We intend to invest about 100 crores this year: K E Ranganathan
In an exclusive interaction with K E Ranganathan, MD, Roca Bathroom Products Pvt Ltd highlights the growth plans of the organization.BY Shipra Srivastava | March 10, 2017 | comments ( 0 ) |
K E Ranganathan
How do you see current sanitary ware market is growing in India? What would be the market share of Roca as well as Parryware in overall market?
Indian sanitary ware market has been growing steadily in the last few years. In the context of the market, this growth is different for different segments. The divide between the unorganized and organized players is also huge with unorganised sector contributing over 60% in volume terms. From the consumer angle, the market is split in terms of Institutional customers (65%) and retail customers (35%). The higher growth in new construction in the form of residential homes & office complexes/commercial establishments is driving the sanitary ware consumption.
Today, we (Roca India) contribute 8 percent of the global turnover and definitely, India would be growing higher than other global markets. With 15-20 percent CAGR in four years, we should double our revenue and would be 12-13 percent of global turnover.
In India, Roca's revenue is Rs 1,000 crore whereas the share of the Parryware brand is around Rs 750 crore. Parryware, positioned as a mass premium product, has 30 percent market share; Roca in the premium segment – has 35 percent share, Armani and Laufen have 50 percent share and in the budget category, Johnson Pedder has 5 per cent.
Kindly highlight your distribution network for both these brands? Also what is your strategy to increase the distribution for these two brands?
We have a strong distribution network across India. We have about 200 stores for Roca and we will expand to 300 stores in two years. Parryware is sold through 7500 outlets of dealers and retailers and an exclusive Display studio in Gurugram, Delhi NCR. Also, recently, we have introduced a novel concept of shop in shop in the category across India in tie-up with Home Town.
Apart from domestic sales, export will be a key focus. We have already started shipping our range of taps and fittings to Europe and other sanitary ware products to Australia and are expecting a huge order from the UK.
Shed light your strategy on exclusive brand outlets for these brands? Also mention your current footprint?
Currently, the sales are based on the product price available at outlets. Demonetisation has affected unbranded sanitary ware makers which in turn offers an opportunity for organised players. There are around 25,000 sanitaryware outlets selling unbranded products out of which around 10,000 outlets are potential points for selling Parryware branded products.
We plan to redefine the sanitaryware buying experience for the customers in our outlets. Currently, we have an exclusive Display studio for Parryware in Gurugram. Moving forward, every year, we would open studios in two key metros. We have identified 10 cities where we would have these studios in 2-3 years.
Are you exploring any new brand to improve your brand portfolio? Also, have you collaborated (or plan to) with any realty developer for your range installation in new apartments?
Roca in India is present in all the segments of the Rs 2,000 crore Indian sanitaryware market -- luxury (Armani Roca, Laufen), premium (Roca, Johnsson Suisse), mass premium (Parryware) and budget (Johnson Pedder). We work closely with Roca Group headquarters in Spain to bring to India many of the best practices of Roca group. Over the years Roca has collaborated with many designers, and constantly given the consumers novel bathroom space solutions.
We will be exploring new brands to add to our kitty. We have previously done a huge collaboration with ‘The World Towers’ by Lodha Group in Mumbai. Our other key projects include Nimbus in Noida, Eden Park in Chennai, Jain Housing in Hyderabad, B.D. Shirke in Pune.
Kindly highlight your marketing strategy?
India is eventually emerging as a huge market for real estate business and the driving winds are favourable for bathroom ware brands offering innovative products and designs in the market. With a total capacity of four million pieces, we are working on plans to double our global sales in the next four years to Rs 2,000 crore, driven mainly by new product launches supported by strong R&D, brand introduction and exports to other geographies.
Our biggest challenge here is to change the perception of Indians towards bathroom spaces, exponentially. With affordable pricing, high quality and user-friendly designs, we aim to bring about the change in Indian mindset, however, marketing also has a key role to play.
For Roca, the new communication meets this challenge by addressing the new role of bathrooms in the consumers’ life, thereby establishing the brand as premium and experiential.
We also work very closely with Architects. One case in point is the Roca Think Turf, a knowledge sharing platform where ideas and opinions are exchanged on the future of design with leading architects.
For brands such as Parryware, which enjoy strong brand loyalty amongst consumers, the approach is different – the focus is to strengthen its reach and availability, hence retail takes priority. A lot of investments are being made to create pull with retailers as well as plumbers through schemes, offers, training programmes.
Which is your best performing category across the brands?
We, at Roca Bathrooms Products, have a range of products for all the categories of customers ranging from affordable to luxury given our vast brand portfolio. We are delighted to give Indian consumers an exposure to world-class bathroom products to enhance their standard of living.
Roca’s Smart Toilets are a successful range of electronic toilets available with our In-wash technology. The designs are iconic, are every product has state of the art features and functions promising immense comfort and hygiene. One of the most advanced smart toilets from Roca, Alba, integrates Soft-Air Vortex Technology, In-Tank and Rimless Technology, ensuring maximum flushing performance. Its pressure jet siphon makes it the most advanced WC by Roca giving a new name to wellness and efficiency.
Following the parent group, Roca’s philosophy, the expertise and revolutionary R&D technology along with the trust on brand Parryware prove to be a potent force - equipped with leading infrastructure. With more than 60 year heritage, Parryware continues to create technologically innovative and eco-friendly products for the sustainable development of smart cities. Parryware’s green and technologically advanced products ranging from Green Faucets, Green Toilets, Cisterns and Dual Flushing system are well appreciated for making buildings more efficient in their use of energy and water.
Sanitary ware is highly fragmented market in India with larger share of unorganised players, so what kind of challenges you faced while working with distributors?
Distributors even today are traders focussing on working capital, price and discounts. They do not focus on creating a value proposition for customers, and that becomes a big challenge for us. Given the changing nature of the business environment, they need to shift focus to creating customer satisfaction, improving the experience and strengthening recommendations.
Who do you think as your competition in the same space?
We believe that our presence across the budget, mass premium, premium and luxury categories through various brands provides a definitive edge over competition to sustain a strong growth. In most of the segments, it claims number one or two position in the country.
Even though today competition is stiff, no other company has a strong brand portfolio as us.
Other brands maybe able to give us competition in one or two segments, however, our vast brand portfolio gives us a firm footing in the category like no other.
At last, kindly mention your growth plans?
As part of future plans, we intend to invest about 100 crores this year. To tap the growing luxury segment, we will be introducing more brands in the Indian market, in addition to the existing 60 worldwide. Government’s initiative, Make in India is a reality for us. We are winning orders to produce in India as well as to export to many other countries.
55% of the company’s revenue comes from the top 10 cities in India and we are expecting the ratio of the rest of the country to go up slightly. The Indian market is expected to grow at 15 percent and rest of the growth would come from shipping goods to global markets. We are aiming to increase our exports from Indian unit to new territories such as Australia, Europe where there is a huge demand.
24 Nov 2015, Hotel Pullman, Aerocity, New Delhi.
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