A conversation with Director Marketing of Dawlance , a reliable brand in appliances industry of Pakistan.
Q. Please tell us about your professional background?
I completed a degree in electrical engineering from NED and started working in 1991. I spent 2 years working as an engineer. After that, I joined IBA for a business degree.
I have a 19 year work experience.// where did he work for 10 years??.
I joined Dawlance in 2000 as a senior brand manager for some products and later on I was promoted as the head of the marketing department. The department has proved to be one of the most contributing divisions over the years.
What is the present situation of the appliance industry in Pakistan?
Internationally, the appliance industry has a 40% presence whereas inPakistanit is only 12 – 13 %. Even though this industry has gone through a rough phase but the present situation is promising. Tracking back, the market was stagnant in 2006-2007 due to the global recession. Since 2008, the industry has been constantly expanding. Lack of electricity is the major hurdle in further growth and it has greatly affected the emerging businesses which target the places where electricity is being introduced. The concept of appliances heavily depends on the availability of power supply. In the metro cities ofPunjab, the purchasing power of the consumer has been reduced immensely since the flood situation is directly affecting the market.Karachi, on the other hand is a strong market. Another issue at hand is the unreliability on plastic money for purchases inPakistan. This phenomenon is also common internationally.
How much workforce do you have?
We have 3500 employees all overPakistan. The number of employees depends on the sales or the services networks. We have the largest network in the appliance industry in the country.
In which cities are Dawlance products available?
We have around 1800 dealers in almost 50-60 cities ofPakistan. This not only covers the tier 1 cities but also the semi urban areas. We have sales branches in 16 – 20 cities, 25 plus service branches, approximately 200 franchises and affiliated networks in areas where we cannot open direct branches.
How do you compare the different regions of Pakistan in terms of sales?
Geographically speaking, it is evident that the metro cities likeKarachi,Lahore,Islamabad,FaisalabadandRawalpindiare the major sales regions. Our areas of concentration are the 2nd tier cities where we have our direct branches.
In this industry, there are two important things to consider. Firstly, the delivery must be available when required directly. This is connected to the strong distribution & logistics network implying that one should have a warehouse in that area from where the sale is being operated. We have a warehouse in all the 16 cities where our sales network is located thus immensely helping in quick deliveries. As it is all about experience & satisfaction of the customer and word of mouth publicity, one needs to have a very efficient network to help achieve the goal of reliability.
Currently, how many products are being manufactured and what is the monthly/annual production capacity of each product?
We have 5 different products being manufactured and the quantity for each is different. For microwaves, we import kits from abroad and assemble the product instead of manufacturing it here (which is same for all the brands). This obviously is not a cost effective alternative. The split air conditioners were partially imported and partially manufactured but from this year onwards we are switching to manufacturing it withinPakistan. Our key products like washing machines, deep freezers, refrigerators (chest/verticals) are completely manufactured here. We have four manufacturing factories inPakistan(3 are in Karachi & 1 inHyderabad). The production capacity is more than one million units yearly for all products included.
We cater to the market demand and base our productions on research which is constantly being conducted throughout the year. This research supports us in designing new features or trends according to the customers’ lifestyles. Within a particular category our products are manufactured based on demand and at times we create the demand for particular products.
Do you import the raw material or is it locally available?
If we talk about the key products like refrigerators, the 3 main components – the compressor, thermostat and evaporator are always imported as they are not manufactured locally. Other appliances like washing machines are completely manufactured here.Splitair conditioners are partially imported as mentioned earlier.
Which is the best selling Dawlance product?
All Dawlance products are high in demand. We are the most reliable and innovative home appliance brand inPakistan. However, we are known mostly for refrigerators for which we have a dominant market share.
Tell us about the supply chain of Dawlance, do you have your own fleet of vehicles that deliver the products to retail outlets?
Our sales structure is very direct which includes our company, dealers and consumers. Logistics is outsourced because you need to have controlled and efficient handling. Although, we do not have a private set up for it but we work on related training workshops to maintain our reliability.
Do you have your own retail outlets or just supply to normal retail appliance shops?
At the moment we are dealing through dealers only as we do not have any retail outlets yet.
How many direct and indirect competitors do you have and how do you compare yourself with them?
Pakistanis a very aggressive market. We have different status for different categories. Although we only share 8% of the market with the international brands. This always proves to be a continuous challenge for us. We are competing with the Korean, Japanese or European brands not just technologically but aesthetically as well. No brand has the edge of having the product ranges that we offer the consumers. As far as the local brands are concerned, we hold the leading position due to our after sales services and of course the quality of the products.
Do you think this industry has capacity for more companies to enter?
Pakistanhas a potential market and there are categories where expansion is still required.
Where do you see the appliance industry in the next 5 years?
Technology is advancing every single day. It is very difficult to state about the next 5 years as the changes are so rapid in even one year. This industry will definitely be far more superior then you can envision.
Are you affiliated with any other company?
No, we are not affiliated with any other companies.
What would you like to advice new investors who are entering this industry?
One should have the research and familiarity of the market before stepping into anything which is as big as this. Investment in the right place is always important. If you have the amount that is required then I would suggest putting your money in the hand of a related running company is a far better decision rather than starting out fresh all by yourself. There is no chance of survival if you do not have field related expertise or experience at hand.
What are the future plans of expansion in terms of product lines?
We are very much open to it and are always looking towards innovation within our product lines. We do have certain plans for some products which will be seen soon in the market.