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What is the size of the bathroom fittings market in India and what has been the growth rate? How much is Grohe’s share currently?
According to our estimates, the bathroom fittings market in India is about Rs2000 crore. Of course, we believe that it has not grown up to its true potential and it should be twice that size. The reason why it is not of that size is because the industry hasn’t really reached out to the customers. The customers are not fully aware about what’s possible and what is available. Even a market like Australia is as big as India in terms of consumption despite that country’s population being just about two crore. People here are used to live with the same fittings for 30-40 years. The fact that there are better things available and you can have the bathroom fittings that you need is not been communicated properly.

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COMMENT Comment on this article

We operate in a very small segment of the market – the high end. In that segment we have a 13% market share. We have actually grown from about 2-3% two years back to 13% last year. We believe we are the single largest bathroom fittings international brand in India in terms of sales.

Who are your key competitors?
There are two answers to this question. Firstly, we believe that our competition is with all the leading high-end brands occupying people’s mindshare – be it BMW, Honda, Sony or Panasonic. We are competing with the fact that people’s minds are not occupied enough with the concept of enjoying water. That’s our biggest challenge. When consumers start thinking more about enjoying water as much as about enjoying music over a high-end music system or enjoying a drive in a luxury car, automatically our business will double.
In terms of segment competition, Jaquar really is the competition. We are number one in almost every major market that we operate in but Jaquar is number one in India. So obviously they are our target. If we are not aiming to be number one in India then we shouldn’t be here.
We would probably never operate at the lowest end of the market. So we would be operating in a smaller space. But we want to be number one in that space.

How has the slowdown impacted Grohe’s business?
Honestly, we have actually not seen any effect of the slowdown on our Indian business. In the first six months of this year, we have actually grown at 70% over last year. We are heading towards Rs400 crore by 2012.
To give you an idea, currently our staff strength is about 75 and there have been no layoffs. In fact, we are hiring. When I joined Grohe two years ago, our staff strength was 18. About 50 have been added in the last 8-9 months.
Coming back to the market, what we have seen is that people who were exposed to the large builder segment - the DLFs and the Unitechs - have been hurt but people who focussed on retail and individual home owners have seen absolutely no loss. We have seen some delays in the hotel industry in a couple of cases mainly due to technical issues but no major slowdowns there. And as far as the high-end apartment projects are concerned, we have seen no impact at all.
Even though the overall footfalls in our showrooms have slowed down, 90% of them are serious buyers. Consumers are spending more time before making any buying decisions and this is helping a brand like Grohe because we believe the more time consumers spend in making decisions, it is more likely that they will buy a Grohe product. They will have more questions about the quality, about the technology and we have all the answers.

But globally, you have been impacted by the slowdown?
Yes, globally it has impacted us because the markets in Europe and North America have crashed. So we expect to see a slowdown of about 10-15% this year globally. I should also say that globally even though there is slowdown and our sales would probably contract we are probably the only player in the industry that we know of who is sitting on EUR 350 million cash with absolutely no debts. We are a very profitable organisation that will ensure that even if things were to get worse we are in a good position to ride the storm. Actually, we would be in a position to pick up the weaker players as we go along.

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