The Noida-based fan and switchmaker’s strategic business unit was busy identifying a new category to expand to that would offer higher margins than its electric cables business that brings in most of its revenue.

“We looked at several categories, and we realized that personal grooming combines many exciting opportunities," said Saurabh Goel, executive vice-president at Havells, in an interview. Goel heads the strategic business unit.

“Personal grooming gadgets in India is a very small business and is largely known among millennials. We realized by entering this business, we will have a product portfolio, which caters to this demographic, something we did not have until now," he said.

According to Goel, the market in India is growing 20-25% compounded annual growth rate (CAGR) and will keep up the momentum, worth Rs1,500 crore this year.

In February, Havells finally announced its line of personal grooming electronics for men and women, which included shavers, trimmers, and a hair dryer and hair straightener for women.

However, Havells’ ambition is to sell electrical goods.

On Sunday, the company announced it was set to acquire Delhi-based Lloyd Electric’s consumer business for Rs1,600 crore.

Also read | Havells buys Lloyd’s consumer durables business for Rs1,600 crore

Lloyd sells refrigerators, washing machines, ACs, TVs, and other small home appliances.

Goel said that there is a huge gap in the personal grooming market, which a home-grown line of products can address.

“Philip’s clearly dominates this market in India", he said. “There’s also Panasonic and Braun, and then a smaller presence by brands like Vega and Nova."

Havells spent the year and half conducting research and development with its vendors in China, Vietnam, and other southeast Asian countries to make sure the products were a natural fit for an Indian market. “The design is our own, and Havells tests the quality", Goel said. “There are tonnes of personal grooming electronics among vendors, but they range across all kinds of quality levels."

Havells’ engineers looked at several products in each category, and made several changes to them to “suit the Indian consumer", Goel said.

“For instance, we know from experience that the typical Indian bathroom almost always has some water on the floor, in the basin", he said.

Goel said the company also made sure they selected products that came with a USB port for charging, eliminating the need to lug around an additional charger.

Havells is betting that it will be able to tap into the latent demand for electronics for shaving and trimming needs, and plans to push its range through its 6,000-strong network of distributors, Goel said. Havells also operates a franchisee network of 375 branded stores called Havells Galaxy across the country.

“Of course, we would like to go with the top down approach and fish where the fishes are," Goel said. “First we will cover our metros, apart from our Galaxies, which will carry them if they feel they can sell the product, wherever they are. But our top down will be much larger in chunk because we already have an existing network."

Besides, Goel added, physical stores are a good place to introduce the customer to these gadgets with safe demonstrations.

But why push an expensive product popular among the young in physical retail stores? Goel said that he doesn’t think personal grooming is an “online" category.

“But I think it has become one", he said. “Because retailers in this category don’t have the muscle strength and widespread distribution network. Selling it on an online marketplace is the easiest strategy, and you are instantly all-India", Goel said. “And the worst thing to happen will be having to give discounts in the marketplace," he said.

In February, Pune-based Syska also announced its foray into the personal grooming sector with an exclusive sales agreement with Amazon.in. Syska, too, is selling shavers, trimmers, hair dryers and hair straighteners under its brand name and has roped in actors Sushant Singh Rajput and Tamannaah Bhatia to endorse it.

Havells is also using the launch to promote electric shavers for children with a separate kids’ category. “This appeals to parents’ rising concerns for hygiene and safety for their children," Goel said. However, this category will only have the one product, an epilator-style trimmer and shaver for babies.

For now, Havells is planning to import its entire product portfolio from its Chinese and southeast Asian vendors and set up a manufacturing facility in India once the market has stabilized, Goel said, although he declined to share a timeline or a target investment for the category.

“Over the last few years, we have been looking for the right opportunity to foray into the consumer durables business in India", Havells India CMD Anil Rai Gupta said in an email statement. “We have been expanding our product categories competently in the FMEG segment. However, for consumer durables, we realised that we would need to develop capabilities for a new distribution channel. Therefore we decided to go for an acquisition."

“Lloyd fits into our strategy of going deeper into consumer’s homes, and driving domestic expansion", Gupta said in the emailed statement. “Entry into consumer durables is also synergistic to our current business. The country’s consumer durables business is pegged at $15 billion and growing at double digits. This acquisition puts us in a very strong position."

“This deal is priced very well at ₹ 1600 crore for a company with a ₹ 1200+ crore turnover", an analyst at an equities brokerage firm said, requesting anonymity. “Most deals are priced at much higher multiples."

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