Kohler, the Wisconsin (US) based plumbing company which entered India in 2006 has invested more than $100 million ( Rs 500 crore) in the country so far. While the company is a player in the furniture and tiles business in the US, in India the focus will be on the ‘premium’ bath fittings market and the kitchen segment. Kohler India MD Salil Sadanandan shares some insights with Preeti Khicha. Edited excerpts:
How have the shopping habits of Indians changed when it comes to purchasing bath related products?
The shopping habits, particularly in urban India is evolving. Earlier the focus used to be what is outside the house (example a car), then it became what is inside the house (living room) but now consumers are graduating into making bathrooms and kitchens that they can be proud of. Bathroom designs are moving from being purely utilitarian to something more pleasurable.
In the Rs 4000 crore bath fittings market, which segments do you dominate? Any skews by region?
We want to play only in the premium end of the market, which is the top 15 per cent of the overall market. Almost 100 per cent of our India turnover comes from bath related products. We launched the kitchen range a couple of years ago but that segment operates on a project basis. We source the products from China and don’t have a manufacturing facility in India for our kitchen range. Bulk of our sales (close to 75 per cent) is in the top 10 metros. We have 120 stores in 60 cities but now we want to scale that up.
What is the split of sales between the B2B and B2C market?
Currently, the B2B space dominates 75 per cent of our sales and that is where the fresh demand is coming. Growth in commercial as well as residential spaces is fueling the demand. The balance comes from consumer, but that is the segment which will explode in the next 5-10 years, and a bulk of this will be driven by the replacement market.
There has been some slowdown in the real estate market. How much has this affected your business?
It will have an impact in the short-term but we have a long-term view for India. In the next ten years, the real estate business will boom creating enormous opportunity.
In the last few years, you have launched some products at attractive price points. Going forward, what will be your strategy in terms of pricing?
In terms of value proposition, we target the luxury segment and the top end of the mass segment where we believe the conversion will happen. Want to populate both these segments, so we have products starting from Rs 4000 all the way up to Rs 6.5 lakh (hi-tech bathroom). We want to differentiate in the premium segment using innovative technology and materials and at the mid-premium segment through design differences.
More From This Section
Does competition from players like Duravit, Villeroy and Boch, Hansgrohe, Roca, Toto - all operating in the premium end - worry you?
Our view is that with so many players coming into that segment, the market will grow. Indian brands like CERA, Jaguar and Hindustan Sanityware still dominate the market, but as consumer aspirations increase, the premium segment will grow twice the rate of the market.
Have you done any localised products for India?
Many of the products for India are engineered to work in low water pressure conditions to give the same performance. We also have to take into account factors like hard water and salt content in coastal areas while designing our products.
Which are your top five markets for Kohler?
We are not allowed to reveal that as we are a privately held company
You have a manufacturing facility in Jhagadia (Gujarat). Is everything sold in India manufactured in India?
Over a period of time, we will increase the percentage of products that are manufactured and sold in India. Right now it is 50 percent. We also export some of the products which are made in India to other markets. We have an installed capacity of 2 million for ceramic products and 1 million for faucets.
Kohler is a family business. How much involvement is there from the Kohler family?
It is run by professionals but since you see the family name on the products, the Kohler family is passionate about the business. The four Kohlers in the business are involved in the design of every product introduced in the market.
