Retail will continue to be your thrust area in India, isn’t it?
Absolutely. I think it all starts from there; it’s the retail sector which creates the demand, creates the visibility, creates the education and the projects and institutional buyers follow.
Currently, we have 82 outlets and will be adding another 34 before end of this year and next year you can expect a major explosion. Our existing outlets are spread out evenly across the country. We have covered all the tier-I cities and now we have started covering the tier-II cities like Kochi, Coimbatore, Guwahati, Indore, Udaipur, Bhubaneshwar, Siligudi etc.
As far as the hospitality sector goes, the 4-Star and 5-Star segment is obviously our market but we are also picking up a lot of 2-Star and 3-Star projects now.
The International Association of Plumbing and Mechanical Engineers (IAPMO) has recently pointed out that 90% of the plumbing industry workforce in India is not professionally trained.
Your comments.
Obviously, it is a huge matter of concern for us. In fact, the lack of sufficient trained plumbers concerned us when we came to the Indian market. Globally, plumbers (installers) are a major focus group for us. We like to work with them; we don’t just train them but also get feedback from them about what is it that consumers like and don’t like. Plumbers are our greatest marketing research tools. And we are concerned that plumbers in India are not organised to a great extent.
At our end we are ensuring that a Grohe technician is available to guide the plumber even if it is limited to just a single faucet. As far as I know we are the only company doing it for every single installation. Others might have conditions about minimum volumes or project size.
The only problem we are facing is that information is not available to all the customers. So we are trying to go one step ahead by proactively collecting information from all our showrooms on customers every week and then informing them.
About one year back we did training sessions in cities Kolkata, Bangalore, Mumbai, Ludhiana, Chennai, Calicut and Kochi. We had asked all the plumbing contractors to bring their plumbers. We are planning to repeat it this year. We have also tied-up with the Sri Ramakrishna Technical Institute in Coimbatore for its plumbing course. We are looking at a similar tie-up with an institute in Pune.
Your next manufacturing unit is likely to in India, right?
Yes, our next manufacturing unit will be in India. It is just a matter of time but we are committed to have it here. We need to analyse how the capacity in Europe will be utilised and then take a decision about making new investments. Currently, we have six manufacturing facilities - three in Germany and one each in Portugal, Canada and Thailand.
But even when we do manufacture in India, certain critical components would be imported from Germany.
In terms of regional breakup, which is your biggest market in India? Do you see any other emerging markets?
Our biggest market continues to be the Delhi NCR area. It’s a market that really appreciates the best things in life I would say. Bangalore is fast catching up and is likely to go ahead of Delhi by next year. Mumbai is a bit slow currently but likely to start picking up. It has been slow primarily due to the existence of the grey market here. But we are tackling with that issue now. Kerala is a rapidly growing market for us.
What’s Grohe’s design strategy?
We strongly differentiate between design and styling. Something that looks beautiful and fashionable is not necessarily a great design. Our product evolves from functionality. For example, all our faucets are created on the Seven degree factor. This means all the levers of faucets are angled at seven degrees as it is the most comfortable angle from the user perspective. So a Grohe product is all about figuring out a functional aspect first and then putting it in a good aesthetic package.
Design must combine functionality and technology with great looks. That’s our design philosophy. This is one of the reasons why we do not use outside designers. Incidentally, Paul Flowers, our design head is ranked amongst the top 40 globally.
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