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The Five Characteristics of Successful Innovators

There is not much agreement about what makes an idea innovative, and what makes an innovative idea valuable. For example, discussions on whether the internet is a better invention than the wheel are more likely to reveal personal preferences than logical argumentation. Likewise, experts disagree on the type and level of innovation that is most beneficial for organizations. Somestudiessuggest that radical innovation (which does sound sexy) confers sustainable competitive advantages, butothersshow that “mild” innovation – think iPhone 5 rather than the original iPhone – is generally more effective, not least because it reduces market uncertainty. There is also inconclusive evidence on whether we should pay attention to consumers’ views, with somestudiesshowing that a customer focus is detrimental for innovation because it equates to playing catch-up, butothersarguing for it. Even Henry Ford’s famous quote on the subject – “if I had asked people what they wanted, they would have said fast…

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White goods players are turning up the volume in an attempt to boost online sales
After a sudden rise in the consumer’s preference towards e-commerce platforms, the makers of white goods such as TV, AC, washing machine and other home appliances are deciding to make their presence felt in a big way on these platforms. Companies such as Sony India, Videocon, Whirlpool, Godrej and the likes are either in talks or have formed alliances with various e-commerce portals. “We welcome online sales. Our current sales through the online platform is not even 1%. But we aim to reach 4-5%,” says CM Singh, chief operating officer, Videocon. The company, which is currently selling various products on websites such as Snapdeal, Amazon and Flipkart, is aiming to set up separate models for online sales as well. “Yes, we are interested in the proposition but this can be done only when we cross the online sales by a certain percentage,” adds Singh. 
Opening a new channel
Though it constitutes just 4% of the overall white goods market, online sales
has been growing at a much faster rate

Source: KPMG India

Similarly, Whirlpool also wants to be a part of the revolution that the white goods industry is undergoing. “We are a mass brand. We have various price ranges and, hence, want to be present on every channel,” says Shantanu Das Gupta, vice-president, corporate affairs and strategy, Whirlpool, India. The company clocks 20-22% of its sales through modern retail and family-owned chains. “We earn about 8% from modern retail. Another 12-14% is through family chain stores,” explains Gupta.
Even though the company sees less than 1% of its current transactions through its website, Gupta expects it to rise to around 5% after stepping into various e-commerce platforms. “We believe that traditional retailers can keep only limited stock. Through the online platforms, we can, however, provide a large variety of products,” adds Gupta. Whirlpool is currently in talks with Snapdeal and other online portals to sell its products. 
Godrej Appliances, which has been present on this platform since 2010, already has a strategy in place and is confident that this will help the company become a significant player in this emerging channel. In order to tackle the new challenges that the online medium offers, Godrej has tied up with a couple of major e-commerce players as well. “We are planning to be present on most of the leading e-commerce portals,” says Kamal Nandi, business head and EVP, 
Godrej Appliances. 

CM Singh, Videocon

Convenience should be the highlight on e-commerce channels and not the discounts — CM Singh, COO, Videocon
Devita Saraf, CEO, VU Technologies
I have observed that traditional retailers are not able to deliver products efficiently —Devita Saraf, CEO, VU Technologies

E-tailers such as Amazon India too are putting their best foot forward to convince white goods players to come on board. Samir Kumar, VP, category management, Amazon India, says, “The customer focus is what brands value the most when they associate with us.” Added to this is the reach that Amazon is able to provide to brands even far across the country and to all serviceable pin codes (19,101) in India without additional costs. “Our platform is a single window that enables brands to break all geographical barriers. Also, the ever-increasing traffic on our site offers greater visibility to the brands,” adds Kumar.

Customised solutions
Amazon has created special brand stores for several companies. For consumer electronics and home appliances, they have stores for brands including Samsung, Microsoft, Philips, Morphy Richards, Kent, Maharaja Whiteline, Usha and a few others. “Several other brands are in discussion with us to set up their brand stores on Amazon and many new stores are likely to come up in the next few months,” says Kumar. 
Godrej confirms that it is open to setting up a separate brand store on an e-commerce platform. “This also gives us a chance to showcase our wide range of appliances to consumers. However, the decision to set this up will largely depend on the particular platform that we are partnering with, their strategy to drive traffic to the site as well as the brand store,” explains Nandi. The company expects to end the current fiscal with 2-3% of its total revenue coming from the e-commerce channel. 
Shantanu Das Gupta
You can't dictate a retailer at what price you will sell your product —Shantanu Das Gupta, VP, corporate affairs & strategy, Whirlpool India
Kenichiro Hibi
We plan to engage with e-commerce giants to ensure pricing parity with offline trade —Kenichiro Hibi, managing director, Sony India
One major conflict that the brands, however, face is with regards to offline competition. Online pricing strategy can be a major problem for most companies. “It is a serious challenge that e-commerce channels has thrown up. We have a strategy in place to tackle this issue in the near future. We’re planning to launch an exclusive range across categories for emerging channels which we believe should resolve this issue,” adds Nandi. “You can’t dictate a retailer at what price you’ll sell your product. We also look at the margin of profit they are making,” says Gupta of Whirlpool.

The brand attracts maximum online sales for microwaves, water purifiers and mobile phones. But companies such as Videocon have decided to set up brand shops where the company itself will monitor the prices. “Our prices will be at par with offline players. Convenience should be the highlight on e-commerce channels and not the discounts,” says Singh. 
But there are companies such as VU Technologies which see online as part of their core strategy. For example, 40% of VU’s sales come exclusively through Flipkart. Devita Saraf, CEO of the company says, “I have observed that traditional retailers are not able to deliver products efficiently. We have our own logistics company and have worked a lot on the back end. Recently, we delivered an 84-inch television weighing 110 kg in Tripura and also launched an android TV with Flipkart. All our strategies are totally customer-driven.”
Likewise, Sony India, whose Bravia range of TV sets and Xperia mobile phones together contribute about 75% of its overall sales, had partnered with Snapdeal earlier this year to appoint its dealers as sellers on its e-commerce marketplace. “We also have plans underway to engage with e-commerce giants such as Amazon India and Flipkart. This will ensure pricing parity with offline trade, genuineness of product and warranty support,” says Kenichiro Hibi, managing director, Sony India. 
According to Voltas, in India, 95% of consumer durable sales are currently sold through distributors, general trade, organised trade and modern trade. The company has, however, observed a growing trend of customers going in for online purchases, especially for ‘plug and play’ categories (consumer electronics). But for large home appliances like ACs, they find the phenomenon currently limited. “In the long run, we see both offline and online co-existing, as it has happened in international markets. Online formats, in the future, should look at different value propositions for the consumer, besides pricing,” explains Pradeep Bakshi, president and COO, unitary products group, Voltas.
Samir Kumar
New entrants with affordable products have increased the competition in the market — Samir Kumar, VP, category management, Amazon India
Kamal Nandi, busines head and EVP, Godrej Appliances
The online space gives us a chance to showcase our wide range of products to consumers — Kamal Nandi, business head and EVP, Godrej Appliances
However, retailers such as Vijay Sales are not in favour of selling their products such as TV, mobile phones and other appliances through the online platform. “The basic challenge is only the discounts offered on e-commerce websites. For us discounting is like hitting below the belt and, hence, we are not burning money to push online sales now,” says Nilesh Gupta, partner, Vijay Sales. 

According to Amazon India, television is currently the second largest selling product in the electronics category after mobile phones. “TV has become an essential part of any home and going by the current trend, we expect to see a huge rise in demand for buying TVs online. New entrants with affordable products have increased the competition in the market, and also the option for customers. We have received orders from all corners of the country including cities like Manglapuri, Guwahati, Solan/Nahan, Srinagar and Gamharia,” explains Kumar of Amazon. 
For the long haul
According to management consultancy KPMG India, the domestic white goods market is worth ₹30,000 crore, of which online sales constitutes around 4%, but is growing rapidly at around 70% every year. Ashvin Vellody, partner at KPMG India, says, “E-commerce will probably provide an incremental channel for companies to sell their products.” However, direct engagement with e-tail could become a good proposition for manufacturers only if they focus on developing sales and support structures. “Besides, they will have to also create channel strategies, differentiated products (online only), adequate processes and technology to make it effective,” adds Vellody.
Though challenges do exist, for now white goods players don’t want to miss out on the e-tail boom, marking a clear shift in the way they do business in the country.