What’s your view of consumer sentiment this year?
I think we should put everything in perspective. The Indian economy is still growing, our business is still growing, and obviously there are times when it grows faster and times when it grows a bit less faster but that doesn’t really impact our strategy. We have been here for more than 80 years and we are committed to stay. So we don’t want to lose focus based on the situation that you see even within one year.
In general terms, I think the businesses that we operate in, be it in kitchen appliances, personal care or garment care, those are businesses consumers tend to keep spending on. They consider it vital for their lifestyle. These categories are less dependent on the state of the economy or inflation. I think what is important is that you have products and solutions that really meet or exceed the needs and requirements of the consumer and then he is also willing to pay for it.
How has the consumer in India changed?
A lot has changed but let me mention predominantly one key trend that we see and that is consumers really aspire to lead a lifestyle that is offering them a feeling of well being, that also drives a lot of the decisions they take in terms of purchasing. The target audience for us also has some strategic choices because customer requirements and needs are different in different parts of the world and even within a country they are very different. Take cooking habits, the way we prepare food is different in many countries but even within India, whether you prepare food in the south, north or in the east, it’s all different. Basically, people want to lead a good lifestyle, that also includes food preparation and we want to have products that resonate with the Indian personally, that are really relevant to them.
Also, personal care is extremely important—male grooming, trimming—but then also making sure that you market it with local endorsements using local celebrities that people can identify with, so our marketing approach is also very local.
Lighting contributes to more than 50% of your India revenue. Where is the growth in this sector coming from?
There is a very strong trend towards energy efficient lighting. While conventional light sources were very energy inefficient, up to 95% of the energy consumed was dissipated into heat, you saw new technologies come up like compact fluorescent and now more recently LED (light emitting diode). LED is a great product not only to create a cheerful atmosphere but also to reduce your energy cost. Those are drivers behind the lighting market, because of the technology change that you see.
Lighting is a very important part of Philips, always has been and this is what the company started with. We are only at the beginning of a revolution in lighting. Not a lot of people know that 19% of global electricity is being consumed by electric lights, so if you can really change all of the conventional inefficient light sources to energy efficient lighting, the energy saving potential is phenomenal.
We are driving the LED revolution globally as well; we are well positioned there. We also feel it’s a great way to deal with some of the challenges that you see like dependency upon energy, you have many parts of the world where there are power outages, so the more we can take energy off the grid the better it is and it also helps reduce your fuel emissions.
In India, the way we deal with it is that the more energy efficient lighting you have, the less burden there would be on the grid. Apart from that there will also be parts in India where there is no power coverage; it’s around 35%. There we have introduced solar-based lights. In India, lighting is very strong for us and we continue to focus on it.