Buoyed by the positive outlook in the real estate and construction sector in the festive season, ceramic tiles maker H&R Johnson is aiming to be the top player in the segment in next two years.
The company is relying on its innovative line of products to dethrone the current market leader, Kajaria Tiles.
âBoth of us are growing pretty neck and neck. Itâs only a matter of time. We keep on launching innovative products in the market and the competition keeps on copying us. We are confident that in a year or two, weâll be back to our No. 1 position,â said Ketan Trivedi, Senior General Manager, Marketing, H&R Johnson India.
The company had lost the top position to Kajaria due to production issues at its manufacturing facilities.
Kajaria, H&R Johnson and Somany Ceramic are the top three companies in the tiles category. Kajaria leads the tiles market in terms of volumes and sales, followed by H&R Johnson and Somany.
The company is now expecting growth to pick up as the effects of demonetisation and RERA implementation are waning and the festive season has started on a solid note.
"Things are looking better now. We are almost approaching our peak season time as festivals are on in different parts of the country. This is a stable time for all the building material companies,â said Trivedi.
The approximate size of the tiles market in India is worth Rs 24,000 crore. The unorganised players make up 60 per cent of the total ceramic tiles market of India.
Trivedi said the company would actually gain market share with GST coming into the play as the unorganised sector wouldn't be offering cheap prices anymore because they'll fall under the tax net. Tax and duty evasion is expected to reduce under GST.
"The unorganised brands are forced to comply on the taxation front, with GST coming into play. Our price differentiation has narrowed down. We are very happy with this move. If everyone is on a common plane, then organised brands will gain. Things are going to become much simpler as all taxes will merge into one kind of tax. More importantly, the unorganised sector has to pay taxes now. Ultimately, the product has to meet quality norms.â
The ceramic tiles industry has a huge scope to grow as only 22 per cent of India has tiled floors. The rest is cemented flooring.
Trivedi believes the unorganised sector is definitely a competition for the industry. Nearly 300 ceramic tiles companies are located in Morbi, Gujarat. âI will call them competition because if I look at it from a customerâs point of view, the customer will either buy their or our tiles. Unfortunately, in our category, people choose tiles on their looks and to some extent on budget. Itâs our job to educate them on what to keep in mind while buying tiles,â Trivedi said.
H&R Johnsonâs topline sales is about Rs 1,900 crore.
The company is banking on the print and digital advertising campaigns to reach out to consumers. The brand is using augmented reality on the website to give a real-time experience to its consumers.
Talking about the advertising strategy, Trivedi said, âOn television, we cannot really talk about the productâs features as itâs a very expensive medium. We continue to use print and digital as the preferred medium.â
âWe believe it is extremely important to be very active in the digital space. We are continuously raising our presence on the digital medium. We are also getting into virtual reality, where you can wear VR headsets and see how a tile will look in a room,â said Trivedi.
Hungama is the digital agency of the company. The brand is reaching out to consumers through content marketing and has a blog, âItâs your worldâ, to educate people about the right ways to buy tiles.
The company has not increased its marketing spend in recent times due to the turbulence in the realty sector but intends to hike it going forward. The ceramic tiles maker spends two per cent of the topline sales, around Rs 35-40 crore, in a year on marketing. Functioning in a category where the touch and feel factor is important for the consumer before buying, the company distributes the marketing spend equally between mass media and on-ground activities.
Recently, H&R Johnson launched the second phase of its âRed Ramp Projectâ to spread awareness in order to make India accessible for the visually impaired with the use of tactiles in public spaces. This campaign is a second initiative of the âRed Ramp Projectâ executed in 2015 by Johnson Tiles. It was conceptualised by Soho Square.
This is one of the brandâs social and cause marketing campaigns. It continues to advertise through its brand ambassador and Bollywood actress Katrina Kaif.
Trivedi said H&R Johnson was the first brand in the category to get a celebrity ambassador on board.
Commenting on the campaign, Anuraag Khandelwal, ECD and Creative Head, Soho Square (Mumbai), said, âWe always knew the âRed Ramp Projectâ couldnât be a one-off initiative. We had to follow through. And thatâs when tactiles came into the picture. After months of research and meetings with the visually-impaired, we realised that for some, even a 50-metre journey is akin to climbing a mountain. And that became the driving force behind the current TVC. Itâs not the disability that stops them, but the lack of appropriate infrastructure that doesnât allow them to live their lives independently."