The long-drawn winter had cooled off demand in the fourth quarter but now with soaring temperatures, dealers have witnessed a 30% growth across regions. Have you also seen this material uptick in demand and has this aided your volume growth in Q1?
It has. This has been a very good summer after a disastrous summer in 2018. We have certainly seen significant uptick in sales across the country.
We understand that the existing AC brands have resorted to very aggressive schemes as well as higher ad spends to ramp up their market share. Are you also looking at any aggressive schemes for air coolers?
Not really. We have not resorted to anything extraordinary this year. We have pretty much maintained our historical ad spends. We had cut down our ad spend in the first quarter of last year because the summer was not panning out.
But this year, we have reverted back to our normal ad spends. Over and above that, we have not really given any consumer promotions, almost never, and we have not done that either year. In terms of trade promos, that is an ongoing thing that goes on every year, every quarter and this year, this quarter has also been pretty much the same.
Are you worried about higher competition from new players offering products at a very competitive price?
There is certainly increased competition in the last few years. But despite that, we believe in the last year, our market share would have actually gone up. Although we degrew, the overall market also degrew at a higher rate than Symphony did. So, we believe that our market share would have actually gone up.
Our competitors, especially the newcomers, are willing to pay a premium for Symphony for its quality, for its novelty, for its innovations, for its features, performance and all of that.
We continue to offer newer products which are more exciting, which are differentiated and generate the sort of margins and sales for us and help us retain if not grow our market share.
There is no differential pricing strategy that you are adopting, are you? Are you also offering discounts?
Like I said before we have not done anything exceptional this year that we have not done in the past. We offer the normal sort of trade schemes, trade promotions and incentives are nothing extraordinary and not in response to market demands. There is no requirement for Symphony to do that to maintain market share.
Despite a horrible summer and a disastrous FY2018-19, our market share would have actually gone up. We really do not need to resort to any extraordinary measures to retain our market share, other than what we normally do, which is new models and innovation and all of that.
How has the demand been for the replacement market and what is your own expectations for FY20?
We really do not know about the replacement market because it is impossible to track how many people are really replacing an old cooler with a new one but we are very upbeat about the current financial year because we have begun on a very strong note and the trade sentiment has improved dramatically.
The inventory in the channel, which was very high at the end of last summer, has pretty much been exhausted. We are beginning our offseason months on a clean slate and with very little inventory in the channel. We are very upbeat about the current financial year.
What is it that you are witnessing in terms of slowdown in the real estate sector and the consumption sector as a whole? Has that impacted you?
That is true. We hear from our trade channel partners that there is a general overall slowdown but as far as Symphony is concerned, the summer has been good and has overshadowed the overall slowdown in consumption. So for us in the air cooling business, what matters most is the sensitivity to temperatures and not the economy.
If the economy is going great guns but the temperatures are not high enough, then coolers would not sell and the converse is true. For us, this year, notwithstanding the slowdown in the economy, the summer has been fairly good and consistent so far. The sales have been very good.
We do hear from our channel partners that there is a slowdown, real estate of course, is fairly muted and all in all what one reads about the slowdown in the overall economy seems to be fairly true.