Symphony Bets On E-commerce, D2C For Resurgent Summer Sales Of Air-coolers

After subdued domestic sales, Ahmedabad-based Symphony Ltd., India's largest branded air-cooler maker, is looking at resurgence in summer 2022 sales on the back of renewed focus on e-commerce and direct-to-consumer (D2C) online channels

The world's largest manufacturer of air-coolers is not only witnessing a spike in share of e-commerce platforms such as Amazon and Flipkart in its domestic sales but also from its recently launched direct-to-consumer (D2C) website.

While bulk of Symphony's domestic sales happens through the general trade, over the last couple of years amid the pandemic, share of large format stores (LFS), e-commerce and D2C has been growing. On the back of rapid growth in sales from e-commerce and D2C, share of general trade has fallen from 90 per cent to now 80 per cent while the other three categories contribute a combined 20 per cent of domestic sales now.

Citing a Technopak data of the overall industry, Achal Bakeri, Founder, chairman and managing director of Symphony Limited said that the D2C channel has grown around 20 per cent in the past two years, led by the pandemic-infused demand, and it is expected to grow 15-20 per cent in the next five years.

Apparently, the Covid-19 induced lockdown and multiple waves of the pandemic had seen Symphony Limited witness a dip in its revenue for the financial year 2020-21 to Rs 488 crore from Rs 716 crore in FY 2019-20, led by a decline in domestic as well as overseas business.

So much so that the general trade which buys air-cooler stocks on advance payment from the company sat on huge inventories for a couple of years, said Nrupesh Shah, executive director of Symphony Ltd.

"While general trade operates on a 100 per cent advance payment basis and buys stock ahead of the summer season. For the last couple of years, due to consequent waves of the pandemic, it was sitting on huge inventories which is now getting diluted due to robust domestic demand this year on the back early onset of summer. However, it is e-commerce and D2C which are posting rapid growth and may boost residential as well as enterprise air-cooler sales this summer season," Shah added.

The resurgence in domestic demand was also evident in the company's revenue for the first nine months of the current financial year 2021-22 which grew by 15 per cent to Rs 679 crore by December 31, 2021 as against Rs 586 crore for the nine months period ended December 31, 2020.

Now, in a bid to boost summer sales through its D2C platform, Symphony Ltd has offered a special discount of Rs 250 for the first-time users who can avail it with coupon code WELCOME250 and get free delivery of the coolers across India. The company has also enabled consumers to find a wide range of air coolers on the website starting from a personal cooler with a 22-liter tank to a large space cooler with a 200-liter tank.

On the other hand, Symphony Ltd is also betting on its overseas business including both exports from its Indian facilities as well as production and sales from its subsidiaries in Mexico, China and Australia.

"Exports too took a hit but our operational subsidiaries in these countries performed well despite Covid and sailed through their respective summer and Covid-19 waves. For instance, while the US grew by more than 100 per cent, Australia too saw a decent growth," Shah told Business Standard.

In an attempt to break the cyclical nature of air-coolers, the company has over the years not only depended on India's domestic summer sales but also built capabilities to cater to markets which have summer seasons at different times of the year.

Meanwhile, the company is not only exporting India made residential air-coolers but also betting big on enterprise sales by bringing in overseas products from its operational subsidiaries to India.

"We have already had around 4000 installations of enterprise air-coolers across factories, warehouses, data centres and educational institutions. We expect this segment to contribute as much as residential air-coolers in the medium term," Shah added. Currently, the enterprise segment contributes less than 10 per cent of total domestic sales and 15 per cent on consolidated basis.