The country’s remittances, according to the State Bank of Pakistan, clocked in at $13 billion in fiscal 2012. Meanwhile, consumer spending in Pakistan has increased by an average of 26% in the past three years, according to a November 21 report issued by Bloomberg.
These trends have helped companies like Dawlance, a local giant in a home appliances market saturated with international brands.
Dawlance dominates the market in at least three home appliances categories and has grown at a consistent 25% over the last five years on the back of rising urban middle-class and rural incomes, and record remittances.
The Pakistani company, which manufactures home appliances such as fridges, microwave ovens and freezers, expects to gross Rs24 billion in sales by the end of fiscal 2013, according to Head of Marketing Hasan Jameel.
The company closed its top line at Rs18 billion in fiscal 2012 and has set a new target of Rs24.5 billion for the current fiscal year, Jameel said – which translates to a 36% increase in revenues, if realised.
Operating in Pakistan since 1980, the Karachi-based manufacturer of refrigerators – its premier product – freezers, washing machines, microwave ovens and air conditioners has become a market leader in three of the five categories due to its innovation-focused strategy. The company’s network comprises of four factories, a vast network of 1,800 retail outlets and sales offices in 16 cities.
With its eyes set on becoming a global brand, Dawlance has already entered 11 other countries. The company is exporting its products to Africa, the Middle East and the Subcontinent.
“Innovation is the key concept in Dawlance’s success story,” said Jameel, while briefing media on the launch of Dawlance’s new range of convection ovens on Monday.
Jameel related the story of the Dawlance microwave’s evolution from a conventional oven launched in 2001 to the new technologically-advanced models. “The feedback was great when consumers started using our microwave ovens for cooking purposes,” Jameel said. Keeping in mind this change in consumer preferences, the company kept innovating. “The products launched today are a product of that innovation strategy,” he said.
Unlike in the past, when people used the microwave for warming food only, one-third of the customer base today uses the microwave oven for cooking food as well, Jameel said while sharing the findings of an internal research study.
This kind of continuing research and development is crucial to the company’s success. As it strives to create products that cater to local demands, this change in consumer habits has impacted the industry’s profitability equation by a great deal – its annual sales have surpassed 300,000 units, compared to only 10,000 to 15,000 units some 12 years ago, according to Jameel.
“With our extended range of microwave ovens, we are redefining the cooking experience and changing the misconception that microwaves cannot be used to cook,” Naushin Shahid, Category Manager, said while briefing the media about the features of their new product range.
The prices for the new microwaves ranges between Rs10,000 to Rs19,000, depending on the features and model of the product.
The products have some impressive features. The DW 125, for example, comes with a barbecue rotisserie rod – a must-have for a nation where grilled meat features prominently on almost all indigenous cuisines. The DW 125 and DW 115 models also have a calorie indicator for diet-conscious individuals. The DW 112 is expected to be the most popular model, because of its family-sized 20-litres capacity. Company officials say it hopes to cater to well over 50% the total market. One of the main innovative features common to all three models is a specially designed Teflon-coated pan that helps cook all kinds of breads, especially local varieties like ‘naan’, ‘sheermal’ and ‘parathas’.
Published in The Express Tribune, January 1st, 2013.
Like Business on Facebook to stay informed and join in the conversation.