In conversation with Dr. Mahesh Gupta, Chairman, KENT RO Systems Ltd, who spoke about the water purifying industry and the newly launched range.
The leading water purifier company Kent RO Systems has recently launched its range of air purifiers. On water purifier industry, Dr. Mahesh Gupta, Chairman of KENT RO Systems Ltd says that even after having worked hard to build the water purifier industry for close to 18 years, he found that barely 2.5% of the population has a water purifier at home. We spoke much more to him on the industry he rules and beyond.
What was the need to launch air purifier? Where all are you planning to spread your network?
High emissions of harmful particulate matter have forced people and organisations like us to look for ways to mitigate the impact of indoor and outdoor pollution on human health. Seeing the opportunity we ventured into ‘air purifiers’ category as well. We consider ourselves as a ‘house of purity’ and have embarked on a journey to develop innovative solutions for pure and healthy living. We are already into water purifiers and thus keeping the business synergy in mind and with a view to help people have pure air, we decided to enter a new business segment – air purifiers. The logic was simple – all of us want pure water and pure air – and hence the business proposition to enter into this segment was very much in coherence with our mission. More so there is synergy in terms of production, sales, and most importantly, need. There is no well defined market size; the air purifier market in India is still in its infancy. Air purifier is a new concept product which people are trying to understand. As far as Kent RO Systems is concerned, we are not looking at market share. We are not looking at what numbers we’ll get. This is an evolving market and it will take four to five years for it to settle and then probably we can have a clearer picture. Till the time consumer awareness builds up and they start picking up the products, we will keep informing them about the benefits of the product and also about our presence in this segment.
Tell us about your distribution model
Kent has the strongest distribution network, amongst the water purifier companies in India. Kent sells its products through various distribution channels – Retail chains, Modern Trade outlets, CSD & Police canteen, corporate tie ups, Direct door to door marketing and E-commerce. The retail presence of brand Kent is phenomenal. Kent is present at around 12,000 retail outlets Pan India and has 3000 distributors, 300 Direct Marketing executive and a sales force of around 1500 sales persons. Most importantly Kent has a state of the art CRM based centralised call centre and Service centres which service 19,000 pic codes. We have also set up our Experience Centres, where the customers can experience the innovative products offered by us.
How careful are you while selecting your distribution partners?
You want our customers to receive the best possible service. That's not easy when you are dealing with customers through a third-party distribution channel. If you sell high-value, complex products to business customers, you need sales people with good product knowledge and the ability to build relationships with customers. A direct sales force may be the right solution if your customer base is small. If you have a large group of business customers in and around the country, look for a distributor network selling similar products. They will have the skills and knowledge to sell your products, particularly if you provide their sales team with product training. Our product is not a commodity which can be sold on the shelf. That’s why we are very choosy in selecting the right partner.
Tell us about your expansion plans for 2017-18
Riding on its success, the firm has grown into Rs 800 crore company and is consistently growing by 15% Year on Year. Kent RO presently has two manufacturing units at Roorkee in Uttarakhand, having capacity to roll out 6,00,000 RO water purifiers in a year. With an investment of 100 crores, the company is readying up a new manufacturing plant in Greater Noida with a similar production capacity. The plant will be commissioned in 2018. Recently, the company has also forayed into Small Kitchen Appliance segment with the launch of innovative product including Kent Noodle & Pasta Maker, KENT Turbo Blender with 300 RMP, Dough Maker, Rice Cookers, Dosa Chila Makers, bread maker; and soup makers etc. You will get to see more innovations coming right from the House of Purity.
Tell us about your industry in India? How’s it progressing in India?
The present market size of water purifiers is estimated to be around Rs. 3500 crore and constitutes of 3 major segments – RO, UV and Gravity water purifiers. The market for water purifiers today has seen a remarkable growth globally amid the acute shortage of clean drinking water that is posing a big challenge to many countries. Given the increasing awareness, and largely untapped market potential, the sector is growing at a CAGR of around 25 percent. According to TechSci report, RO water purifier is the largest segment accounting for 42 percent of the market in 2011, while offline water purifiers contributed for about 20 percent of the market. Kent is the market leader in its RO water purifier category and commands a market share of 35% in RO Water Purifier Category.
What are your thoughts on franchising as a business model?
Franchising is a successful business model to follow. We are also coming up with a chain of 10 experience centres which will be on franchise model. We have launched many items which are innovative in nature like smart chef cooking appliances and I have large number of products which are innovative in nature. Now these products are not promoted by the normal retailers. They cannot keep the whole product range on shelves. So, it was a wise idea to come up with company's experience zones where consumers can come and have the look and feel of the whole product range of KENT. They will come in the rented premises / franchise model. We have opened 2 stores, one in DLF Mall of India and another in Lajpat Nagar Market and have put all the company's investment. Our investment is Rs 20 lakh per store and some would come where the franchisee would invest equally and we will only be supplying the products for sales. And then the investments from the company side are expected to be Rs 10 lakh and the balance would be put up by the franchisee.
What are the major challenges for you and how do you plan to overcome them?
It is very difficult to change the mindset and behaviour of customers. Even after having worked hard to build the water purifier industry for close to 18 years, we find that barely 2.5% of the population has a water purifier at home. Creating awareness is one thing; getting them to buy it is another. However, the positive side is that gradually the consumer behaviour is changing; disposable income and availability of information is certainly changing the scenario.