Mahesh Gupta Curated
Founder-Chairman of Kent RO Systems Ltd
CURATED BY :
There are a lot of people specially young entrepreneurs or the aspiring entrepreneurs who are watching this, any message for them?
You have covered a lot of distance that too in a category which was non-existent, any decisions that you really regret?
Apart from these products, any other products that you are looking into?
So, what is the way forward in terms of your aspirations or for Kent if you were to look at it because you are already present in many areas that touch the common man's life. What are the new products you are looking at, where do you want to see Kent 10 years down the line?
Would you call regulation also a challenge because what I have observed is that India as a country has become very conscious about environmental challenges but at the same time what is happening is because of the population size we cannot afford to be over policing any of these verticals because you know there is a question of basic availability even today for a very large part of population who are still living in rural or tribal areas. So, what is your take on that?
But today if we look at the overall business environment and I can ask you this question because you started your journey when India has just started to open its economy and today we are at a stage where the whole world looks upon India as one of the fastest growing economies. Was it more challenging then or is it more challenging now in terms of operating environment for an entrepreneur in terms of consumer behavior, competition and third is governance.
In the early days of your business, what was the biggest challenge that you had, was it convincing a customer to try your product, was it convincing the dealership network actually to support your product or was it innovation?
Often it happens that once you succeed in one particular category then you tend to focus on more on that and expand that business, but in case of Kent what we have observed is that you have also ventured into newer categories and somewhere if you look at it, your focus is somewhere connected to the day to day life of a common man, all the products that you have made like the water purifier, air purifier or vegetable purifier, so are you trying to be present in every household and every commo...
There are two ways of looking at it like in a country like India, the penetration now is only 3%. Actually if you look at it then it is a huge opportunity, on the other hand it's a huge challenge that even after almost 75 years of independence, India is still on various parameters if you look at it such as health, hygiene, sanitation, water availability, there are a lot of parameters where we are way behind ideally where we should have been. So you being present in that space and operating, w...
So, weren't you worried at that point?
But can you share some anecdotes from your early days because first it was a new product, second it was an unknown company. So, what was your initial experience on the market response, like when you used to speak to your dealers or consumers, what was the initial experience and what was your key learning from those days?
So, if I was to look at your journey, should I call you a great marketeer who marketed a product or marketed a category which was almost non-existent in India, or should I call you a great innovator or is it a combination of both?
It is indeed a history but at that point like you rightly said it was more of an accident and even if you saw the potential in that business, did you ever imagine in those days that this product line or this business can be this big that it would become a household name?
How did you think of this industry where you thought of doing innovation, building your future and building your enterprise because water in India was always taken for granted. A couple of years back, nobody actually bothered about what kind of quality they are consuming in the name of water, so how did you think of this?
Apart from the current line of products that you have, what are you recently working on?
How do you perceive this industry in the future?
The Water Purification industry is a lot different from other industries, customer service is a very important aspect here, tell us about what kind of service do you provide?
You have become a household name since you started this business, tell me how do you celebrate your success?
What is the future of the company likely to be?
What are your annual capex requirements?
You have shared all your experiences, all your knowledge with the consumers by the products that you made. Are there any plans to share all the spoils that you've made with the shareholders? Any plans for an IPO perhaps?
What fuels your passion?
So your competitors aren't pushing in or pressing in with more aggressive products? How do you keep up?
So, it now brings me to that section, talking about breadmakers, why are there toasters, grinders, blenders and juice makers? Do you want to become a whole....
But these are products which are available in the market already right?
So, what explains your foray into bread makers and atta makers and all of that?
So basically what you are trying to say is that the mother brand Kent now stands for purification?
Kent, as a brand has been positioned very strongly as a water purifier. Lately, you've got into new home appliances as well, how difficult are the challenges for you to move away from a water purifier brand to other home appliances?
So, what is next in this step of water purification itself?
So, with all this purification of water, why didn't you come up with a water brand itself?
You are an inventor by nature, you've been inventing a lot of products, even at IOC you had a lot of patrons to your name. Are you still the inventor or do you have a team right now for that?
And how many does it sell every year?
Tell us a little about the evolution of the RO purifier.
So say someone like Hindustan Unilever, they have a brand called Pureit, if they ask you to sell your company to them, would you be able to do that?
Do you have any financial goals in mind?
Ok, so let's talk about the business itself. What is your business model like, how much of your revenue comes from water purification, how much of it comes from service of water purification, how much of it comes from the other appliances and what is the mix likely to change going forward?
Tell us a bit more about that.
You said that you are an innovator, you have never done anything that someone else has done, what do you do about the others who do exactly what you did? Before Kent came in, there was no other RO purification in the country. After Kent came in and developed the market, the market grew. Then you had people with stronger brands coming in, the likes of Aquaguard, you had the might of Hindustan Unilever as well as all of them starting their own products. So, how do you try to stick your own in f...
Do you plan to increase it?
How do you disrupt the distribution of these products?
Now, this brings me to the most basic question as a consumer, you put four water purifiers in front of me, I will have no idea which one is RO, which is UV and etc. How do you differentiate your products and how do you communicate that this is good for you?
Why is the market of water purifiers not growing?
So, you do not want any additional funds from anywhere.
Not only continuous, in fact in the second half of her career perhaps people would remember her more from Kent than a lot from movies, with all due respect to her.
Hema Malini was skeptical of becoming a brand ambassador at first and in today's day you cannot distinguish between Kent and Hema Malini herself.
Why Hema Malini and what was so different about the way you released your Ad and went about it?
I'll definitely come to that but a question with a brand itself, you were in IIT, an engineer, now you are grappling with finance, distribution, the challenges of business. How do you become so perceptive when it came to a brand and brand perception, brand image, brand ambassador, everything's spot on because if you shut your eyes, Kent means shudh paani. How did you get to do that?
Tell us a little bit about the distribution challenges and initial funding, where did that come from?
Let’s talk about some of the initial challenges. You were a serviceman first and then started your business launching a product that didn’t exist. How difficult was the climb?
That's exactly my next question is, in fact you know as a country we have such different types of water that is hard water, soft water, mineral water, ground water. How do you come up with one system?
Okay, so basically a problem at home made you aware of a much larger problem in the country and made you an entrepreneur and made you create this Empire of water purification.
You are pretty humble in the way you talk about your disruption but let's go back to your story. You are an IITian from Kanpur, after that you were working in IOC, a specialist out there with a lot of patents to your name and then suddenly water purification, how did that happen?
So, how does it feel, you disrupted the RO water purification system single-handedly, before that water purifier was Aquaguard.
How do you ensure a good after-sales service for the customers?
There is a list of prestigious awards and accolades that you and your company has received till now, what are you planning ahead?
Apart from water purification systems, is there anything else that you would like to take up in the future to ensure good health for the common people?
Please tell us about your initiative of 'Wash Hands' that is associated with the Swachh Bharat Programme.
Please tell us something about Kent's initiative on 'The Art of Living'.
There are many areas in our Country that do not receive sufficient electricity, do you have any purifier that can operate without electricity?
Why did you choose Film Actor Hema Malini for this role?
When you started off in the year 98-99, how did the idea of Brand Ambassador come to your mind?
Can't we use this rejected water to water the plants?
So you want to say that there is no water wastage at all?
But, there is a problem regarding water wastage in RO Purifiers.
I would like to know, how do you maintain the purifying process because the water can be contaminated by various things. Is it different for different contaminants?
I agree with you but why do you think that people do not use good water purifiers? Do they lack the proper knowledge or they cannot afford it?
Did you ever imagine such a tremendous growth in 18 to 20 years? You have almost become a household name now.
Sir, you are a graduate of IIT Kanpur, you are a mechanical engineer, you used to have a good job, what made you take up a venture that is related to providing clean water to many?
Which all cities you are looking to expand in the future?
As indicated above we have Kent is present at around 12,000 retail outlets Pan India and has 3000 distributors, 300 Direct Marketing executive and a sales force of around 1500 sales persons. In fact, the company exports products to Bangladesh, Sri Lanka, Kuwait, Nepal and recently entered GCC Market. Now the company is planning to double its exports in next two years.
Do you look at dealership network to grow further in tier III and IV towns?
Well the problem is bigger and we need to understand that first. In India there are multiple health issue in different cites but the route cause is contaminated water irrespective of resources even in villages. We have done extensive surveys which has revealed that the resources of water are highly polluted like well and ponds so we have designed different product for different problems. Then another challenge is that there is no electricity and power available in many villages and these were the people who suffer the most with the water born diseases. Infact it is better to quit Better quit water then consume piled water. Therefore, we have worked on a product which can effectively work without any battery power and electricity but highly effective to remove bacteria and virus like cyst arsenic. After successfully designing these water filter the challenge was how to motivate people to use it and educate them about the need of clean water. We identified the pockets which were extremely exposed to water born diseases and joined hands with various NGos and social workers across India including art of living to educate people on the need of clean water to drink and distributed these water filters to them. So after having done all these exercises we are growing dealership network to grow further in tier III and IV towns
How bullish you are on omnichannel retailing?
With the growing online Growing online market, omnichannel retailing is assuming importance but it is still may its way in a full throttle way.
Which all retail channels i.e-MBos, EBOs or e-commerce you are betting big on? What is the percentage of sales coming through the different retail channels?
Well, Kent has the strongest distribution network, amongst the water purifier companies in India. Kent sells its products through various distribution channels – Retail chains, Modern Trade outlets, CSD & Police canteen, corporate tie ups, Direct door to door marketing and E-commerce. The retail presence of brand Kent is phenomenal. Kent is present at around 12,000 retail outlets Pan India and has 3000 distributors, 300 Direct Marketing executive and a sales force of around 1500 sales persons. And most importantly Kent has a state of the art CRM based centralised call centre and Service centres which service 19,000 pin codes. The company has also started setting up Experience Centres, where the customers can experience the innovative products. It will be a chain of 10 experience centers which will be on franchise model. The company has already opened 2 stores, one in DLF Mall of India and another in Lajpat Nagar Market.
What percentage of the market in water purifying segment is organised? How you are planning to penetrate further?
The overall size of the water purifier market, both organised and unorganized, is approximately Rs 6,000 crore, out of which between Rs 3500-Rs 4000 crore is the organised one. Also currently only 1 per cent of the country is covered. Hence, this is an extremely under penetrated and much needed product. Talking of metros and big cities, the penetration could be anywhere between 25-35 per cent, but if you go to smaller towns, the penetration is as low as 10 per cent or even less.
Your advice to the budding and new-age entrepreneurs?
The times are very positive and one must take a step forward. Come and become an employer rather than being an employee. It’s high time you start believing in this thought. I have a strong belief that the world is changing. It has changed in the past and it will change in the future. But right now, the world is changing faster and in the coming times, the speed of change will only multiply. So, you have a role to play in this world! Come and play. Don’t take your business seriously. Take it like a game. There are wins and losses. It’s okay! Just enjoy.
You’ve been in the business for close to two decades now. Do you think you’ve been able to impact lives in some way?
I think I have made a difference to innumerous people. It reflects in my dealings with them on regular basis. Whether in terms of teaching or touching their family lives, I know I am inspiring a lot of people and I’m truly honoured by it.
Hema Malini has been the brand ambassador for a decade now. Why has she never been replaced?
I should counter question you, “Why should I replace her?” Just because it’s been 10 years I should replace her? She fits into my yardstick and the brand has grown with her as the brand ambassador. She’s active in all spheres of life – Acting, Dance, and Politics – there’s no reason for us to replace her
Sometimes, industry awards are considered rigged. What’s your take on it?
I don’t think that’s right! If a person is paying to get an award, then it is a bad thing. If somebody is taking money to give awards, it is again a bad thing.
Are awards important?
Not for me but for my customers and employees. Awards are a form of satisfaction but not for me. It is recognition of your work and that’s it. The awards are not given to Mahesh Gupta. They are given to Kent RO. And Kent RO is because of people working for it.
What if Baba Ramdev’s Patanjali decides to enter water purifying segment?
I have nothing against him! Why should I be worried? I welcome him. Anything that’s in the favour of humanity and society should be welcomed. If both the players upscale the market then it’s fine, we both will have a role to play.
What are your expansion plans?
We have created a category in the minds of the consumers. They understand that we are into kitchen and purity space. The brand has now evolved and being built as the ‘House of Purity’. We want to work in the space of purity and help people remain healthy. By space of purity I mean categories such as water, air, food, living space and at a later stage, we intend to enter the spirituality space as well.
Was there any pressure on them from your side to enter family business?
No, it was a conscious decision by them. They both are professionals and highly educated. I only made the suggestion and it luckily fell into their line of thinking.
How is it to be supported by your children at work?
Well, yes, they both are actively involved in the business right now. It’s good to have family as a part of the organization.
You’re at the helm of an 8-billion-dollar turnover company. Do you get a good night sleep?
Absolutely. Nobody can wake me up before eight hours . We have systems in place and I operate at a macro level. When you do dealings in the right fashion, you don’t have to worry about the sleep!
You are not an extravagant?
Not at all. I don’t’ mind spending money but it should not be a wasteful expenditure.
What has ‘lack of funds’ or simply put, ‘need of money,’ taught you in life?
It is very precious. Keep it safe. Don’t distance yourself from it. Be a miser.
Your products are relatively priced higher than other products and yet you command near about 40% of the market share. How?
I think money is not something that drives businesses. If you are at the bottom of the pyramid, it’s the price which will drive the business. Once you are at the top of the pyramid, like us, then the driving force is the offering and quality.
How important is innovation?
It’s the key to success in today’s world. We are not living in the world of information anymore. Earlier, if you had exclusive knowledge of any technology, you could keep it a safe and your generations could thrive on it. Then, Capital took centrestage. It was impossible for anybody to do business without sufficient capital. But today, it is neither about information nor capital. It is all about innovation i.e. how can you offer better.
So, you believe in people…
What else is there in this world? (With a hint of laughter in his tone) Success is not because of money. Success is because of the people. If you have the best talent then you are not bound to fail.
At any point of time, did you feel incompetent as you didn’t have any relevant experience?
I felt I had limited resources at my command. Till today, I have not been able to put up a face to hire the best talent in the country. I am an IT product myself and come from the best & talented community. I cannot even hire my colleagues. It’s not that my company has not gained reputation but those people have different type of choices. And since I don’t have the best resources, I feel constraint that I cannot put my best foot forward.
So when you were alone, didn’t you feel like quitting?
Yes, many times. There were a lot of struggles. When things don’t move, you start to question your decision. I came into water purifying business in 1998 and things didn’t work out for initial five years. We were fighting against the brand synonymous to water – Aquaguard. We were selling at Rs. 20,000 and were hardly able to clock sales. I contemplated switching back to Petroleum. But I continued with my journey because I knew I was doing well for myself and for the people in general. I knew that one day I will succeed.
What is the toughest part of being an entrepreneur?
It’s a lonely journey. If you’re in a job, you have bosses and colleagues to guide you. An entrepreneur has to take the responsibility all on his own, have a vision and walk the unknown path. One may have mentors but they aren’t going to get affected by your decisions. You are all alone.
I know you don’t find time for it now. Do you miss playing Bridge?
Obviously. There are times when you are passionate about something but your priorities overrule. There’s a cause to it & with acceptance you say, “It’s okay things can wait.”
As you said you wouldn’t have entered water industry had there not been your need. In such a case, what business would you have done?
I don’t know. I don’t know… May be I would have played Bridge.
Kent RO is a product of need & passion. Do you think you wouldn’t have done it if you didn’t face a situation to give clean water to your own family?
Absolutely! Supposedly, my water would have been clean and there was no need to purify water, I don’t think I would have made a water purifier. Necessity is the mother of invention to me. Understand that I am not a ‘water man’ to begin with. I am an ‘oil man’. I entered into water industry by accident. I first made one for myself and then later decided to take it to people at large.
You must have had similar feelings in case of your children…
Of course. See, when you are young there’s more energy. You feel you can take a walk in the space. As you grow old, you are more bound by fears since you’ve seen life and tend to be calculative about the damage. When you are young, you have nothing to lose!
Who was your biggest supporter back then when you were on the verge of turning an entrepreneur?
My wife. She realized that I have certain ambitions in my life and she allowed me to fulfil them. My parents had fears and those were genuine at their level. They wanted my stability.
why did you quit job at Indian Oil? Weren’t you scared?
Why? Why should I feel fearful? Should I have been scared of not getting another job? I am not afraid of anything because I know I can deliver. Who is taking care of you in this world? The almighty isn’t it? Then why worry. Just leave it to HIM.
You are a first generation entrepreneur. Didn’t you have apprehensions while leaving the government job at Indian Oil Corporation?
No. My family was concerned. They were too much worried on my decision to leave a well-established job at a time I was doing well. They never wanted me to quit.
The GST Bill has been passed by the government. Has it affected the water purifier industry?
I believe everyone should have access to clean drinking water. This is not just a want but basic need. Currently, we pay 6% excise duty and 13% value added tax making it total 19% in taxes. We let the government be the best judge on this, they know better.
What are your expansion plans?
We are coming up with a new manufacturing plant in Greater Noida with an investment of over Rs 100 crore, which will double our production. This new plant in a 25,000-meter area will be ready by the end of this year and will start producing our patent products in 2018. For the first year, we believe that our sales would go up from 800 crore to 1,100 crore after this plant starts production.
Which new products have been launched by the company? Where are you focusing apart from the water purifying now?
We have recently launched a new water purifier with zero water wastage, with our patented technology. The in-house designed technology product Kent Supreme ensures zero wastage. Current water purifiers waste 80% of water, but this new technology reduces it to 50%, and for the remaining 50% we have inbuilt an extra tank from where water can be used for other household purposes. This is only Rs, 1,000 more expensive than the current water purifiers. We believe in the Drink Pure, Eat Pure and Breathe Pure mission and thus, have launched a series of new products including air purifiers, cold press juicer, vacuum bed cleaners, veggie washers and noodle pasta maker.
Where does Kent RO stand in the water purifier industry? How has been the growth?
About 65% of water purifier business is an organised industry with a 3,500 crore size. Kent is the leader here and holds up to 35% of market share. Demonetization affected our business as we had expected a 25% growth, which only came to about 15%.
What is your focus on shopper research in your segment? Any insights you can share? How do you use these insights in your retail activities?
We use shopper insights to offer better service. Often consumers do not understand the rationale behind regular quality service and maintenance. They don’t realize that it is for ensuring the filters run properly, you get pure water and the life of the RO water purifier is preserved. In Ignorance, consumers often switch to cheaper and local filters which do not yield the desired results. Also, there are fake and cheap alternatives available with local service providers, which although cuts down the cost in the short term, proves to be more expensive in the long run as it totally damages the RO purifier. The 4 year warranty on Kent RO is a step to tackle and encounter the current issue.
In retail what are the factors you focus on – store design and layout? Activations and shopper engagements? Sales staff training? Can you elaborate?
Well, every brand speaks high of itself, but trust develops when an accredited certification body endorses the product/brand. In the case of the water purification industry, laboratories of international repute, like NSF, WQA and more recently ISI, have certified our product for its quality and efficacy. And this is how we connect with our consumers. This is supported our customer service which ensures complete reassurance to our customers. The company offers a 4 year warranty on the Kent RO product. We also spend a lot of time and money on sales staff training which is crucial, as product knowledge is extremely crucial to connect with the consumers.
Take us through the retail journey of Kent RO? How many outlets are you present at? What kind of retail formats do you have?
Kent RO has a vast network of 600 distributors 1,000 dealers and 1,000 retailers. Besides, Kent has opened up 150 exclusive ‘Kent shops’ through the franchise model in key cities of India.
What is your reading for the changes of Indian Economy?
What are the 5 suggestions you have given to the Ex-finance Minister Arun Jaitley?
Can you explain what is the health of MSME Sector?
What are the challenges faced by macro small and medium enterprise?
Now 85 of your businesses we understand comes from retail accounts, where you have a dominant share of 30% at what rate is the retail and anti-virus market now growing versus the category for you and with a strong distribution network what market share are you eventually aiming at?
At present i believe we are somewhere around 30 to 33% market share in India. If you are talking about the anti virus retail market growing percentage. I really do not know that part of it because usually the surveys are done by the media people and they come out with these kind of figures which recently we have not come across any such figures.
What metrics should brands use to evaluate the association with IPL and measure the success of their other IPL marketing initiatives?
Every brand has their own story to say. I don’t think I can generalize their story since each of them is formulated with a different objective. Some brand might like to launch a new product while the other must want to create awareness. Whatever be the objective of the campaign would determine the parameters of their measurement metrics. As long as their objective is being achieved their efforts are paying off.
Which campaigns as per you are some of the most impactful ones on IPL? Since your brand has invested in IPL over the years, please share the objectives of investing in IPL and how successful has this association been?
I don’t think I liked any campaign specifically. I like the ads where Hema Malini spoke about our product. We had associated a team when IPL began in the initial years. But the team didn’t perform very well. Our personal experience of associating with one team didn’t go too well. Having said, that IPL is a great opportunity for brands to leverage in line with their marketing objective.
What is your view on how can the brands ride upon the unique opportunity that sports genre offers?
They offer many opportunities to brands – for instance, if the brand is associated with one of the teams, there are various touchpoints that they can use to communicate with their consumers. Depending on their budget and objective, brands can create various initiatives like behind the scenes, sneak peeks and player interview snippets to engage with their audience on a better level. For instance, if you’re advertising on television you will reach to a different kind of audience, if you’re creating a presence on-ground you will reach to a different kind of audience. Extending your communication to different platforms over the years isn’t an issue as long as your objective is clear.
How do you think brand custodians can become more creative in leveraging and making their brands stand out among the clutter?
It’s an ideal platform to invest. Exams are about to get over, adults are invested in IPL, all this make the platform very conducive. India has only two religions – Cinema and Cricket, always remember that and create your media mix and marketing mix accordingly. There is also a growing focus on non-live content around IPL as fans are getting to see facets beyond just the live match. Auction, Pre/ Post shows, building team rivalries pre-match, behind the scenes etc.
How can the marketers leverage the IPL in its new avatar differently over the previous seasons and gain maximum value?
IPL is expected to have the highest number of eyeballs this year. Since it is being aired on Star TV it is going to be available in many local languages across channels. The rating points are now much better than the earlier times, this gives brands ample opportunity to innovate. Although the cost might be high, there are many options for brands. They can create content in various languages to target audience of various centers. IPL is just like a Diwali or a Christmas. It is no less than a festival – where families sit and watch it together.
What is your education background?
I am Mechanical Engineer graduated from IIT Kanpur and alumnus of Indian Institute of Petroleum, Dehradun