Stiebel Eltron entered India in August 2017 by forming an Indian Subsidiary headquartered in Pune. Within a short span of time the company has established a nationwide brand presence with more than 50 showrooms across India.
In an exclusive interaction with Washrooms and Beyond, Dr. Nicholas Matten, Global CEO, Stiebel Eltron GMBH elaborates on the strategies the company has adopted for the Indian market, to Mrinmoy Dey.
How are you planning to leverage your global positioning and expertise to capture a share in the Indian market?
Stiebel Eltron is a 100-year-old brand and is one of the market leaders in the fields of building services and renewable energies. It’s a ‘Green Tech Company’ focusing on green technology practices. The company has been offering high-quality products for more comfort, efficiency and reliability all over the world. The global expertise of being present in more than 120 countries and the knowledge to adapt to local markets gives Stiebel Eltron India the leverage to position the brand well in India.
What are the products that you are offering?
Stiebel Eltron globally has a diversified portfolio encompassing hot water solutions, renewables, ventilation, space heating and water filtration. The USP is the tankless water heater. With this product category, the consumer gets instantaneous endless hot water as soon as it’s switched on. Over a period, one can see considerable savings in energy. The compact design is not only aesthetically appealing but also well suited for tight spaces.
In the premium segment, it’s all about marrying the design with the technology to offer best in class product to consumers. How are you accomplishing that goal through your product offerings?
German Technology combined with designers like Phoenix designs has given us super brand award for the 6th time. This has given us better products which are more tailored to different countries of the world as per respective local needs and demands. These landmark awards are testimonies of excellent marriage of design and technology in our product offerings.
“In our category of business, it has traditionally been immersive retailing but we are coming up with experiential retailing as we see it a trend worldwide. We are planning to open company-owned display centres where product functionality and international experience is given to the consumers.”
From where are you sourcing your products for the Indian market?
Globally, Stiebel Eltron has 6 manufacturing facilities and has acquired 2 more companies over the last 2-3 years, thereby enhancing its manufacturing capabilities across the world. Two out of the six are based in Germany and four are spread across Thailand, Slovakia, China and Sweden. The products for the Indian market are from the facilities of Germany and Thailand.
What about the segmentation and what kind of growth prospects do you see in the Indian market?
We have a two-segment strategy. For the first segment, we are focussing on the premium segment of the market, the high-end luxury segment, where people have exposure to international brands. The segment is catering to the mass. We have segregated the portfolio to suit the segmentation. Different markets in India have different needs and therefore different potential. As an international company, we have solutions for all and thereby our diversified portfolio caters to the varied demands. For us, India as a whole is a key market to focus on because of its varied climatic conditions.
You have said that North East is a high priority market for Stiebel Eltron. How do you see the tier-II & III cities as market overall?
North East for multiple reasons is a high priority market for us. There is increased international exposure to the North east consumers. Also, the focus of Indian government on developing north east coupled with their inclination towards renewable energy products against the backdrop of the perfect climatic conditions is generating demand for Stiebel Eltron products and therefore it’s quite promising in terms of growth potential.
We have already opened up 8 showrooms across North East and have dedicated sales and technical service teams to cater especially to this market. Organic expansion and growth is in Tier II & III markets with increasing urbanisation and these pockets can no longer be ignored. We have already initiated the steps to expand our network to unrepresented areas.
Experiential retailing is a hot trend in the bath products industry. What’s your plan in this front?
In our category of business, it has traditionally been immersive retailing but we are coming up with experiential retailing as we see it a trend worldwide. In India, hot water products have always been a part of immersive retailing. However, because we decided to focus on the bathroom and sanitaryware segment, we decided to bring in experiential retailing in this industry.
For supporting the primary purpose, we are planning to open company-owned display centres where product functionality and international experience is given to the consumers. Our secondary purpose is to constantly endeavour to acquire prominent space at partner showrooms and design the space as per International standards, so the corporate identity is intact and the consumer experience is not compromised. Currently, we have more than 50 well-designed spaces at the dealer outlets with both internal and visible exterior branding.
“In the next 5 years, we see a huge demand for ventilation, renewables and water heating solutions. Also, in the industry, we shall see a lot of consolidation and only the companies with diversified portfolio and well-managed finances will survive.”
How different is the Indian market from the European counterpart?
India cannot be compared with European countries. The size of the country – both in terms of its size and population – alone makes India special. India is a subtropical country with different climatic zones. This means that our product portfolio must be correspondingly broad and our diversified portfolio caters to that. The existing electricity and water supply infrastructure also plays a role for which we offer suitable products.
How do you see the industry moving in the next 5 years? What are your future plans?
In the next 5 years, we see a huge demand for ventilation, renewables and water heating solutions. We see the demand moving up because there is a dearth of products for this segment. Also, in the industry, we shall see a lot of consolidation and only the companies with diversified portfolio and well-managed finances will survive.
Based on this assessment, our future plans are very aggressive and we intend to expand a lot in the coming decade due to our understanding of 120 markets globally. Decentralised Ventilation is going to be a game-changer in India. Urban air quality is dropping and there is an increasing need to have fresh breathable spaces. These unavoidable developments would give a boost to this segment.
Also, water filtration products which do not use electricity nor have any residue water wastage but on the contrary enhance the water quality by added minerals also will be revolutionary and transformative. Thus, seeing the potential and scope in these two unexplored segments, Stiebel Eltron shall also focus on these product segments as there is a considerable scalable growth expected on these lines over the next decade.