Facing strong headwinds because of high GST rate and a slowdown in demand because of RERA and demonetisation, sanitary ware maker Parryware has zeroed in on top 30 cities to expand its market share. The company is hoping that the festive season and increasing trend of bathroom renovation will help the demand to bounce back.
To achieve its growth targets, the company is planning to make India an export base and open exclusive showrooms and product studios at select locations to reach out to high-end consumer groups.
Talking about the company's growth plan, KE Ranganathan, Managing Director, Roca Bathrooms (the parent company of Parryware), said, "We have recognised 30 cities as category A cities where we are putting a lot of efforts in improving the brand visibility. We have tied up with big developers and big retailers like Hometown. We have also marked 50 cities of category B and C where we are getting into a distribution model like FMCG."
The brand has heavy dominance in South India and has a strong presence in the East as well. The Rajasthan market is also growing big for the brand. The Western part of India is slightly weak for the brand. In the North, Delhi is a strong city for the brand while Punjab and Haryana are not so strong regions.
Parryware has studios set up in Delhi and Cochin and intends to open three more next year and another three, year after next year.
Roca acquired Parryware in 2008 and major investment was made in 2014 when the Parryware logo was redesigned.
Parryware recently repositioned itself as the brand as always in fashion. Roca’s almost 80 per cent business comes from the Parryware brand.
The patent company Roca has been manufacturing tiles for last 40 years in Europe and USA. When asked if it intends to enter Indian tiles market, Ranganathan said, “We will evaluate the opportunity and then take a call sometime next year.”
Speaking on the growth challenge posed by factors such as high GST rate of 28%, RERA and demonetisation, Ranganathan said that the company did go through a brief slowdown phase but it has seen growth picking up in the last two months.
The sanitary ware market grew about 10-12 per cent until last year. But the overall growth rate dropped to around 7-8 per cent in 2017.
"Because of demonetisation and GST, the overall market dropped as the customers postponed their purchases and the builders went slow on construction of their projects. However, we are now seeing growth pick up in the month of August and September because of the upcoming festival season as a lot of people go for renovation of their homes," he added.
Ranganathan said that the high GST rate of 28 per cent for sanitary ware was also hampering the growth of the market and he was hoping that the government would put the category in the 12 per cent slab.
“We have made a huge representation to the government that sanitary ware is the basic necessity and have requested not to tax it at 28 per cent but to bring it down to 12 per cent. The GST Council is studying it and maybe we can expect some announcement very soon," he said.
According to the estimates, the overall size of the sanitary ware market pegged at around Rs 3,500 crore and 35 million pieces per annum. The unorganised sector accounts for Rs 1,600-1,700 of the market. In terms of volumes, out of 35 million pieces, the organised sector is only 10 million of it.
Parryware currently has 5,000-6,000 retailers across India and owns around 2,500 showrooms.
The top three domestic players – HSIL, Cera Sanitaryware (CRS) and Parryware Roca (PR) – account for 45 per cent of the industry size and over 65 per cent of the organised sanitary ware space. According to market reports, Parryware has a 23 per cent market share; HSIL has 26 per cent and Cera Ceramics holds an 18 per cent share.
Talking about the company’s goal, Ranganathan said, “In sanitary ware, we are the market leader in most of the markets in India while in the luxury segment we are distant leader with our brands Laufen and Armani Roca. In the faucets category, we are No. 2 after Jaquar. We do not go behind any particular brand and remain very close to our customers by providing best of products and services. Our main objective is to make our customers come to us again and again whenever they think of bathroom solutions.”
To take on the competition, the company has launched innovative campaigns such as one-of-its-kind cinema ad campaign ‘Loo break’. In the campaign, when intervals happen, Parryware adds come announcing about the ‘Loo Breaks’.
Giving an insight on the campaign, Ranganathan said, “With this campaign, we wanted that when consumers think of bathroom, they think of us. The whole point was how to catch the consumer. We can’t catch them at home before they go to the loo. During cinema intervals, 60-70 per cent people step out for a loo break. We thought of capturing their attention in a nice and funny way there.”
The sanitary brand spends five per cent of the total revenue on marketing. It allocates 30 per cent of its overall spend on mass media and 70 per cent on on-ground activities. Parryware will return to television advertising only next year. This year, the brand intends to stick to on-ground marketing activities.