Technology will be Key Driver in Bathroom Space: Salil Sadanandan, Kohler

Kohler is one of the biggest international players in its space who has invested fair enough in India over the years. How do you compete and create significant leadership revenue and opportunities against strong domestic, Asian and other Chinese brands who are very aggressive in our price-sensitive market?

Firstly, our major competition in India is European brands and some Asian brands. In fact, our competitors are from Japan and Europe but not China. Chinese brands are still not as strong in this industry yet. We are, of course, first at the luxury end of the market and I will tell you what our advantages are.

First of all, we are one of the few brands which can give you a full portfolio of products in the bathroom space, including toilet, faucet, shower, shower enclosure, bathroom furniture, mirrors, and vanities, which are all part of the bathroom. And no other competitor has that kind and variety of portfolio.

We take a lot of pride in our width of coverage. When it is about design, if you are a classical hotel, we have an outstanding range which is designed to classical sensibilities. If you want to build a more contemporary minimal one, we have that range.

The second point is the fact that we manufacture in India which makes us very competitive and we have most modern factories in the world, in Jhagadia for 130 acres. We make for India and for the world in India.

The third advantage is our investment and that's one of the reasons we are here. We want to invest in making bathrooms important to our customer groups whether it is developers, hotels, or even end-users. We are probably the number one or two spenders in advertising or marketing. We are building the desire for customers to start evaluating their bathroom. Our philosophy is not to sell the product, but the concept of a dream button which is very different from everybody else.

Indian hospitality industry offers robust opportunities at each end of the spectrum. What is your play, strategy and how will you convert it into serious business not just at the very top end which is your natural stay?

It is already a big business for us. A significant proportion of our revenues come from hospitality, typically focused on four-star and above. And it will remain important for two reasons. One is, of course, it's a recurring business as they keep refurbishing the bathrooms. Secondly, hotels are also in a point of inspiration of consumers that's perhaps the first time you see a bathroom which is really exciting in a hotel room. And if you look at most hotels' strategy, if I remove FNB, it is two-fold - how the consumer sleeps and the bathroom. So the bathroom is an integral part in any case.

We have a specialist global team that works on relationships with some of the biggest hotel flags in the world. It is already important and big and will continue to remain there.

Leveraging your global experience and relationships with international hospitality chains present in India, what are your thoughts and plans to drive home critical advantage?

Most of the international hotel chains, particularly the American ones, know us very well. Even brands like Accor know Kohler very well because we are also present and they are big markets. So that is really not so much of a problem.

What, I think, they appreciate in a market like India is the fact that we have our manufacturing here and have probably the industry's best after-sales service system set up. And that's the most important thing in a hotel, once you set up nothing should go wrong. And if it does, you should have somebody who comes in and saves the day for you. That is a very strong advantage when it comes to hospitality. I mean, it's important for all customer groups, but hotels cannot have a room shut down for a day once they start rolling. So apart from our designs and our existing relationships, I think that's what they like about our setup in India and that is something that we have invested in.

Today, we provide customer service in 400 towns in the country and I don't even have distribution in 400 towns.

Tell us more about specific Kohler products tailored for the Indian hospitality industry and enlighten us on the recent trends as in design and technology?

First of all, what you see here (India Design Week) is fundamentally designed for India. We did a lot of research for a couple of years, and this is one of the hallmark of Kohler for the last 146 years. Perhaps we are one of the first, if not the first, companies to actually play with colors in the bath space as long back as 1924.

In the whole bold look of Kohler, colour plays a very important part of it, we always add color and finish in our line-up. But this time we did things a little differently by researching in India. We met architects, designers, big customers like hotels and residences, and then launched the colors which are relevant to India like Peacock Blue, Henna, Truffle and Matt Black, all inspired by the Monsoon or Thar Desert of India. And the interesting part is that a lot of the global markets want it. Our playbook for the last two to three years has been that white and Chrome are boring. And you will see that hotels typically like to have that extra layer of expression.

The other thing is technology, we participate in the consumer electronics show in Vegas. We don't rub shoulders with our conventional competitors rather we rub shoulders with Hyundai, Facebook, and Google. And this year we launched our revised version of Kohler Konnect, which is a fully connected voice-activated bathroom. For example, you can talk to your faucet and ask for a glass of water and it is the rage today because people are using voice more and more. This is displayed and working at our Bombay Experience Center.

So at one level, you see things like color and design while on the other hand technology being brought into relevant use. And I think, the connected bathrooms will be a big blessing to hotels, particularly the high-end ones.

With Kohler invested in manufacturing in India and its most modern manufacturing away from India, is it a case of an opportunity or does logistics and taxes put you at a disadvantage if you were to go for international products for India?

Well, not really. There are some import duty commitments that we have, but the reason we invested in the factory in India has nothing to do with taxes and prices. It is because India is so important for us. The factory is a 230 acres plant and one of the best in the Kohler Company. And that is a commitment to the country and the potential that we see here. It is far less about taxes and prices yet those are important too.  By manufacturing in India, I believe we are more competitive now, not only from a price perspective but also from being able to supply much quicker. Fundamentally it is a representation of our belief in the smart.

The hospitality industry has fairly large opportunities for Kohler or for that matter any category, be they greenfield new hotels or the ones who go in for periodic renovation or upgrade of existing hotels. How does Kohler pick share here?

First of all, it is about our history and relationship. Like I said, we have a strong association with global flags already, that's a foot in the door. Secondly, we also work with the ecosystem very well. Our teams regularly reach out to the architects and designers, who design these hotels, present in India or globally. The third thing in India is, and that's very important, that most hoteliers don't own their own property and rather work with developers. We are very strong with developers in the country, particularly those who are also getting into hotels, whether it is Prestige or Embassy in the South or Oberoi in the West.

These are the three elements that we have with feet on the ground who are reaching out to them, and we have a distribution footprint that supports it. 

If somebody wants to see a product, I can reach it to them in any of the big cities within hours and I think that's how we are succeeding. Also, like I said last time, it's the track record for the hotels who are using Kohler and I’d say they are reasonably satisfied as they also know if there is any issue, the team is within a phone call away to come and sort the issue.

How is Kohler adapting smart and new age technologies?

There is a lot of technology which actually goes into our products in any case. For example, we were the first company to digitize a shower. We have a system called the Digital Thermostatic Valve and the entire control system, with very high tech plumbing, is automated. However, what the consumer sees is a remote which is perhaps easier than iPhone to use. You can customize and feed the temperature, flow etcetera in the menu and upon pressing the desired option you'll get the experience that you want. 

The other way, we are using technologies that we are very focused on making sure that we make sustainable products and that's important to us. Sustainability is how we manufacture things and how much water are we using on the products we use. We have some of the industry's best flushing toilets that use minimal waters and still do a better job than most others.

We also have showers, which infuses air into the shower and you get the same experience but using one third less water. And that again is something which is considerably important to most hotel chains. 

Share five or more Kohler USPs that are hard for any other brand to beat in India?

Fundamentally, apart from colors, digitized products, connected bathrooms, glooming products, furniture etcetera, what differentiates Kohler in the way we run our business is very simple. If a consumer or a customer has a fantasy about a bathroom or something that they imagined, we make it come true. 

You have been in the FMCG, consumer durables and media space for over two decades. How does this diverse experience dovetail with Kohler’s desire to dominate in its space across the regions that you manage?

The only strength that I derive from my experience is, truly, the diversity. I have met the same customer or consumer who's buying different products, and I have also met completely different customers. I have sold to developers in my previous experience, but not this product. I've also sold to consumers, which today I don't sell to. I sold personalizing products to women that is a very different audience. So, what this allows me is a diversity of knowledge about the customer and it also keeps me going. I keep meeting new customer groups, learn something new to put back into the hopper but I do understand Indian customers from many different angles and I think that helps. My team will probably be a better judge of that. But what is exciting about Kohler is the new things we can do on a daily basis.