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Kent RO Expects 22% Of Growth In Revenue In 2018
In an interview with BW Businessworld, Kent RO's Mahesh Gupta spoke about his future plans with the company
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Dr Mahesh Gupta - the founder of Kent RO Systems has the distinct credit to shape up India's unorganized Water Purifier market to a fastest growing over Rs 3500 crore industries. In an interview with BW Businessworld, Gupta spoke about his future plans with the company.
Brief us about new developments and the expansion plans of Kent RO?
KENT RO Systems, not only plans to take its flagship products overseas, but it has also moved into newer categories in the domestic markets, with products such as air purifiers, Vegetable & fruit purifiers, Vacuum Cleaners, Bed Cleaners, Show Sole Cleaners and Kitchen Appliances to sustain its growth momentum.
The company has recently entered into GCC Markets. People in Dubai prefer drinking bottled water, due to taste and purity concerns of tap water. However, the consuming bottled water is not convenient, as women find it difficult to lift and install the bulky 20-litre cans on water vending machines. Moreover, it is costly to purchase bottled water as well. Here, our purifiers are compact and convenient and purify tap water to better than bottled water quality, at a very low cost. Besides being economical and convenient, purifying tap water at home using our system, is much safer as compared to bottled water, and is tasty also.
The brand's wide range of household appliances will be available at LuLu Hypermarkets. The company has joined hands with UAE's Sands International for the distribution of its products across the GCC. The move is a part of the company's broader expansion plans into the Middle East and North Africa (Mena) in the next few years. Recent research indicates that the region`s demand for water purifiers is growing at more than 7 per cent per annum and the market could reach nearly half a billion dollars by 2020. We have been steadily expanding into the international markets. Kent's association with Sands International and LuLu Hypermarkets will kick-start a new business era for us in the GCC market.
Exports: Apart from expanding its presence in India, Kent has managed to establish its foothold in neighbouring countries such as Nepal, Bangladesh, and Sri Lanka with exports contributing 10% to its revenue. We are doing business with 12 countries and looking to double our exports in next two years.
Manufacturing Facility & Capacity: Overseeing the setting up of our new manufacturing facility in Noida, the company is preparing for future. The company already has a facility in Roorkee to make 5,00,000 RO units annually and 5,00,000 gravity based water purifiers running on a single shift, yet it has chosen to invest in another Greenfield facility near Noida, when a scale up in production could have been affected by simply extending the shift at the existing plant. It has taken us 18 years to grow the overall market to 3500 crore but the penetration levels are still at 2-3percent. Once we cross 4%, I believe the growth will be exponential. Investment in the new facility, which is expected to be operational by next year 2018, is expected to cost the company about Rs.100 crore.
To showcase its wide product range, Kent has set up its Experience Centres in Noida's DLF mall and Lajpat Nagar this year. The centre will allow consumers to experience Kent's products and its features through live demonstrations. The company plans to take their numbers to 100 by 2018.
How much profitable is your other products apart from water purifier?
Not resting solely on the water purifiers, KENT RO is adding other categories as well. We plan to introduce 3-4 new products across categories every year. The company has introduced products like Air Purifiers, Bed Cleaners, Vaccum Cleaners, and Cold Pressed Juicers in its portfolio in last one year. Recently, we forayed into Small Kitchen Appliance Segment calling it a Smart Chef Range. We launched innovative products like Vegetable Cleaners, KENT Noodle & Pasta Maker with which you can prepare healthy noodles at home, KENT Turbo Blender, Kent Pizza & Omellete Maker, Kent Chilla Maker, Kent personal Rice Cooker, Atta Maker. We have come out with the appliances which are easy to cook healthy food. We are constantly extending our portfolio focusing on health and hygiene that's why we call KENT - A House of Purity. With our range of products we plan to change the way people cook in the country today. In terms of contribution it is very marginal but it is required in the kitchen.
For instance, the market for cold pressed juicers and vegetable purifiers has not picked up. And I am not looking at the market size. I am looking more at introducing this new segment and slowly the market will be created. As we believe that these products are ahead of their times and whenever they catch the consumer attention; the company will be ready with the products.
We are not working on any set target for the products other than water purifiers; I would love to see it contribute about 10% in a year's time. A good 85% of the company's revenue is contributed by water purifiers. Right now, non-water purifiers contribute around 7% of overall revenue.
Brief us about your marketing strategies.
We are taking a 360 degree media approach for the campaign and launched it in print, electronic as well as digital. Our purpose is to reach out to as many consumers as we can with valuable information. With Hema Malini as the face of the company, it has been made easier for the company to be recognized as our customers recall us through her face. We will be spending at least Rs. 10 crores in marketing & branding of this new range.
Further company's focus would be more on digital marketing. Recently, we launched a digital campaign that has outsmarted the competition for visibility in no time! Going viral with more than 15 million views in not more than two weeks and thousands of shares, comments and likes on Facebook and Instagram, KENT has made the eyebrows of many digital medium users raise in utter surprise and pleasure. This is the first time when the brand has launched a digital marketing campaign.
In the present day market, the digital platform is the sole marketing medium that has wide reach. And after the huge success of our first campaign we plan to come up with 4-5 more ad campaigns on digital platform. With 12-14% of its turnover spent on advertisements, Kent has the highest marketing spend in the industry. While the ads gave Kent considerable brand recall, the company has also worked on improving its reach.
Currently, Kent has around 12,000 retail outlets, 3,000 distributors and 500 direct marketing franchises across the country. The company, which is present in almost all 600 districts across the country, follows a strategy of building its distribution and servicing network before entering a new city or town.
Q4. How do you plan to compete with other brands?
We plan our products which give benefit of health and which are nonexistent. We don't want to go into competitive space as we are not here to say "Me Too" products. Somebody else is manufacturing the same product and introducing the replica is not our chemistry. We will continue to research and come up with unique products.
What differentiates us as the top brand is our focus on innovation and technology. We have not come with appliances which are commonly architecture by the manufacturer. Our appliances are totally innovative and different. None of our product is competing with anyone except rice cookers. We have aesthetic and technical differentiation and unbeatable quality. For instance, Cold Pressed Juicers are not conventional Juicers. These are the juicers which used technology that first crushes and then presses the fruits and vegetables for maximum yield. The juice extraction technique works on low RMP, SPEED LESS THAN 100 and so it does not produce as much heat as produced by conventional juicers. Hence, it retains nutrients and fibers and gives more juice.
Brief us about your revenue forecast and in numbers what is your expectation for the coming year?
Kent RO today enjoys 35% market share in RO Space and, last year, it sold 1 million water purifiers, clocking a revenue of 780 crore (FY17). The company is hoping to close the current financial year (FY18) with a revenue of 950 crore, a 22% growth over the previous year.