Simon readying itself for the Indian growth story

The company aims to hold 10% market share in the mid-high and high segments within the next five years: Luis Baselga

Simon, the Spain-headquartered electrical components makers, is gearing up to revamp its brand in India and become a key player in the premium segment which, it believes, is poised to grow with the changing socio-economic conditions. The company aims to hold 10% market share in the mid-high and high segments within the next five years, says Luis Baselga, international director of Simon Holding.

Although Simon started its international operations some six decades ago by venturing into the markets of Russia, China, Poland and Mexico, its voyage for India faced headwinds due to improper branding and market positioning of its products. “There were lot of legacy issues”, says Amit Garg, chief operating officer of Indo Simon – the company’s Indian subsidiary.

According to Garg, while the switch and sockets market in India presently is worth Euro 600 million (or Rs 4300 crore at current rate), the premium and mid-high segment accounts for Rs 650 crore, with Rs 200 crore coming from the premium segment alone.

Thus, Indo Simon’s “plans are very aggressive in India. If China contributes most to the group revenue, we believe, India can take the second position in next five years”, Baselga said. Simon, which presently has a 60% market share in its native market, gets 33% of its revenue from China.

And it’s the lesson from China that Baselga wants to use in India as well. “During the last decade, while the mass market segment declined in China, our business grew. As people move up economically our market segment expanded”, Baselga explained.

But unlike its other players in the market, Simon does not want to get in television advertisement soon. It has adopted “a different approach”, says Garg. According to him, the management wants to differentiate the brand with products and by offering more flexibility to its customers.

“We don’t believe in ATL activities, going directly to the people through TV ads, for say. Rather, Simon is trying to impress the architects and electricians who, it believes are the “actual decision makers” and during secondary sales. However, once its brand is positioned in India the company may start to reach out to the “mass market” through regular promotional methods such as TV advertisements.

In 2006, Simon partnered with the electrical equipment and switchgear maker Indo Asian Fusegear to cater to the Indian market. The joint venture ended a few years ago.

Although, the company’s’ eyes are on the premium segment of the market, it is focusing heavily on the tier – I & II cities. “Since, people are more aware of the trend now people who can afford from towns like Lukhnow, Ludhiana and Hisar, are ready for premium and mid-high range products”, Garg said.