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Syska LED is banking on retail expansion for its growth

Syska LED is banking on retail expansion for its growth
Rajesh Uttamchandani, Director, SSK Group

July 18, 2016: Citing LED technology as the upcoming technology in India that is growing fast, Syska’s LED business has been the growth driver for its business, and would be the key driver for the next few years. Talking to BizLED, Rajesh Uttamchandani, Director, SSK Group, points out that Syska has created its own strong retail presence through extensive distribution network, which has been one of the major factors for its growth in revenue as well as market size. Here’s the full conversation.

How did Syska LED do in 2015 (revenue wise), as the year was not too promising for the LED manufacturers in India?

LED lighting products would be our growth driver over the next few years as we see our lighting and electrical business growing by 35-40% in the next two-three years. LED technology is an upcoming sector in India, and has been growing fast. With growing awareness and understanding, we saw a lot of acceptance from the consumers in 2015. The key reason for the growth of the industry is the stability factor of the technology, which has brought a huge change in the market.

The innovations taking place in LED products, and their decreasing prices, have both helped in rising demand. Finally, Modi government’s push for usage of LED lights has brought about changes in the ecosystem. So overall, the industry in India has seen positive growth in 2015, and is moving ahead steadily.

Syska, unlike other manufacturers, have created its own strong retail presence through its extensive distribution network. The Syska LED Lounges, the one of its kind in the industry, which are found across India, are helping to achieve more than our target revenue and market size.

What is your take on the government initiative to push LED lighting in India? Is the UJALA scheme leading to market demand for LED lights?

The government is doing a great job in educating about the benefits of LED lighting usage, particularly in residences. Syska being a pioneer in the LED lighting market in India, is also playing a role in creating awareness about the benefits of LED technology. The government push has also helped Syska in penetrating the rural market.

Syska LED has not participated in any rounds of bidding for government procurement. What is the reason behind this strategy?

Syska will not participate in governments tenders. We have our own big plans for the retail market.

Your bulbs are much higher priced than government-determined prices. Please comment

Our bulbs are fairly priced as compared to our competitors. Syska also promises to deliver utmost quality products with extensive warranties and pan-India service support.

Will the price bounce back once the government exits, and the industry fully takes over the LED space?

We are expecting this industry to mature in the next couple of years, and with consumer awareness and upward trend, more and more consumers are adopting LED lighting. Quality and service will play a major role as well. While price will be one factor driving one sector of consumers, the rest of the potential will still go for quality for best returns and savings in the long-term.

Share some information about your latest products and about their technologies.

Taking a step closer to smart homes, Syska is India’s one of the leading players in the LED lighting space. Known for its smart innovations, Syska reveals a whole new dimension to lighting that can be digitized.

The company’s smartest LED bulb ‘Rainbow LED Bulb’, which vows to personalize your experience to the most colorful rainbow shades to choose from, that could be controlled wirelessly, illuminating 3 million colours for every mood.

Syska Rainbow LED bulb revolutionizes digital technology and welcomes a whole new era in lighting with the way we think and experience lights in our homes.

How is the year 2016 for the LED players in India? What is the current demand-supply ratio?

Currently, the LED market is highly bullish in India—a high adoption rate is being witnessed across the country. The current output of LED lighting across the country is approximately 7 million pieces. The current market size of LED light business is around 3200 crore across the country, and this is expected to grow at 55% over the next two years.

Talking about leading demand generating segments, the streetlight sector has seen a major movement in this space. Other sectors are commercial places, retail outlets and hospitality sector as the amount of usage is growing fast.

What are some of the business strategies you have adopted to meet the competition in the LED market?

We are working on creating awareness about the benefits of LEDs, and ensuring availability of the products in close proximity to the consumers. The good part is that, the response till date, has been very encouraging from the consumers as Syska as a brand has achieved a position in the market.

Next, we will focus on retail expansion, as we believe that is the key along with our stronger distribution network. Apart from the new lighting solutions, which we are working on in terms of innovation and the latest know-how, these will be groundbreaking technologies making us stand apart in the crowd.

We already have several launches in the pipeline, wherein we will focus on penetrating households through allied products like Spike buster, LED lanterns and Wheel cords.

Why would buyers choose Syska LED lights as compared to the cheaper LED lights in the market?

Well, there are multiple reasons where we encourage the consumers to buy Syska LED lights. One of the key reasons being our unparallel quality without any compromise. Next, we provide simple and lasting lighting solutions to the users—upto 50,000 hours of life. Advanced technology, energy efficiency and durability puts Syska LED lights years ahead, giving it a clear edge in the market.

Every LED light made by Syska is crafted to meet global standards. Syska LED lights not only have the right technology,but also perform with ease. They are developed specially to optimize their output, outshining many other lights in the market.

What is your expansion plans for 2016-17? Currently, how many manufacturing facilities do you have? Are any in the offing?

The company’s assembling unit is gearing up to manufacture a range of LED lights and accessories. The plant, which has five assembly lines, will soon manufacture 10,000 bulbs an hour. Syska LED has lined up a capital expenditure plan of Rs 500 crore in the next two years to set up two more plants. One of the plants will be coming up in Maharashtra, for which the company has applied to the state government for land. With the two new plants that will be operational in the next two years, the company expects to roll out 1 crore bulbs, 50 lakh tubes, 10 lakh down-lighters and panels and 1 lakh streetlights per annum.

How do you see LED lighting’s future in India in the next 5 years? And how Syska LED will be positioned in the LED market?

Things are looking up in the LED sector. The next few years are all about interesting projects in the intelligent lighting solutions space. An all-new era of smart street lighting is emerging, thanks to LEDs.

As long as you don’t compete on price and commoditized products, and build great technology and differentiated offerings, money and success will follow for several brands in the industry.

We are also consolidating our pan India sales network, leveraging the distribution strength. With the 1500 strong sales force, we are tapping 330 distributors and more than 40,000 dealers across the country to make LED solutions available in every corner of India. Besides, we are also ramping up our 80 LED Lounges, to 160 by the end of the year. We will also penetrate overseas markets like Dubai, Bhutan, Bangladesh, Nepal and also SAARC countries. We also have long term future plans for African countries and USA.

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