This year, protecting business, not growth, is the key: Mahesh Gupta, Kent Ro
Dr Gupta, Chairman, Kent Ro, tells us why the company continued to advertise during lockdown, about lessons learnt from the Atta and Bread Maker controversy and more
The on-going coronavirus pandemic and the lockdown have hit the Indian economy hard. One sector that was badly impacted was retail, particularly the consumer durables segment. As the lockdown was announced on March 24, it is estimated that half of the sales in the last month of the financial year was impacted. While April and May registered zero to minimal sales, the easing of restrictions and opening up of the economy helped in some recovery and was the first step to limping back to normalcy. However, sales in June were less than 50 per cent when compared to the previous year, as while large parts of the country have opened up, many major cities continue to be impacted by the virus.
Giving an overall view of how the lockdown and the pandemic impacted the consumer durable sector, Dr Mahesh Gupta, Chairman, Kent Ro, says, “Consumer durables are not the priority at the moment. Even after restrictions have been eased, consumers are not visiting retail outlets as they are afraid to go out. Currently buyers want to postpone the sales.”
Gupta also explains how deep the cuts have been. He says, “Most of the industry will lose out about 25 per cent of their turnover this year because April and May was a wash out. There is not going to be any growth this year. If everything goes well from now on, most industries will lose between 20-25 per cent of revenue. However, uncertainty remains and we are not sure how the pandemic will behave in coming months. If the situation deteriorates further, we could see more than 25 per cent cuts in the turnovers. It’s anybody’s guess as it is too early to estimate.”
Banking on Innovations
Starting out as an entrepreneur, Gupta pioneered the concept of water purifiers using RO (Reverse Osmosis) technology in the country. He went on to launch brand Kent RO in 1999, introducing RO purifiers in India. Today, Kent offers a range of healthcare products and home appliances including water purifiers, air purifiers, vacuum cleaners and kitchen appliances. It is estimated that the company’s turnover is around Rs 1,000 crore with its flagship product, the water purifier accounting for 80 per cent of the sales. Kent RO commands a 40 per cent share of the organised water purifier sector market.
Having a wide range of portfolio at Kent RO Systems has helped the company during this period. Gupta says there has been a surge in demand for kitchen appliances primarily on account of people being confined to their homes without help leading to an increase in cooking. One SKU that has seen incremental growth has been Kent Vegetable Disinfectant. “The Kent Vegetable Disinfectant never drew the attention of people as they never understood its use and requirement. The product hardly had any sales but it is a hot selling item now and we sold around 7,000 pieces in June. Consumers now understand the value of the product, that vegetables can be cleaned without any chemicals with this appliance,” he says.
Gupta prides himself on bing ahead of the curve when it comes to product launches be it RO water purifiers or the vegetable disinfectant. He says, “We keep thinking of issues that consumers face and find solutions. However, we are unable to sell these products to start with. But as time passes, people realize the importance of our products.” He continues to explain how constant innovation has helped the company, “It is only innovation that has kept us ahead of our competition. We strongly believe that this is not the end of the tunnel and we will continue to face new challenges in the future. We need to find new solutions for every moment. We feel that innovations, product up-gradations and designing new products will be the key to our success.”
The Safety Factor
A lot of products in Kent’s portfolio have to be demonstrated and also installed by a sales representative. The current crisis has led to safety becoming paramount importance with consumers wary of visiting stores or allowing company personal entering their home. While Kent’s current system allows customers to call Kent’s call center and within 24 hours a representative is available to demonstrate and install the product at the consumers home. On its part, the company has ensured all its representatives have been instructed about hygiene and installed the Aarogya Setu app on their phone before taking any customer home visit.
Marketing Brand Kent & Lessons Learnt
An impetus for Kent Ro’s growth was getting on board actor Hema Malini as the brand ambassador. The marketing campaign with the veteran actor helped the brand grow. And it is this belief in the power of brand building and marketing that saw Kent continue its advertising during the pandemic, a period which saw many advertisers cut back their advertising spends.
Says Gupta, “Many companies stopped advertising but Kent continued to put money on Television and Print. We were on Television from March till June and continue to be present. We believe that brand building is not a one-day exercise. It’s a long term exercise and we need to continue communicating to our prospective consumers. We believe that we must continue our investment when other people are not doing it because that is the time you get better visibility and that is what we have done.”
Currently Kent spends more than 10 per cent of its overall revenue on marketing. Commenting on Kent’s media mix he says, “The media mix is changed on a continuous basis depending on the need. Television continues to be the prime media in terms of our investment. Print is also equally important for us. However, Digital media is gaining momentum now.”
However, it was Kent’s ad for its Atta and Bread Maker, released during the lockdown, which caused uproar with the ad deemed to be tone-deaf and classist. Taking note of this glaring misstep, the brand was quick to recall the ad and issue an apology. Asked to comment on this Gupta said, “A big learning for us was that we need to be sensitive and be very careful about people’s sentiments.” The company has also made changes internally in its processes to ensure that such mistakes do not happen again. He explains, “Sometimes, Digital campaigns are released by subordinates. We realized we need to be careful as this can have a big impact. We have now decided that all communication that goes into the public space will go through the eyes of the senior management and then approved.”
Going ahead, Gupta is positive on the growth of the consumer durable segment, “Consumer durables are the equipment of convenience and people require these conveniences in their fast life and I find no reason why they will not grow.” The company is gearing up to launch new products before Diwali with the focus on resolving consumer issues and providing good service to their customers.
Asked on the business outlook he says, “These are very trying and uncertain times. We have to be careful and protect our businesses this year. Protection is the key rather than growth.”
On a final optimistic note for entrepreneurs starting their journey in this environment Gupta says, “Entrepreneurs have more opportunities today than when I started out. They must believe that there are good times in the future for them. If you believe in yourself then success will be in front of you.”
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