Bosch Siemens Localizes for India Market

In an interview with Forbes, Gunjan Srivastava, the CEO and managing director of Bosch Siemens Home Appliances recounted how his company differentiated itself in the competitive market of washing machines.

The prevailing front load washing machine market in india was dominated by machines that could wash 13 pounds of clothes. However, their own research documented that a machine that could load 15.5 pounds was a necessity in India, given the prevalence of extended families. Even though the 13 pound capacity machines had a market share of 85 percent while the latter accounted for around 15 percent, they stood by their research and entered the market with the larger capacity front load product in September 2014. Their strategy was substantiated by a research report put forth by Gfk Nielsen which stated that the market size for the larger machines had subsequently risen to 25 percent.

Bosch Front Load Washing Machine

Bosch Front Load Washing Machine

The Bosch Siemens Home Appliances research further reported that consumers wanted shorter wash cycles, faster drying, lower power consumption and lesser use of water. Some consumers wanted a feature where they could add more clothes mid-cycle, while others wanted a special cycle for saris and dhotis. With the aim of tapping the top 200 cities in India, the company realized the need to incorporate what the consumers wanted in the machines they manufactured in India.

“Voltage fluctuations are common in India and we could have sold the product with an external stabilizer, but we realized that the consumer wouldn’t accept this. So we incorporated an internal stabilizer (this is a modification that most multinational home appliance companies have made for the Indian market). Second, clothes don’t dry easily in the monsoon. That is when consumers feel the need for a powerful dryer. We ensured the machine we built in our Chennai factory had high drying efficiency,” Srivastava explained.

Additionally, having a dual-brand strategy helped, where the premium Siemens brand was sold in Mumbai, and the more affordable Bosch was marketed in South India.

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December 14, 2015   No Comments

Can English Brothers Sell Chapatis in India?

Brothers Charles and William Eid from the United Kingdom set up Signature International in 2011 – a production facility making flatbreads in the city of Nashik, 200 miles north of Mumbai. Built to European standards, the vision at that time was to set up twenty  factories in India by 2020. While they are a tad behind this target – their second facility will be built over the next 20 months – they have been able to bring the business to the U.K. too, as Signature Flatbreads.

The bakery has four production lines and supplies flatbreads including chapattis, parathas, naans and kulchas to hotels, business canteens, and quick service restaurants. Business is now profitable with revenue of $7.5 million  with a 40% rate of growth expected every year said William Eid.

Signature Chapattis

Signature Chapattis

 

“Disposable income is not high, and when they [Indians] do spend their money they want absolute value for it. And unless you have real authenticity in the breads that you make, you don’t attract the custom,” added Eid.

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December 11, 2015   No Comments

NTT Communications Opens Mumbai Data Center

NTT Communications, a unit of the Japan’s $112 billion NTT, opened  its ninth data center in India. The 30,000 square foot facility cost $124 million.

Here are excerpts from an interview of Tetsuya Shoji, president & CEO, NTT Communications with The Times of India:

Tetsuya Shoji CEO of NTT Communications Corp

Tetsuya Shoji CEO of NTT Communications Corp

 

On factors driving the need for the Indian data center, Shoji said that data centers were an important part of infrastructure. Of the many factors spurring their growth were e-commerce, as also the need for disaster recovery by existing and upcoming banks.

On the challenges that he saw, Shoji responded that since securing reliable access to electricity was the biggest challenge for banks in maintaining their own data centers, his company got the opportunity for business since banks preferred to outsource this part of business to them.

On being asked how his company expected to do in India, Shoji said, “India is where we want to make strategic investments. The latest Mumbai facility is not the last. We plan to have three more data centers in the near future.” On NTT’s application for a unified license for national long-distance services in India, Shoji explained that a separate Indian subsidiary of NTT had applied for the license which was meant for large Japanese clients.

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December 4, 2015   No Comments

Satya Nadella Pitches Microsoft to Developers and Startups in India

During his visit to India earlier this month, Satya Nadella, CEO of Microsoft projected his company’s technology and programs as ways to help India modernize both its technical and physical infrastructure, reports Fortune. He restated the Microsoft program launched earlier this year which would provide a boost to the startup ecosystem in India. As part of this program, the company offers $120,000 per year of free Azure Cloud services to each of the qualified startups

Satya Nadella

Satya Nadella, CEO of Microsoft

A few months ago, Microsoft opened new India data center regions in Pune, Chennai, and Mumbai, bringing its total to 24. Research firm Evans Data Corp. estimates that there are about 2.75 million developers in India today, making it second only to the U.S.

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November 22, 2015   No Comments

Supply Chains Pose Challenges for India E-commerce

India is the world’s biggest untapped shopping market says the Wall Street Journal, as it traces one online order and its delivery on a 1200 mile journey from Surat in the western state of Gujarat where the garment was manufactured to Madurai in the eastern state of Chennai where the customer was located.  The journey—about the same distance as New York to Kansas—involved at least 30 people, two overnight truck journeys and a long-haul flight!

 

 

The Order:

Ms. Rajamansingh orders a $3.06 sari on an e-commerce site Shopclues.com where around 80,000 products are ordered daily. However, that figure can shoot up to 240,000 on Sunday sale days. Shopclues receives 70% of its orders from outside India’s metros (such as New Delhi and Mumbai) mainly from Tier II and III smaller cities and towns.

 

Distance: 0

Cost: Negligible

Mode: Internet

Time: Negligible

 

The Journey:

 

Fabdeal, the manufacturer of the sari, ships the parcel from Surat to a warehouse in Bhiwandi on the outskirts of Mumbai. Transporting by road has its challenges of negotiating poorly maintained roads in various parts of the country, coupled with the flooding caused by rain in the monsoon seasons.

 

Distance: 162.4 miles

Cost: $ 0.11

Mode: Truck

Time: 8:30 hours (compared to about two-and-a-half hours for a similar distance drive from Washington, D.C. to Philadelphia.)

 

 

From the warehouse in Bhiwandi the packet is transported to the airport in Mumbai.

Distance: 41 miles

Cost: $0.02

Mode: Truck

Time: 4:17 hours

 

Most online orders travel on commercial flights and delays are common due to space constraints in the hold, as also because of packets being rejected if the airline staff suspect prohibited items such as batteries in the package. For e-commerce companies, the difference between profit and loss is often whether a package travels by air or by road.

 

 

Ms. Rajamansingh’s sari then flew a day late from Mumbai Airport to Chennai Airport since it missed catching the earlier flight.

Distance: 643 miles

Cost: $0.33 (half the total shipping cost)

Mode: Plane

Time: 4:47 hours

 

The package arrived late in the evening in Chennai and it missed the single, daily truck that plies between Chennai and cities farther south such as Madurai.

 

Distance: 292.6 miles

Cost: $0.18

Mode: Truck

Time: 10:40 hours

 

The last lap from the city of Madurai to Ms. Rajamanshingh’s door was completed by a man on a motorcycle

 

 

Distance: 2.1miles

Cost: $0.002

Mode: Motorcycle

Time: 20 minutes

 

GRAND TOTAL
Distance: 1159.5 miles
Delivery Cost: $0.70
Modes of transport: Three
Time in transit: 32 hours 25 minutes
Total time: Two days, 19 hours, 6 minutes

Fabdeal, the company featured in this story is one of many companies that has benefited from the boom in online sales. Before it began its e-commerce business in 2012, sales grew 10%-15% a year, now they are growing by 50% a year.

 

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November 10, 2015   No Comments