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BW Businessworld

Brand With A Long Recall

BPL is testing the waters in the white goods market again. This time it has gone the whole hog into the online market, riding on a tie-up with Flipkart

Photo Credit : Bivash Banerjee

Brands drive products and vice versa — and usually both die out together. Sometimes, a brand outlives the product — which seems to have been the case with BPL. The BPL televisions and refrigerators have remained household names long after the company exited from the white goods business in 2008, when its joint venture with Japanese technology major Sanyo ended.

In the 1990s, almost every second home in India owned a BPL appliance, particularly televisions and refrigerators. The fact that memories of the brand have lingered years after the products disappeared from the market, say a great deal about the brand loyalty of BPL’s consumers. “The brand stood for trust and quality. People expect BPL products to last forever,” says Ajit G. Nambiar, chairman and managing director, BPL. The company, he emphasises, had worked hard to live up to the tagline — ‘Believe in the Best’.

BPL has many firsts to its credit. In the television space, it launched India’s first wide screen TV, India’s first 3D TV, India’s first full flat square TV and India’s first 1,000 watt TV, among others. In the refrigerator space, BPL launched India’s first convertible refrigerator known as ‘BPL Converti’ (in which the user could convert the freezer compartment into a fruit and vegetable compartment at the push of a button). It launched India’s first four-door refrigerator and the first ozone-safe refrigerator. The company also launched India’s first VCR, India’s first conversion microwave oven, India’s first portable CD player and India’s first alkaline battery.

In its heyday BPL had 28 factories and 9,000 employees. The company’s products were known to be technology savvy and durable by virtue of a collaboration with Sanyo. The collaboration turned into a successful joint venture (JV) which Sanyo decided to end in 2008 because of difficulties in the global sphere. In Japan, Sanyo Electric was formally shut down after it was acquired by Matsushita Electric the following year. The development led to BPL losing its entire distribution network. Unable to sail on its own, BPL then closed down its consumer business.

“A 30-year old relationship ended out of the blue,” says Nambiar. The company’s consumer division got obliterated then and BPL began focusing on its medical technologies business and other areas such as automation solutions.

Back With A Bang
Nambiar had led BPL’s consumer business, which is now suddenly back with a bang. The comeback trail was paved when Flipkart approached BPL in June 2015 to figure out if there was something both companies could do together. An exclusive partnership between the online retailer and BPL ensued. The two companies began a trial run with televisions to gauge the product acceptance in the market and to their surprise — the response was overwhelming.

Since January this year, BPL has gone the whole hog into the online market — launching televisions in the 24”, 32” and 40” sizes. The challenge for BPL now is to engage with Flipkart’s customers, who are new age and mostly in their 20s and 30s. The online business is a different ball game from what BPL is used to. “But we have seen very positive reviews so far. In fact, 45 per cent of our customers on Flipkart are considered as active Flipkart customers and from a younger age group. After all, we are providing great quality at better value than our competitors,” says Nambiar.

Flipkart has recently begun a policy of easy returns to win over customers used to buying on the assurance of the touch-and-feel experience at physical retail stores. “Despite having the privilege of returns online, there have been no returns so far,” Nambiar says happily.

The company is set to launch refrigerators and washing machines over the next three or four months, but Nambiar is in no hurry to launch new products. “We will first test the waters in the category we are best known for — television — and thereafter we will bring in a range of large home appliances,” he says.

BPL’s absence in offline retail stores doesn’t seem to bother Nambiar, either. “We have an exclusive partnership with Flipkart. While we may not have offline retail presence, our reach and exposure is significantly larger on account of our online strategy,” he says. Today, Flipkart’s share in television sales is higher than that of other online retailers and major offline retailers. So, Nambiar is a confident man. He claims that BPL is already among the top three selling brands for Flipkart.

Together BPL and Flipkart have set a target to ensure that at least 10 per cent of all television sales are of the BPL brand. BPL targets a revenue of Rs 100 crore from sales this fiscal, which should go up to Rs 650 crore in the next three years.

The BPL iQ Brand
BPL is meanwhile, focusing on home automation and intelligent security solutions space through its BPL iQ brand. In the home automation space, BPL has partnered with networking major Cisco for technology. Its surveillance systems include high-end cameras with features such as face recognition, number plate recognition and video analytics to cope with security challenges.

The company believes that by 2020, its business would grow beyond what it was in the 1990s. “The market dynamics are so different today that one can achieve much faster growth in a much shorter time,” says Nambiar.

Fifty Years In Healthcare
The company’s healthcare segment has been silently working its way up during the last 50 years or so. BPL launched the first ECG machine in India way back in the 1970s and still enjoys a dominant share in the ECG equipment market.

In August 2013, Goldman Sachs invested in BPL’s healthcare business and a new entity known as BPL Medical Technologies evolved. The investors roped in GE Healthcare veteran Sunil Khurana as the new entity’s CEO and managing director. Since then, its revenues have more than doubled to Rs 150 crore in 2015-16 from Rs 65 crore in 2013-14.

Last year, it acquired UK-based healthcare company Penlon which has a business worth close to Rs 110 crore. “This year, our aim is to touch Rs 375 crore including Penlon,” says Khurana. BPL Medical Technologies also forayed into the anesthesia segment. It ventured into the anesthesia consumables business, by entering into a strategic partnership with the global leader in the segment, Ambu & King systems. “We are trying to transform from an equipment seller to a solutions provider for hospitals,” says Khurana.

A couple of years ago, it entered into a partnership with South Korea-based Alpinion Medical Systems, for co-branded Ultrasound scanners. BPL Medical Technologies has entered into the mobile health space with its innovative CE-certified product, BPL LifePhone Plus. The wellness monitoring solution enables people to measure ECG, blood glucose and amount of calories burnt.

BPL Medical Technologies is now primarily present in the Indian region but plans to go international soon. “As we build more synergies, we can now leverage the distribution arm of our recently acquired company Penlon,” says Khurana.

[email protected]; @ayushmanb

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