Brita GmbH enters Water Purifier Market in India
German water filtration major, Brita GmbH has commenced operations in India with the launch of their new range of Water Purifiers, specially developed for the Indian market.
“In 2019 we will be investing 5 million euros in the Indian operations. Of this three million has already been invested and the remaining will be invested over the course of the year,” said Hartmut Wolf, Managing Director- Product Development, Brita India. The money was spent on developing product, infrastructure and office, market research etc.
“For this year we are going to only look at Bangalore with a sales target of 5000–10000 units in the first year. We plan to enter two more tier one cities in South India by next year. By 2021 we will be in all tier one cities in India. We are also evaluating options to produce locally, most probably somewhere around Bangalore,” he said. “We are applying a strategy for channel specific products. There will be some products that are only sold online. Plans for entering the online channel are due for next year.”
The company has launched three models for the Indian market ranging from INR 18990 to INR 27990, with a GST of 18% (for water purifiers).
The company’s present foray into the Indian market is a re-entry of sorts, considering the fact that it operated through a 50:50 joint venture between Usha International (Shriram Group) and Brita GmbH. The joint venture sold water purifiers in India during the 1990s and early 2000s, and had a reasonable market share in the country.
“The Usha JV ended several years back. It did not work out. That model was not scalable. Here it is an entirely different approach where everything is done by ourselves. We still consider India as a hub for neighbouring emerging markets,” said Hartmut Wolf.
The company has 34 people now. “We have an aggressive hiring plan for this year and estimate to have a total head count of 80 people by the end of the year with 40 in sales,” said Hartmut Wolf.
The family-owned company based in Taunusstein near Wiesbaden, Germany is represented by 28 national and international subsidiaries and branches with a presence in over 60 countries on all five continents. It registered total sales of 494 million euros in the business year 2017 and has 1,872 employees worldwide.
The market size for water purifiers in India is five hundred million euros (4000 Crores). Out of this the RO & UV segment is the strongest, growing at 20%. The overall market is growing at a CAGR of 10–15%. Eureka Forbes, Kent and Pure-It are presently the top three players in this market segment.
The distributed presence of these long established companies in tier two and tier three cities contribute to their significant market share in the country. “In a city like Bangalore the market share becomes smaller as the competition is extremely tough,” said Hartmut Wolf. “In five years we want to be the most trusted purifier in India. It is realistic to aim to be the number three brand after the two long established brands.”
“We expanded into China five years ago. Now the company has over 100 million Euros per year of sales from China alone. Now we are entering the second biggest market. We started operations in Bangalore in August 2017. In China the go to market strategy is different — there is an online focus for water filtration solutions. Here in India it is a high end purifier systems with a focus on door to door sales,” he added.
“As one of the leading global companies, Brita prides itself in developing localised innovations grounds-up that can solve unique challenges of water purification across the world. We have spent a considerable amount of time in the Indian market, and especially Bangalore to test water samples. The insights derived from this elaborate exercise have led us to build innovative water purification products that not only suit Bangalore, but the interests of the larger Asian market. Our launch in India reiterates our commitment towards the betterment of water quality across the globe. As the technology hub and with its mix of cosmopolitan crowd, Bangalore offers immense potential and is an ideal market to start our Indian journey and beyond,” said Melanie Aselmann, Global Product Marketing Director in a statement.
“Before manufacturing we did a water study in 1500 house holds in Bangalore and we found that the TDS in some areas was too high while the water was too hard in others. We had to find the lowest common denominator with respect to water quality. It took two years to develop the product for the Indian market. We have a more robust membrane. A 2000 TDS membrane is the common market standard. Ours is 3000 TDS. The water purifier can cope with multiple sources of water. Mineralisers tend to fade out after a couple of 100 litres. Our mineraliser also corrects the ph value to between 7.5 and 8.5. We have also managed to reduce water wastage from 75% to 50%,” said Hartmut Wolf. “We looked at the market and felt that the best place to sell water purifiers would be in consumer homes. So this is our go to market strategy. Direct sales is the number one sales channel in India. We will be the the only MNC to sell predominantly through direct sales in India. We tested sales (dry run) in 300 homes in Bangalore and the conversion rate is very high — higher than the current market leader.”
“We want to be mission led. We need something more relevant and engaging for the Indian market. Visualisation of end benefits is more important than adding more features,” he added.
