EB: Tell us about the ups and downs of BPL over recent times
In 2000, the company had decided to restructure its business and selectively invest in sustainable growth areas such as healthcare solutions and renewable energy solutions. Therefore, tactically, it moved out of the consumer durable space, which was getting less attractive. We are presently still in this category, but with less prominence. We are investing in high growth areas and believe that the brand will make its presence felt once again. We have an impeccable brand identity and a loyal set of consumers. The future looks promising and we can definitely say that we are all set to grow.
EB: What are the latest trends among electronics design houses?
Now the trend is towards environmental concerns. We are, therefore, getting out of lead acid batteries and going in for rechargeable products. Our new products are all RoHS compliant. Lead acid batteries are replaced by lithium iron phosphate batteries, popularly known as Fe batteries. These have a life of 7-10 years and have a very low self discharge. The power density of Fe batteries is higher, just about 150 per cent of lead acid batteries, enabling small form factor designs. The discharge cycles of Fe batteries would typically be 2000 as against 500 for lead acid types.
EB: In the next five years, what are the areas with good prospects for design houses in the electronic field?
Specific to the field where we are in, the main challenge lies in storing and converting energy, but it is even tougher to configure and design high efficiency ferrite based sine wave invertors capable of withstanding high power fluctuations and catering to all kinds ofloads. The other area with good prospects would be the use of energy efficient LEDs in products with capability to harness solar power.
EB: How do you compete with other Indian/MNC design houses?
As the market scenario has changed, now we need to design products based on consumer requirements and then push the product in the market. We have our product differentiation or USP, that is, since we use maximum consumer insights to design the products, they are accepted by the consumers.
We are introducing new renewable energy products. We are also converting all our existing rechargeable lighting products to being solar enabled—something that we have almost achieved. We are also trying to create LED based products of which StudyLite is the first one.
In rechargeable lighting, our current market share is 20 per cent. We expect to have a market share of 15 per cent of the overall renewable energy lighting market in the current year, which is estimated at about Rs 3.5 billion.
EB: Was the product, StudyLite, totally designed and manufactured in India? How long did it take?
Yes, the product was totally designed and manufactured in India. We have invested 6 per cent of our total revenue in R&D. We had started work on StudyLite in October 2007 and the product was launched in January, 2009. It was a joint venture with Sankara Nethralaya who joined us in February, 2008. Sankara Netralaya gave us specifications for lighting, the optimum amount of light recommended, angle of study and tips to reduce strain on eyes. The institution even did the final testing. The product design was done by Abhijit Bansod, from Studio ABD and the engineering design was by BPL Techno Vision.
EB: Are you going to export this product? What are the marketing and distribution strategies for BPL StudyLite?
In India we have 120 distributors who are selling this product. But after we received the Red Dot award, we have started getting enquiries from Europe and the US. So, we are planning to launch online marketing by the end of June 2010 to cater to overseas enquiries. We are in talks with thinkgeek.com and amazon.com for tieups. Their BPL website is already e-commerce enabled. So StudyLite is home delivered at no additional cost within India.
The product aimed at power deprived school going kids who constitute 40 per cent of the Indian population and we targeted only 10 per cent of them initially. The strategy is to create additional products. We sold 35,000 units last year and are expecting to double the figure this year.
EB: Are you working on reducing the cost factor and selling it in rural markets as well?
For rural India, we are working on micro finance options with companies who are leaders in the field. There are two key elements in the product—the LED and battery. Technological advancements in LEDs has resulted in a higher light output for the same power consumption, that is, the lumens per watt, is constantly increasing. With this trend, the cost of the end product will progressively come down.
EB: What about the quality of LEDs?
The decay factor, indicated by a reduction in light output over the product’s life time, is critically measured through accelerated aging and ‘burn in’. LED selection becomes a critical process in our SCM chain. We carefully select our LED vendors. Being a critical element, we will progressively move towards backward integration in order to manufacture our own LEDs—from assembly and packaging, leading up to having our own chips. We are also planning to have an LED fab in Bengaluru.
EB: What are your future plans?
We will be working on two more verticals—LED luminaires and solar solutions. We are planning to introduce more LED based products. Also we will be moving from solar products to solar solutions, that is, using a single panel for multiple products instead of different panels for different products. Our future products are LED bulbs and tubes with or without power backup.