Neeraj Bahl, managing director & CEO at Bosch & Siemens Home Appliances India, shares the company’s outlook in the face of health and economic crisis caused by Covid-19 pandemic, in an interview with Sourcing Hardware. The company is a subsidiary of German appliances major BSH Hausgerate GmbH.
How do you think the Covid-19 crisis will play out in the coming months and years?
In light of the Covid-19 situation, I think that customers will gradually focus more on hygiene-led products with convenience. They will also naturally shift to e-commerce keeping in mind the safety and avoid venturing out in markets. In line with the situation, BSH will service the required e-commerce channels as per consumer needs or wherever the customer is present. We know that the channels are now becoming omnipresent as most of the offline partners are looking at building their e-com abilities, and on the other hand, e-com players are trying to reach every corner of the country. This will be beneficial for the end-consumers as they get access to more dealers and more brands.
Every crisis has a silver lining. What market changes and demand drivers do you visualise, which may open new fronts for your company?
Yes, there will definitely be a change in the demand and preferences of consumers after the lockdown lifts. BSH, being the market leader in the dishwasher category with more than 50% market share, is seeing a surge in demand for dishwashers in particular. Additionally, consumers will be more inclined towards hygiene and cleanliness in the current scenario. Hence, we expect a surge in front-load washing machines which have an allergy-plus programme that cleans laundry at 45 degrees Celsius making it a germ-free laundry. With the monsoon season approaching, we also anticipate an increase in demand for Bosch dryers and washer dryers that offer drying at 50 degrees Celsius, which assures germ-free laundry.
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How has Covid-19 affected your industry? What may be the mid-term impact of this assault?
With the Covid-19 outbreak, things are not as we planned them to be for the year 2020. It has been a tough time for the consumer durables industry. For us, the sale season begins in the month of July, and we remain optimistic about the same for our washing machines and dishwashers. We have already been receiving pre-orders for these products. However, from a refrigerator sale and manufacturing standpoint, we have been impacted. We were expecting a healthy double-digit growth for the year; however, given the current situation, we do not expect the same.
We have now resumed operations with our exclusive brand stores across 17 cities in the country, including Bengaluru, Shimoga, Mangalore, Chennai, Chandigarh, Kochi, Kolkata, Coimbatore, Erode, Hosur, Trichy, Karur, Madurai, Dehradun, Haldwani, Rudrapur and, and Panaji.
The stores in Dehradun, Haldwani, Rudrapur and Chandigarh will be operational on alternate days in line with the social distancing guidelines by the local government. All BSH stores are following rigorous sanitisation procedures since they have become operational. We are welcoming customers on an appointment basis only and making sure that customers who walk in maintain at least a distance of 1.5 meters between them. We need to accept the new normal, as we have seen that social distancing has been instrumental in delaying the widespread. all our products such as mixer grinder, washing machines, dishwashers, refrigerators, and cooking appliances are on display in the stores.
Crisis management is a critical element of leadership. What initiatives did your strategy team take to safeguard your stakeholders?
Amidst the national lockdown, BSH is the only company in the industry that has given an increment instead of salary cuts or job cuts. Our employees were given an excellent variable pay and we introduced a new insurance policy inclusive of Covid-19 for our sales consultants. We have also provided sanitation necessities to all our employees. We have about 1,000 sales consultants who are being paid full salary along with sanitary facilities.
We also have a revised production plan in mind for the year. No one had anticipated the Covid-19 situation, but we have enough stock of products across categories which will help us survive without any production for the next 3-4 months approximately. The government has been responsive to policies and stimulus, which should help bring more liquidity and help the MSME sector to survive and grow.