Qimat Rai Gupta started his business in 1958 as an electrical goods trader in Bhagirath Place-an electric wholesale market in Old Delhi. Many tie-ups, acquisitions and more than half a century of operations later, the 77-year old Qimat Rai, founder of Havells is a billionaire today.
Havells stumped competition by its positioning. Its primary product lines cables, wires, switchgears, CFLs, fans, water heaters and domestic appliances are largely commoditised products. Aggressive branding especially on television has helped Havells create a brand recall like no other. Iconic catchphrases like “Shock Laga Kya”.
Havells has invested in a network that rivals its peers. It has one lakh retailers along with over 200 Havells Galaxy Stores and 2500 dealers across the country.
Havells is also famously very dealer friendly. It offers higher credit, larger trade discounts especially on early payments and entertains dealers on overseas trips. All that incentives make Havells a popular brand among the retailers.
Short term hiccups. Havells like many Indian corporates got carried away during the last bull run and bought the Germany based lighting and fixtures maker SLI Lighting, owner of the Sylvania brand. It was a catch-the firm was the world's fourth largest lighting company had operations in 50 countries with over 10,000 distributers, one and a half times Havells' size, loss-making and loaded with debt.
Havells took a debt of 200 million euros (₹1,160 crore at time of acquisition) just before the financial crash following which Sylvania's performance tanked. Havells had to shut down plants and rationalise workforce. Sylvania eventually turned around and Havells reduced the debts in its books. But this incident shows how even well-run companies can get in a mess.
Havells still has a huge opportunity in the domestic consumer durable market in front of it. Its high brand recall will help the company stay ahead of competition.