Christopher Adams

The Business Herald’s markets and banking reporter.

F&P Appliances enters booming India

Fisher & Paykel Appliances plans to enlist the help of celebrities such as cricketer Stephen Fleming to establish its brand in Delhi. Photo / Richard Robinson
Fisher & Paykel Appliances plans to enlist the help of celebrities such as cricketer Stephen Fleming to establish its brand in Delhi. Photo / Richard Robinson

Fisher & Paykel Appliances has launched into India - one of the world's fastest-growing economies - and is planning to enlist New Zealand cricketers and Bollywood celebrities to promote its brand on the sprawling subcontinent.

The Auckland-based whiteware manufacturer is targeting the growing Indian middle class, which is projected to swell to more than 260 million people during the next five years.

Its entrance into the booming market comes as New Zealand works towards securing a free trade agreement with India.

Rather than selling product through retailers, F&P Appliances has secured a local distributor and is focusing on the "built-in" market - working with architects and property developers to fit out newly constructed apartment complexes with high-end F&P kitchen appliances.

The distributor has established an F&P showroom in the Indian capital, Delhi.

It is a similar strategy to the one the whiteware maker has been using in China since its products entered that market almost two years ago.

F&P Appliances chief operating officer for international business Andrew Paykel said the company would establish the brand in Delhi before expanding into other parts of the country.

The company has already capitalised on the cricketing link between New Zealand and India, enlisting former Black Caps captain Stephen Fleming, as well as Indian celebrity chef Ritu Dalmia, to launch the brand at an event held in Delhi in December attended by designers, property developers, builders, architects and government officials.

Paykel said there was potential for F&P Appliances to use Fleming and other Kiwi cricketers at future promotional events.

The company has also indicated it plans to enlist Bollywood stars to promote the brand.

Since the launch the company had already fitted out one Delhi apartment block with its appliances, Paykel said.

He said F&P Appliances spent two years before the launch investigating the Indian market.

"What we found was a consumer-savvy population that prefers new-generation appliances and the kind of genuine innovation that is found in Fisher & Paykel appliances."

F&P Appliances spokesman Matt Orr said double-digit growth was forecast for the Indian appliance market over the next five years.

That compared with the single-digit growth, or even contraction, which had taken place in mature appliance markets such as New Zealand, Australia and the United States over the past few years, he said.

But despite the scope for sales, Paykel said the company - which has been badly affected since the onset of the global financial crisis that decimated demand in its key Australasian and North American markets - would not rush its expansion in India.

"There's a lot to learn about those sorts of markets," he said. "We are mindful that we need to work with the single distributor, get our back-office right and get all the systems and structures in place before we entertain other opportunities."

In November F&P Appliances reported a net profit of $976,000 for the six months ended September 30, down from $11.3 million a year earlier.

"The board remains concerned about macro-economic conditions in our key markets, in particular Australia, and it is unclear how the volatile conditions in Europe will impact Australasia," the company said at the time.

F&P Appliances' shares closed up 1.5c at 48.5c last night - a far cry from the more than $3.40 they were worth before the global financial crisis.

- NZ Herald

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