of the constant losses. We realised that to grow at 5X or 4X, we need a brand with strong equity in market where people can relate to televisions. People recognize Kodak as a camera brand and hence our main focus was from still picture to a digital picture.
Do you think licensing is an effective strategy in white goods segment because here specifications are the top priority?
I think one should really relate to the brand licenses that they acquire. Character brands won't work for segment like televisions. If the brand suits the products then only one should initiate the deal. I don't think one could generate huge ROI by launching televisions for brands like Coca Cola or Pepsi, no matter how big the brand equity is it how popular the brand is. Next are the specifications for brand licensee. I personally feel that licensee should be manufacturer so that you can have an advantage of around 7 per cent over the margins. One should be a manufacturer so that they can keep a check on quality of the product. Also pricing can be managed if the licensees are manufacturing products by themselves.
The brand took off from online portal first. Why so?
Our idea was that if you want to popularize your brand in such a vast country and launch it, huge marketing budget is involved. So the best ROI was to launch the brand online, get visibility throughout Indian and then focus offline. The kind of visibility, impressions and click you get online is very difficult to be replicated offline. The kind of visibility the e-portals gave us, helped us get popular and then we expanded offline as well. We are not planning EBOs or brand shoppe as we don’t find them much profitable. The kind of distribution network we have from last 20 years is helping us place our products offline as well.
Would you be able to maintain same pricing both offline and online?
We have completely different strategy for both the channels. What is being sold online isn’t available offline and vice-versa so that distributor gets his part of margin and the e-retailers get their aggressive pricing strategy.
What is the roadmap of expansion?
We are doing TV and speakers as of now. 2018 roadmap is to launch more speakers and yes definitely there us an opportunity to grow in these segments.