Reliance Industries Takes Control of Kelvinator Brand Under Its Flagship

In its initial plan, Reliance Industries had hoped to acquire a majority stake in both Whirlpool India and LG India. However, the group's plans have hit a roadblock.

In late June, it was reported that Reliance Industries is competing with global private equity firms like EQT Partners and Bain Capital to acquire 31% of Whirlpool India's shares.

On July 18, Outlook Business reported that Reliance Industries had announced the acquisition of Kelvinator, a home appliance brand, through its retail arm. The company will gain full control over the brand and become its owner.

This has effectively ended the takeover battle for Whirlpool India.

Reliance Industries had been hoping to break into the consumer electronics market and make a significant impact. Its "white goods" dream is becoming increasingly urgent as the Indian market continues to grow rapidly.

According to a report by KPMG and the Confederation of Indian Industry, India is expected to become the world's fourth-largest white goods market by 2025.

Ending a six-year partnership to manage LG's Kelvinator brand

The owner of the Kelvinator brand is Swedish home appliance manufacturer LG. In India, it mainly sells refrigerators, washing machines, air conditioners, and microwave ovens through its retail network.

Reliance Industries has had a long-standing relationship with LG.

In 2019, Reliance Industries signed a five-year agreement with LG to license the Kelvinator brand for manufacturing, marketing, and distribution. Since then, Reliance has been selling Kelvinator products through its extensive online and offline retail network (including Reliance Digital and Jio Stores).

Now, Reliance Industries is taking full control of the Kelvinator brand in India, hoping to make a rapid breakthrough in the white goods market.

If Reliance had chosen to create a new brand, it would have taken longer to build momentum. By acquiring Kelvinator, the company can quickly gain access to existing assets and distribution channels.

Kelvinator may be reborn

Reliance Industries is India's second-largest conglomerate after Tata Group. It has businesses spanning energy, chemicals, retail, telecommunications, biotechnology, electronics, media, finance, real estate, and more, with annual revenues exceeding $100 billion.

In the retail sector, Reliance has a dominant position. It is India's largest and fastest-growing retailer, with supermarkets, convenience stores, high-end retailers, and e-commerce platforms all under its umbrella.

By leveraging its retail channel advantages, Reliance Industries aims to revive Kelvinator.

In the past, Kelvinator was once a well-known brand in India. Its peak period was in the 1970s and 1980s, particularly with its iconic refrigerator ads featuring the slogan "The Coolest One." The company held a market share that led the industry at the time.

However, since the 1990s, with Korean brands such as Samsung and LG entering the market, Kelvinator's competitiveness has waned, and its market share has been significantly compressed. Today, it is already lagging behind Korean and Chinese brands.

The market generally believes that Reliance Industries' comprehensive coverage of India, supply chain management, logistics, and sales network will enable a significant boost in Kelvinator sales.

India's home appliances may spark a price war

Pricing is a crucial factor for Reliance Industries in its business strategy. In many areas, the company has entered the market by offering low prices to capture market share.

For instance, when Reliance launched Jio, it introduced a zero-cost strategy to break into the telecommunications industry. Free voice and 4G data services were offered for six months, resulting in a user base growth of over 1 billion, with India's data traffic prices dropping from being one of the highest globally to being one of the lowest.

Reliance Industries' approach is highly flexible and efficient. For example, it has partnered with local mom-and-pop stores to introduce community e-commerce, logistics, and no minimum order quantities. Within a few years, Jio became India's largest telecommunications operator.

The company does not seek short-term profits but aims to quickly gain market share and accumulate vast amounts of data through its retail network and user base construction. This is the best explanation for Reliance Industries' "price-for-market-share" strategy.

Now that Reliance has fully acquired Kelvinator, it will undoubtedly spark a price war in the home appliances industry, particularly in refrigerators, air conditioners, and washing machines.

Why must Reliance penetrate the home appliances market?

The rise of smart homes and IoT applications makes home appliances a core entry point for consumers. It is also an essential field for retailers to establish their dominance. With its existing strong presence in telecommunications, finance, e-commerce, energy, media, and real estate, Reliance Industries must enter the home appliances market to build its competitive advantage and create a "Make in India + Sell in India" model.

This will not only meet India's goal of developing smart manufacturing but also address the country's lack of global brands and indigenous market share.

It is envisioned that with Reliance Industries' control over Kelvinator, the Indian home appliances market will inevitably be plagued by a price war.