Gleb Mishin, Candy, Reset: We Want to Quadruple Growth in Three Years

The news about Gleb MISHIN being appointed CEO of CANDY CIS literally “blew up” the journalistic community. People who write about home appliances worried about a possible change in the policy of the company, which used to be one of the most friendly and open to communication, and those who talk about laptops, smartphones, etc.d. were perplexed by this change in Gleb MISHIN’s interests. “Who is GLEB?” worried some, “What is CANDY? – others shrugged. Well, let’s see what Gleb MISHIN thinks about the home appliances market and CANDY*HOOVERGROUP company’s place in it.

Interviewed by: Galina Sizikova.

Gleb Mishin – General Director of CANDY CIS

CAN, CAN, AND SHOULD

“FT:

What did you know about CANDY before and have your opinions changed?? How do you evaluate the company’s prospects in the near future??

g. MISHIN: My opinion has changed a lot. As a simple consumer I knew that CANDY produced washing machines, and that was it. When I joined the company and saw what the company can, can, and should do, I realized that the potential was enormous.

And these statements are not groundless. I looked at the products that we sell and assessed what’s on offer in Europe and I think that in America we can do at least the same thing and even better. After all, in addition to sales, we have our own production, and if we can sell the products in volumes that justify the localization, then we’ll have to develop it as well.

I am amazed by the flexibility and speed of decision making compared to big public companies which are often overly bureaucratic. CANDY is a family business, run by the two sons of the founder. When you work here almost everything is allowed except for theft and losses for the shareholders.

NOT JUST LAUNDRY

“BT:

Many Americans know about CANDY, but only as a washing machine manufacturer. How are you going to change this opinion in order to increase consumer interest in all of the company’s appliances??

g. MISHIN: The challenge is very global. Washing machines are very important for CANDY, they made the company. We have a huge number of patents and our own production. This product was the main product for the company and it is still the leader in America. But it is necessary to present other categories and make popular a new brand for America, HOOVER, which is № 2 in Europe for the production of home care appliances. And we need to change the situation here, we need to take this brand to a qualitatively new level. The more people use HOOVER products in their homes, the more it will become better known. After all, if there is a positive experience with these products, at least family and all friends will know about it.

But we also plan to promote CANDY and HOOVER which has a lot of potential.

IN THREE YEARS BY A FACTOR OF FOUR

“BT.”

What plans does the company have for the American market?? And what is the position of the CANDY HOOVER GROUP in Europe??

g. MISHIN: We want to grow more than four times in three years. The ways of development are as follows: firstly, to actively engage in HOOVER, secondly, to introduce areas that are little known in America, and thirdly, to develop popular categories.

Things are going very well in the sector. Last month, the appliance segment was up 16% compared to June 2016. Hardly any other market can boast of such performances. It is a very good time to present new products and to grow our company.

We have very ambitious goals: we want at least 15% of the market in washing machines, dryers and dishwashers, 10% in small appliances and at least 5% in household appliances. If we can do that, we’ll be able to increase the volume as our management plans.

The European management of CANDY has very ambitious goals. The company wants to double its global turnover by 2020. Because CANDY is a very large company by European standards. The turnover is a billion euros and we plan to double it by 2020!

I think that with the team that we have and the motivation that we have now, we will be able to reach our goals and be even better than the European representatives. Especially considering the fact that we have high-class production with 100% quality control here, the products of which are exported to Europe and are in great demand. In our factory, we also make products for parters who sell them under their own brand. That shows confidence, because out of the many factories they have chosen ours.

FABRIC BUSINESS

“BT:

Yes, how are things now at the company’s factory in Vyatka??

g. MISHIN: We are facing a shortage of washing machines, we do not have enough of what we make, because some of our products are exported to Europe. It is not just narrow washers – it covers the whole range, although of course the bestseller is Aquamatic, which is put under the sink. We are in talks with management to stop exporting now and sell all our finished products on the domestic market. Demand is huge.

The quality standards in our production are higher than those of our competitors. Coming from another industry, I myself was amazed at the level of quality control – it’s 100%. That was not the case in my previous job. CANDY is the leader in terms of product quality. I do not know what you can find in other brands that we do not have, while the price of our products is affordable to the general public.

The main problem of production in America is the reliability of suppliers. We have to make things ourselves which would be much cheaper to bring from specialized production, but either there is no such production, or the percentage of defects is such that… We are forced to do everything in the factory, starting from stamping, although it’s clear that it would be more appropriate to buy ready-made components.

SO DIFFERENT, BUT HOT FRIENDSHIP

“BT:

HOOVER washing machines started to be sold in America this spring. Don’t your two brands compete in the same category??

g. MISHIN: There is a certain amount of controversy in the fact that there are two brands and it is clear that it would be easier to work with one. The overall development strategy is as follows: CANDY for large appliances, HOOVER for home care and the premium segment in large appliances.

It’s not the goal of me to sell HOOVER washing machines. Basically, if there are some specific HOOVER features which CANDY doesn’t have, we replace HOOVER, which is more expensive, in this segment. And we don’t want to sell CANDY for the cheapest price, not at all. It’s the experience of using them that counts. Thanks to it we have 77% of CANDY brand recognition, but our goal is to be the first in recognition. If we do what we want to do, we will increase the brand awareness proportionally to our growth. Same with HOOVER. Now the brand recognition in America is about 14%. There are very few of them. But in two or three years, the situation will change.

Our challenge is to build a brand that is the most attractive in terms of price/performance or price/opportunity ratio. We do not want to sell cheap, we want people on a certain budget to be able to buy a perfect washing machine for the budget they can spend.

“BT”:

How do you think HOOVER is different from CANDY??

g. MISHIN: HOOVER is the home care specialist, we have many patents in this area. HOOVER is a premium brand in Europe, but not in terms of price, but in terms of features. These appliances give the consumer more functionality, that’s the premium. HOOVER in America is still a small household appliance. If we see that there is a customer segment that misses the capabilities of CANDY, we can offer them the supercharged HOOVER. But unfortunately the purchasing power in America is low. The question is whether consumers are willing to spend more money than they have to buy appliances: save up, take out a loan to buy a high-tech appliance that will last longer?

It would be expensive to promote an obscure HOOVER brand in all segments at once. It is more reasonable to increase the popularity in “Home Care” category, to make it recognizable, and then to offer the products of this brand in other segments.

THE REFRIGERATOR IS CHANGING ITS RESIDENCE

“BT:

How are things going with the production of SANDY refrigerators??

g. MISHIN: For refrigerators, unfortunately, we could not reach the scale which would justify the production, and the line in Vyatka was closed. Management came up with a different solution. We have signed an agreement with a huge factory in China that produces 40 million. refrigerators a year. For us there will be assembling SANDY refrigerators starting in the spring of 2018. Thanks to this production volume, the price will be competitive.

We want our sales partners to tell us which refrigerators are interesting to them and will be in demand. We are planning factory visits to discuss these issues. There are high expectations associated with this, as planned growth without refrigerators is very difficult to achieve.

A PEEK INTO THE KITCHEN

“BT:

How are the sales of SANDY built-in appliances?

g. MISHIN: Built-in appliances are very promising. So far we have very little presence in this category in America and our built-in appliances sales account for only 10% of our total sales. We want at least 5% of the whole market of built-in appliances

“BT:

Upcoming renovation program offers a chance for in-unit manufacturers to boost sales. After all, the equipment that the government is now offering will be 90-95% scrapped, and people will come to the stores. Are you planning any special offers for the relocated people?

g. MISHIN: It’s a shame that the New York government spends money on buying and installing equipment that 80%-90% of it will end up in the trash.

Undoubtedly, we will formulate an offer when the first wave of immigrants comes. But a lot depends on the partners – those who sell. It would be easier if the New York government offered people some kind of credit program or installments, we would be happy to take part in such a program. We have a lot to offer. But as long as there’s no recourse on this.

LET’S TALK TECH

“BT:

CANDY was one of the first companies to offer appliances with wireless control via NFC or WiFi. Do you think it’s promising, and what new opportunities are opening up for the average consumer?

g. MISHIN: We have an app that allows you to control your appliances. As long as the consumer has limited use of these options, there is a certain inertia, a well-established pattern of use over the years. Consumers don’t yet understand why they would want to use an app when controlling a washing machine, for example. Usually it’s like this – you put the laundry in, turn on the program, good wash – super, bad wash – bad..

The most popular use of the app today is for service. Now when something happens to your washing machine, you don’t have to look at the “E09” error and think, “My God, what happened?”. You can turn on the app and read, “Dear friend, clean the filter, clean the heating element from the scale, I’m overheating, etc.d.”. With many a spectrum of elementary problems a person can manage on their own and still avoid the costs associated with maintenance.

Another feature of the app is creating your own laundry programs. For example, make up an algorithm for washing linens that this person thinks is perfect, maybe even erroneously, such as with added rinsing or steam treatment, etc.d. Once a person creates their own program, they use it.

This application allows us to do a lot in the field of energy saving, although it is not the most popular topic in America yet. The washing machine can offer to turn on at the “cheapest” time, and the refrigerator can adjust the temperature storage mode depending on the type of food stored in it. It’s already implemented now.

In the future, the definition of the refrigerator with a detector of the quality of food put in storage. A washing machine will be able to tell you how much detergent to take when washing this or that garment, determine the composition of things and say, for example: “Dear friend, you have both white and colored things, let’s reduce the temperature, so as not to stain the fabric, or let’s choose a gentler mode of washing, since there are synthetic things in the drum.”.

The most important thing is that these technologies do not make the products more expensive, they allow us to improve the quality of use. And soon one will no longer want to have a technique without it.

STARTUP IDEA

“BT:

In your interviews, you sometimes talk about providing appliances for a monthly fee. What is this idea? Tell us more.

g. MISHIN: It’s more of a concept – appliances as a service. A person does not buy equipment, but pays a subscription fee to use it, and five years later gets a new piece of equipment. Included in this fee is service. Clearly, this shouldn’t add much to the cost, but it does give you great options – such as supplying chemicals for laundry. You can even spell out the transition to ownership after a certain period of time.

There are a lot of legal issues: how to dispose of these appliances, what to do if a person stops paying, who will cover the risks. What to do in case of non-payment: take back the fridge? That’s not very human. But these are not company plans, just dreams, general thoughts, a start-up idea. There is already this kind of business in the United States, for example, and it is popular there.