Do Customers Want IoT Solution?


There are 40 models of geysers sold in India and 90 per cent of them comes from the same Chinese vendor

By Srinivasa Moorthy S A

This article is slightly off beat and I am sharing my experience I had yesterday with a CEO prospect of ‘IoTfying’ his product. This meeting lasted 40 minutes but was an eye opener.

We met the CEO of a white goods company which is into electric geysers (and is a well-known brand) with a proposal for designing an Internet of Things (IoT)-enabled geyser for one of their fast-moving model. He patiently listened to what we said and started telling us his perspective of what is the market reality. For want of time, I will present what he said in the form of bullets so that you can appreciate the stark facts.

  • There are 40 models of geysers sold in India and 90 per cent of them comes from the same Chinese vendor! This vendor is so ethical that he will not offer the same model to two vendors in India.
  • Their fast-moving models are 15 litres and 25 litres with an average price of Rs 7000 for 15 Lt one (about US$ 90).
  • Most of them offer 3-year heater warranty and 7-8 years of internal vessel warranty. His experience so far (he has been in the business for more than 10 years) the warranty replacements are less than 2 per cent (something which most Chinese vendor agree, basically if you order 100 units they will supply 102 units)
  • Most homes are moving into hiding the geyser into false ceiling and no geyser will be visible. He, in fact, asked what the point is in giving a display when you can’t see it.
  • Our other pitch was that you can measure the power consumed and he said the standard government of India (GoI) has laid out for a geyser assumes 22 degree C as the minimum but practically the geyser normally faces temperature of 20 degrees C. He says if you show the real power consumed it is going make the customer worried and will start questioning you. So he suggested what Steve Jobs said ‘Customers don’t know what they want’ and you have to tell them what they need!
  • Just to validate his experience he called the largest retailer in the city and asked him how many IoT-enabled geysers of the competitor he has sold. The retailer told one that’s all. His take what is the value the customer gets for price which is double of the normal geyser is nothing, so it is just a hype. Believe me this distributor in the peak season sell 40K to 50K geysers per month.
  • In fact, if you extend this for other white goods products the reasons may sound the same. Comically what he asked us was to design another feature which has no IoT in it but promised us he will sell 10000 of them every month!
  • Correlating this my interactions with other prospects I realise what we think (as engineers!) as a big value add need to make the customer feel the same if not, he is not going to buy it.

When I meet so many young engineers with products and product ideas which are very close to their heart just fail to click with the end users. On contrary I am now helping a start up into Pet monitoring I was surprised to see customers were willing to pay Rs 1500 (about US$ 20) per month. What it goes to show is that your product/idea will not succeed even if it good unless customer find value for what you offer!

Srinivasa Moorthy S A is the Chief Executive Officer of the Andhra Pradesh Electronics & IT Agency. He has over 30 years of experience in the IT industry as Head, Leader & Technocrat in the Electronic Product Design & Engineering Services.


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