K E Ranganathan, the Managing Director of Roca Bathroom Products Pvt Ltd, was in Nepal recently on a business trip. During the visit, Ranganathan inaugurated eight brand showrooms in Kathmandu, Pokhara, Butwal, and Bhairahawa. Tamish Giri of New Business Age had a tete-a-tete with Ranganathan to know more about the company's strategies and opportunities in Nepal. Excerpts:
How has been the journey of Parryware and Roca Bathroom Products in Nepal so far?
We came to Nepal 40 years back, and we call ourselves the leading bathroom brand in India. We introduced Parryware in Nepal in the early 80s by appointing distributors. We have been setting bathroom trends in Nepal ever since in terms of lovely showrooms, good distribution, and good projects hotels. We understand that a bathroom is a place where people spend time for relaxation and rejuvenation. So the challenge for the customer is to have good, clean, and hygienic bathrooms which will make them fresh.
Our product introduction in the bathroom is always on the platform - for example water-conserving products. Bathrooms consume lots of water in the closet, urinals, basins, etc. We felt the need to reduce water consumption. There is a basic engineering aspect to developing products. If we look at the water closet, some of our closets can flush with 4 litres of water. This gives the customers a great opportunity to save water because nature is depleting, and water may not be there in the next generation. So, we have to be very careful.
Secondly, hygiene aspects are very important in the toilet. Especially after the COVID pandemic, people are understanding the viruses, and bacteria and how these can affect their health. So, they are very conscious of the virus and bacterial aspects of the bathroom. We introduced products like the antimicrobial seat cover and touch-free products. This takes away one's fear from the mind, that if s/he uses the toilet they will get a bacterial infection. The next important thing is the glamour, fashion, and beauty of the product. Here we have introduced innovative products. For example, the latest Nightlife Series by Parryware is already a big success here. The Nightlife Series is available in black and red copper colours that are very attractive for youngsters. We work on technology products like Bluetooth showers, and electronic taps, and they are all hi-tech. While designing new products, our focus is on water conservation, technology, hygiene, and glamour.
If you look at the customer segment, we have divided it into four categories. We have lovely products for kids, colours and digital products for youths, designer products for adults, and senior citizen-friendly products like grab bars and high-rise closet stools. So, our thinking is simple. We have got a lovely customer base - individual homeowners, hospitals, hotels, and public places. We create products that are exciting for them. Our journey in Nepal over the last 40 years is very satisfying to us. We have got four brands in the country today - Armani Roca which is from the Giorgio Armani tie-up, Laufen from Switzerland, Roca from Spain, and Parryware from India. So, our customers in Nepal can get India's number one brand, the world's number one brand, and the luxury brands from Laufena and Armani Roca. Anything you want is available in Kathmandu and across the country.
What value and importance do the Nepali market hold to Parryware and Roca?
We have been here since the 1980s. Nepal is a key market for us like New Delhi, Bihar, Uttar Pradesh, and Kolkata in India. These are our key markets and we do a lot of investment in marketing. We have spent a lot on market-oriented activities, advertising, building showrooms, putting hoarding boards, and organising training programs for plumbing technicians. In the last six days, we inaugurated eight new showrooms across Kathmandu, Pokhara, and Bhairahawa. This shows how our business partners are loving us. They are investing in showrooms, and we are investing with them. So, this gives them the confidence that they are offering the best products to the customers.
How do you evaluate the Nepali market and its potential? What categories of Parryware and Roca products are currently available in Nepal?
Nepal as a country is going to grow, and the potential of the country is very high. The toilet penetration here is very low, but new buildings and airports are coming up. So, the business in Nepal will expand because of tourism and manufacturing activities. I have been told that Nepal is getting into lots of manufacturing activities within the country. So, the imports will go down and production will go up. When this happens, the economic development of the country will get high. I believe Nepal will continue to grow double-digit in GDP terms in the next ten years.
All products from Parryware and Roca, the whole bathroom sets, are currently available in the Nepali market. Not only high-end but also mixed segment products and super-rich products are available here. If you look at our customer base here, there are a huge number of individuals who buy high-end products like Armani Roca and Laufen. Similarly, we also have a mixed segment of customer base buying less expensive products like Parryware and Roca. We always focus on introducing all segments of our products in Nepal. Our brand Beyond from Roca was launched in Barcelona six months ago, and today it is available in our showrooms in Kathmandu. We always think that we need to bring the best product in the country because people here are demanding.
How has your business evolved over the years?
We are growing very well except for the COVID years when all the business activities plummeted. But in 2021, we are happy to tell you that we have doubled our sales compared to 2020. It means a lot of people are waiting to buy bathroom products, maybe it's due to renovation, new construction of hotels, apartments, hospitals, office complexes, and public places. A lot of new buildings are coming up, and we think that Nepal is still in development and it has to develop more. So, you can imagine the potential we have.
What are the challenges that you are facing here?
The challenges today are more from the procedure aspect of the government. For example, the government very recently stopped imports of all bathroom products due to low foreign currency reserves. The government has categorised bathroom products as luxury items which are wrong because bathroom products are essential and are not luxury items nor can we manufacture them in Nepal. Nepal doesn't have a manufacturing facility for bathroom products and this all makes it tough for big companies like ours because we are supporting the country for growth by supplying the best products. So, I request that the government should consider removing the bathroom products from the list.
What opportunities do you see in Nepal, and as a strategist, what would be your strategy to utilise them?
The opportunities are going to be in the tourism sector. It is going to grow manifold because more and more tourists are coming. So, when the tourism sector grows, both the private and government will invest in tourism infrastructure. So, these infrastructure projects will require bathrooms. International tourists will look for hygienic and world-class toilets. So what we think is the growth of Nepal at first will be in tourism. Second, the country will also grow manufacturing activities within the country. So, there will be factories, schools, and industrial activities. These all again will bring in opportunities for our products. We are working closely with lots of distributors, engineers, architects, builders, and developers about providing our best-in-class bathroom products. So, we see great opportunities in Nepal.
Parryware enjoys a 20% market share in Nepal. What helped you achieve it? Will it add extra pressure on Roca?
Parryware is enjoying such a high market share because of our distribution. More than 250 shops sell Parryware products in Nepal. New showrooms are coming up every month, and people want our products. Second, builders love Parryware because the products are very reliable and our after-sales service is very good. People come back to Parryware now and then because it gives them the best products. So the market share will continue to rise because we invest in the market and do a lot of activities. So the customer thinks that this is a lovely, young, and fashionable brand, and thus it is always on top of their search.
However, Roca is for a different class of customers. Our prime customers are high spending individuals and five-star hotels like Marriot, Radisson, and Intercontinental. Roca is a high-class product, and the world over it is famous for high-class standards.
How do you observe the consumption habits of Nepali customers? How is it different from other markets?
According to our experience, Nepali people prefer the best in class products. People here don't buy cheap quality products. The attitude of people here is very much like Americans who want to enjoy life and want to go for premium products, technology, and comfort. They don't have the attitude of buying cheap and saving money. All of our high-end products are selling very well here. The architects are excited to promote technological products. So, that's the power of consumers in Nepal. They say give us a more exciting range, products, and colours. The Nightlife products with Black and Red Copper colours, which we priced higher, are already sold out and huge demands are coming up. The consumers are clear and are demanding high-class products with good quality and design. In other parts of the world, including India, there is a segment of customers who will always buy cheap. Our Johnson Pedder brand is for affordable customers and Indians like it. Likewise, people in India go for unbranded products from Gujarat. So, here things are different. People want a branded product, which is exciting for us.
I think the market is growing around 8-10% in volume because of the economic development. High-end products are selling - wall-mounted toilets are selling, one-piece toilets are selling and then colourful basins are selling, bowl basins are selling. Likewise, showers have become very exciting. Our products like rain showers and multi-floor showers are becoming very exciting for customers. Electronic closets are selling; electric toilets are selling. So people are graduating from an average products to high-end products. That's the beauty of Nepal.
What led you to introduce Premium brand Armani Roca and Laufen to Nepal?
The demand from the customers encouraged us to introduce brands like Armani Roca and Laufen. There are BMW, Mercedes-Benz, and S class series here, everything is high-end. So these customers want Armani Roca. The architects are demanding such brands. I met a few architects here in Kathmandu a week ago, they told me that they know the brands and are in touch with the world. Today's world is connected through technology and architects here know what is happening in Barcelona. Interestingly, the architect said Laufen has recently launched Kartell and asked us why it is not available here. We said we will get it here.
What products of Armani Roca and Laufen are you currently launching in Nepal?
In Armani Roca, we have launched two ranges which are high-end, the cost will be very high for each bathroom. In Laufen, we have launched three ranges. We have the single biggest basin in the world. A piece of the basin is 4 feet long, and people are willing to pay for them.
What are the USPs of Armani Roca and Laufen products? What new quality and standard will they add to Nepali residents and commercials?
The USP for Armani Roca is Armani, the brand Giorgio Armani itself. If you go to Hollywood, you will find all the actors having Giorgio Armani products, Armani Roca will be there. Tom Cruise, for example, has Armani Roca, and if I have Armani Roca in my house. I feel like Tom Cruise because that's the brand association. Second, if you see Laufen, it is from Switzerland, and Switzerland is known for its precision. The wrist watches, chocolates, and electronics made in Switzerland are the best in class, and design, and Laufen is for that. Some of the Laufen products are made with the thinnest wall. Ceramics to make the thin wall is a craft and Laufen has the proprietary raw material. It is very difficult, no one in the world can make it like Laufen. So, these two brands are at a very end giving an exquisite collection to the customers. So, the moment you enter a customer's home with Laufen, you will know the standard of that guy.