Finolex Cables, which started with electrical wires 65 years ago, saw its turnover rise to over Rs. 4,500 cr in the year ending March 2023. Its foray into fast moving electrical goods (FMEG) including lighting, fans, water heaters, room heaters and iron over the last three years was a logical extension. The segment is growing but understandably contributes only a small percentage to the company’s revenue, given the entrenched cables and wires business.
The brand thrust into the consumer space with a campaign featuring young Bollywood stars Kiara Advani and Kartik Aaryan, themed ‘No stress, Finolex’ last year. Parallelly, it has expanded its retail presence to over 200,000 outlets and has its eyes set on growing that number further.
“We have grown by almost 20 pc last year and our growth was 31 pc the year before. So we are on a growth path and enjoying our leading position in electrical wires, submersible cables and many of the communication cables. And we want to be in the top three in the new product categories in three to four years,” says Amit Mathur, President – President, Sales & Marketing, Finolex Cables.
The diversification started 15 years ago with switches and switchgears. The intent now is to be a one-stop solution for all the electrical requirements of a customer, explains Mathur.
The brand has almost 5,000 channel partners and 650-odd distributors. “They wanted to deal with more products under the brand of Finolex because they trust this brand. There was a demand from the market to launch new products. Also, after the pandemic, we have observed that customers have become more smart, they want to work smart. They want a stress-free life. So we came up with many innovative products in the last three years and that is why our campaign is, ‘No stress, Finolex’,” he adds..
He cedes that there was a disconnect between the new generation and the 65-year-old brand, and hence the choice of young brand ambassadors.
Mathur notes, “We wanted to bridge that gap. We were looking for celebrities who are really connected well to the young generation.” Post the campaign, he believes there is a stronger connection for Finolex with young cohorts.
The 360-degree campaign ran during the IPL last year on Hotstar for almost a month. It was the first time Finolex got onto OTT. On TV, the campaign was seen on general entertainment and news channels in Hindi, Malayalam, Kannada, Tamil and Bengal. It was also amplified across social media, points of sale and OOH media.
The brand is in discussions to continue with the Bollywood stars in its campaigns in the current fiscal.
Deeper Distribution & Data
Online is a big opportunity with consumers buying appliances like fans, irons and water heaters through the channel, according to the spokesperson. Finolex has its brand page on Amazon and is also revamping its website.
Offline, shifting from working only with channel partners whom it billed, and who in turn sold to end customers four or five years ago, Finolex introduced changes to its distribution. It now bills these retailers through a distribution management software and controls the secondary data.
“We are sitting on data of two lakh retailers pan India. This is not enough – we are (probably) looking at three lakh retailers next year because rural electrification is a continuous process. Many of the new emerging towns, many new villages are coming in. Digitalisation is happening, electrification is happening. So we want to add more retailers in the next financial year or even in this financial year,” adds Mathur. The immediate target is another 50,000 retailers this financial year.
The company has launched products to work as starters in smaller towns. A tape roll at Rs.5 or Rs.6, for instance. The lure is the universal utility of the product, whether in homes or for electricians who are key stakeholders, and its price point. Another product introduced to initiate the FMEG folio into these markets is the immersion rod water heater.
“Everybody can’t afford water heaters. The cost of an immersion rod is Rs.300 to 400.
But in a village, you can find a lot of unorganised players in this category. So to increase the reach and penetration, we have launched immersion rods, switch accessories, extension cords, doorbells for tier 2, 3 cities and beyond,” explains the marketing and sales head.
With a range of electrical products, the brand has invested in exclusive outlets branded Finolex House in cities across India. These work as experience centres where consumers can also buy the range.
The first store was launched in Chennai before the pandemic. The paused expansion restarted and it now has 10 Finolex House outlets in cities including Bengaluru and Delhi. A new outlet in Vijayawada is set to launch next month.
The FMEG Play
Among product launches was a BLDC (Brushless DC) motor fan, that Mathur claims consumes only 28 watts per hour as against a normal fan that consumes 70 watts. “We want to be in that category because the customer is looking for energy-saving products,” reasons Mathur.
In the next two to three months one will also see many smart products in the category of home automation, he assures.
As it expands, is the legacy of the brand something Finolex has been able to leverage? We asked the spokesperson how it has helped the brand in its FMEG foray.
“The legacy of this brand of 65 years is helping us. We are not only strong in the urban market, we are very strong in the rural market also. Farmers know Finolex very well because they are using our cables in their submersible pumps in their fields since ages”, observes Mathur.
Awareness is across the board, he emphasises: “Everyone is aware about Finolex. We have increased the visibility in the market by having a good scientific display at the counters. We are on our toes and this distribution really works well because the legacy wire is working as a starter somewhere and then the lighting, fan, water heaters, switches and switchgear are going along with wires.”
With the introduction of Kartik and Kiara last year, everybody is talking about the brand’s new products, claims Mathur.
The brand spends 1 pc of its turnover on marketing but it can be significantly higher in order to establish a new product. The major chunk of spend is still going to television.
On digital, Finolex spends on social media, influencer marketing and search.
“Whenever a customer searches for a fan or wire, we wanted to be in the top two or three. Also, in the pandemic we have seen that many of customers have shifted from offline to online. So we launched an app then. A virtual platform where you can click a photo of your living room or your washroom or your store and drag down our product from the catalogue . You can then see how a fan is going to look in that space, how these switches are going to look on that wall, how this water heater is going to look in that washroom. We developed this beautiful app two to three years back and that is really paying us well. So we are spending a lot on the digital part and these technologically advanced platforms,” he elaborates.
There is also an app for electricians where they can directly connect with the company and view their rewards and transactions with the company in real time.
All of this seems to have helped. Albeit on a small base, Finolex claims to have witnessed sales growth in the new categories by 20 to 25 pc.
The spokesperson notes that Finolex is very new in the FMEG categories and underlines that the market is big.
“Our market share is hardly 2 to 3 pc as of now in this category and we want to be in the top three in all the product categories in the coming three to four years,” he reiterates.
(First published by The Free Press Journal BrandSutra. Content powered by MediaNews4u.com. Feedback: [email protected])
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