Hansgrohe group sees India among its top-5 strategic markets in 5 years

Among the top ten currently, India plans include local production and acquisitions, says global CEO Hans Juergen Kalmbach

The $1.35-billion Hansgrohe group, a German luxury home fittings maker, is targeting acquisitions in India as well as manufacturing some of its products in the country, the company’s global chief executive officer (global CEO) Hans Juergen Kalmbach told Business Standard.

Hansgrohe, which imports all of its products into India right now, counts the country among its top-10 markets globally in terms of sales. 

This development happened recently as the company has tripled its business over the last two years, Kalmbach said. The company follows a January-December accounting calendar.

The India business now contributes around 10 per cent to global revenues, according to industry experts. And, the potential for growth remains strong amid rising aspirations among consumers, notably in smaller towns and cities, where players such as Hansgrohe are expanding quickly, they said.

“India remains among the fastest-growing markets for us,” Kalmbach, who took over as global CEO in 2018, said. “We remain ambitious about the India market and are investing for the future here. We see India in our top-five strategic markets in the next 3-5 years,” he said.

On a week-long visit to India after three years, Kalmbach opened a flagship store in Mumbai on Tuesday.

He will be visiting cities such as Pune, Bengaluru and Delhi over the next few days, meeting commercial partners and employees as well as taking time out for market visits.

The company has 142 franchisee-led outlets in 58 cities across the country, Kalmbach said. This number is expected to touch 300 stores in the next three-five years.

Hansgrohe competes with players such as Roca, Jaquar and Kohler in India. If local manufacturing takes off in the next few years, it will allow Hansgrohe to be accessible to a larger set of consumers, he said.

Currently, prices for bath and kitchen fittings of the company vary between Rs 30,000 and Rs 35,000 a unit at the lower end. It goes up to Rs 2 lakh and above at the upper end.

Acquisitions are expected to help the company fill crucial gaps in its portfolio, which include mainly two brands – Axor (in the luxury segment) and Hansgrohe in the premium segment. The company may use the acquisition route to get into the volume segment as it seeks to step up sales in the country.  

Manufacturing plans are also expected to help India emerge as a crucial hub in the South Asian region for Hansgrohe, Kalmbach added. At the moment, the company manufactures most of its products in its home market Germany. Some other markets where it has a manufacturing base include China, France and the US. These are also among Hansgrohe’s top-four markets globally in terms of sales.

While the UK is Hansgrohe’s fifth-largest market in terms of sales, inflation concerns and uncertainties around the economy are forcing households to trim budgets, thereby hurting sales, Kalmbach said.

India, on the other hand, is likely to grow at a compound annual growth rate (CAGR) of around 30 per cent for Hansgrohe over the next few years, Kalmbach said. This has prompted the company to devote greater attention here, he added.