Allocating substantial portion of marketing budget to OTT & influencer marketing: Urban Company's Smit Shukla

On October 10, Urban Company announced its entry into the home solutions category with the launch of smart RO water purifiers through the sub-brand Native, which require no servicing for straight two years.

The biggest factor that led the Urban Company to enter the home solutions segment is the understanding of the biggest pain point in the lives of consumers,” said Smit Shukla, Vice-President - Marketing, Urban Company.

Native by Urban Company is India's first range of water purifiers which need no servicing for 2 years and are capable of giving an output of 12000 litres of pure water without needing their filters changed, according to the company.

“The motivation for venturing into the water purifier industry or segment stemmed from our comprehensive service coverage of nearly every household appliance. Two years ago, we consistently received feedback from consumers that resonated with a common issue that water purifiers had become a significant hassle in their lives. They faced the burden of continuous follow-ups and the expenses associated with maintaining an RO system, which at times exceeded the cost of initially purchasing one. That's when we realised that among all the devices, the biggest pain point seems to be the water purifier segment,” Shukla said.

“That is when the thought of getting into home appliances started, with the aim of resolving certain issues. We will solve anything and everything that is a problem in the consumer's life. We have also forayed into the smart locks segment which is another problem in the industry that has not seen any disruption yet so we are working on that as well,” he added.

Abhiraj Singh Bhal

Abhiraj Singh Bhal, Co-founder and CEO of the company highlighted that even though designing a model that needed monthly maintenance could have brought in quick profits, it didn't align with their fundamental values. Hence, they opted for this innovative approach.

While sharing some insights into the constituents of their media mix for marketing and advertising activities related to the home solutions segment, Shukla said, “Our current media mix is primarily focused on digital platforms. Also, we are heavily investing in the OTT space. Although TV still plays a role in our media strategy, its contribution has significantly decreased compared to the past. This shift is largely attributed to the rapid evolution of the market towards social media, digital platforms, and over-the-top (OTT) services.”

He continued to explain that influencers play a significant role for the company, particularly in the beauty category, which is heavily oriented towards social media. As a result, the beauty category features a higher number of influencers who discuss their service experiences. On the other hand, the home category leans more towards a social angle, and as such, social and digital elements are more prominent in that area.

While highlighting the unique selling proposition (USP) of the two new products, Shukla highlighted that each product is associated with a unique problem statement and, consequently, a distinct USP.

“In the context of water purifiers, a major pain point has been the frequent need for servicing. To address this issue, we took a reverse approach and designed a product that operates without requiring any service for a duration of two years. Moreover, with each servicing, the warranty period is extended by an additional two years. As an illustrative example, consider the typical scenario in which consumers often change their filters or membranes every three months. This ongoing maintenance can accumulate costs, reaching approximately Rs 31,000 over the course of four to five years,” Shukla said.

“However, with our product from Urban Company, this expense is substantially reduced, capped at a maximum of Rs 13,000. Essentially, you only need to invest approximately Rs 3,000 to Rs 4,000 every two years to keep it running, as there are no additional costs during that period,” he added.

Shukla also highlighted that there are no specific challenges as such for the company in their category due to the kind of services that they have been providing to their consumers.

“We are a primary digital-first organisation. So the medium of choice is digital for us, but in specific, we have not faced any challenges because we have services which are significantly better than what offline does. We develop claims which are developed with a lot of market research and significant amounts of data, justification and validation. And thereby, we have not seen any significant problems as such,” he added.

Sukla also pointed out that when it comes to marketing efforts, they work with external agencies as well, in addition to in-house agencies, because that is where the scale comes in when it comes to marketing.  Moreover, there is a dedicated team within the organisation that makes the plan with all aspects of marketing and then there is a deployment agency which executes the plan.

Shukla also emphasised that the Urban Company leverages the use of celebrities in marketing campaigns extensively. “We have Kriti Sanon with us for the salon category because it's a high beauty quotient category. She brings a lot of value to the imagery of the brand and brings out huge relevance as well. Speaking of our newly unveiled water purifiers, the products for themselves are so strong that we would want the products to be the hero when it comes to M1 and M2.”

While shedding light on the growth and demand that Urban Company experiences during the festive season, Shukla emphasised that the two peak periods for Urban Company are summers, wherein AC service becomes very big and the second one is the Diwali season wherein the cleaning season kicks in and that becomes the biggest season for the company in the entire year as it contributes significantly to their total revenue.

On being asked about the expectations from the home solutions segment and the new products, Shukla said, “For these two products, the market that right now we are trying to target is the second-time buyers. Our target group is very clear here. People who have gone or are even currently going through the pain of owning a water purifier and they know that this is so much of a hassle, it's a strategic fit for their household.”

“We want to get a significant share in the first two years. We are very sure that we'll disrupt the market. The initial leads on the platform where we are offering our product have been highly positive among consumers. The reviews have been exceptionally positive, with customers enthusiastic about their experiences. Additionally, the ratings on our platform exceed 4.8, with many of them reaching as high as 4.9,” he added.

Lastly, Shukla highlighted that the Urban Company is disrupting the water purifier industry with no service for two years. Frequent servicing is the biggest consumer problem and if the Urban Company is able to solve it, they will make a fortune out of it with respect to the consumer needs stage.

“We are here to solve consumer problems, rest everything is a by-product,” Shukla said.

While explaining why well-established brands with years of experience in this sector have not been able to develop a product like this, Bhal said that there are certain established norms that one accepts as truth within the industry, such as the belief that water purifiers require regular servicing. This notion is deeply ingrained and has influenced not only consumers but also suppliers, creating a self-sustaining ecosystem. Industries often benefit from an external perspective, devoid of preconceived notions and vested interests, to introduce fresh, innovative approaches.

"In our case, as a service-oriented company, it would have been counterproductive to develop a water purifier that requires frequent servicing, as suggested. Creating a model necessitating monthly maintenance might yield immediate revenue, but it would not align with our core values," Bhal said.

"When a sector relies significantly on a specific aspect of its operations for a significant portion of its revenue, such as in the case of these OEMs (original equipment manufacturer) where approximately 33% to 50% of their income is derived from services, it becomes challenging to adopt a stance that jeopardises these revenue streams. This challenge is not unique to us, it applies universally. While we have completed over a million repair and service jobs for water purifiers, it still accounts for less than 5% of our income. Despite this, we consider ourselves more than just a service provider, we view ourselves as consumers. We are committed to creating products and services that genuinely benefit consumers, even if it means challenging our current business model. If we don't innovate, we risk others creating self-sustaining water purifiers that could disrupt our service offerings. In our competitive industry, continuous self-disruption is the key to survival and success," he added.

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