VERIFY MARKETS INTERVIEWS SHIRISH NANDAN OF NASAKA
Mr. Shirish Nandan is the General Manager, Sales and Marketing, for Okaya Power Ltd of (Microtek Group) with 16 years of experience in various sectors like consumer durables, healthcare industries & concept selling. He has been instrumental in successfully launching the Kent RO systems in eastern India and then Nasaka brand of water purifiers in Pan India. Owing to his vast network and Pan India exposure. He currently has a host of responsibilities at Okaya and is actively involved in the strategic development, product design and other key responsibilities of the Marketing division.
What are some of the trends that you see in the water purifier space in India?
The current trend we are seeing in the Indian markets is that customers are moving from offline systems to RO systems. That’s why the sale of offline systems is on a decline; they are not great or effective for our market. This can be attributed to the fact that the customer awareness is more than what it was 3 years ago. The other trend I noticed was that customers are ready to buy good RO systems, irrespective of whether it is branded or otherwise. In India, as of now, there are an estimated 1,000 companies in the RO water purifier space on national and regional basis. RO systems are available from Rs. 7,000. Customers now have a thorough understanding of the equipment. Also, local manufacturers are convincing them that they are using the same components that the top branded companies use, albeit their prices are still more affordable, thus the sales are higher. The purifier market relies on relationship-selling and it is a push product. It has to be pushed to the customers. The unorganized sector is a lot bigger than the organized one, and it has picked up over the last couple of years itself. These are the two trends which I see in the current market.
We have been noticing a decline in storage/offline types of water purifiers in India. Why do you think that is happening?
The main reason for this, I think, is that the level of fluoride and arsenic in the soil is increasing manifold in states like Punjab and Haryana, amongst others. Therefore, the quality of water is getting deteriorated with the TDS level and is also increasing mostly in metro cities like New Delhi and Mumbai. Here, the TDS levels have gone up to 2000 units. In cities like Faridabad in Haryana, customers cannot use Offline water purifiers because the water quality is bad. In 2009-10, customers were not ready to pay Rs. 15,000 for an RO unit, but now there is so much more awareness and health consciousness amongst customers that they don’t mind shelling out money. As a matter of fact, people nowadays buy an RO purifier first, in the interest of their families, and then spend on other home appliances.
We have been seeing a spike in RO technology in India over the last few years. What is the reason for that?
Firstly, it is because of the awareness that the customers have nowadays about the importance of RO water purifiers. Apart from that, they have become very conscious about health and fitness, which only makes our job easier since they are voluntarily purchasing the equipment.
Companies have been talking about a huge growth in India water purifier market, however, over the last few years the growth hasn’t been that significant. Do you agree? If yes, why is that happening?
I agree with this and I think the reason for this is that in the past 2 years, the market has been polarized. There were only branded and unbranded previously. But, in the last 2-3 years, there are so many companies selling their purifiers that the customers are now confused about which product are best suited for them. There are so many choices like Local RO, UV RO, and Branded RO, etc. Although the sales are increasing, the company sales are decreasing in the Branded sales market. That polarization has been brought in by the awareness created. When I speak to a customer or a retailer in smaller cities or towns, they have full knowledge about the equipment, so much so that they ask us what type of membrane are we using and things like that. The customer knows that if they purchase an RO worth Rs. 5,000 they will get the same material for which other companies charge maybe around Rs. 15,000. An educated customer suggests to his friends and family to not go for a branded RO, instead to opt for a local RO, which is cheaper.
Do you find high end or low end water purifiers popular in India? Why?
I think till about 2010-2013, the high end purifiers were more popular. Their prices ranged between Rs. 15,000-21,000. This was the trend in the Metro cities at least i.e. Delhi, Bangalore, etc. But, since the end of 2014, the market has seen a change in trends. Now, even the educated customers are going for non-branded, locally manufactured purifiers. This is a very different trend that we are noticing, even at the bottom of the water purifier industry. Another reason that I can see is that there is a certain section of people who are using bottled water in large jars of 20 litres and they do not want to purchase an RO system. They are satisfied with the jar since it is Rs. 30-40, depending on the area and the quality of water. A major chunk of customers in Delhi, NCR, etc., are still using the jars.
There is also one other section of people who do not believe in purchasing RO systems; they argue that the RO systems take away the water’s essential minerals and that is not good for health.
Which technology do you anticipate to be popular in the water treatment space in the next 5 years in India? Why?
For the next 5 to 10 years, RO will definitely enjoy popularity, in terms of technology, and the sales will also increase. But, the prices will be ranging between Rs. 8,000 to Rs. 10,000, which is a decline from current prices. Secondly, many new housing societies in India are coming up with RO plants. They are advertising that an RO plant is going to be provided. A single plant can cater to 5,000 apartments as well. There are societies like these in Delhi, NCR and Gurgaon, where such plants are functioning and doing very well. Societies are setting up a plant and charging a nominal annual fee for it, which maybe between Rs. 100-500 per month. This is still much cheaper than setting up RO equipment at home and paying for its maintenance, etc.
What are some of the challenges companies face in the water purifier business in India?
The biggest challenge this market is facing is that the after sales service provided is very problematic. Companies usually give sales franchises to local dealers, since they try to save costs of opening up service stations and employing people there. That is where the problems start. These service franchises do not provide good, timely service to customers. Another regular complaint we receive is that genuine spare parts are not used while repairing, but they are charged for genuine parts. These franchises are making a 100% profit on the parts, which is unfair to the customers. This is one of the biggest challenges we are facing.
Secondly, we are faced with this challenge of, ‘How does a company push its product as the best in the market?’ given that there are so many competitors now. People are not completely aware of the RO process and the ignorance ends up in generalization of the technology and the company. This may sometimes hurt a company’s prospects, as retailers will also push only those products which offer higher margin to them.
Also, we have to compete with the unorganized sector, which is selling the products at a much cheaper rate than us, coupled with the fact that this is a customer-relationship driven market. Customers are drawn to the cheaper products, which claim to use the same technology and same parts.
Could you tell us about Okaya Power Ltd’s water purifier product offerings?
We have unique offerings through Okaya Power Ltd.; our brand name is “Nasaka”. Our main focus is the quality of our product and our customers are extremely satisfied with our product quality. Our strength is that we have minimum complaint level. We have almost complaint-free products. Our company, Okaya Power, Ltd., is the market leader in the power sector. We have “Microtek Inverters” which are Number 1 in PAN-India market. Another USP of our company is that we are the only company who is directly providing our own service engineers who are on company payroll. We do not have a franchise or a service franchise. Although it costs us a lot to maintain service engineers, we still do it because we believe in doing this. We have more than 400 service engineers in PAN-India for invertors, as well as water purifiers. Therefore, the customer is completely sure that they will not be cheated for their money. Our engineers use only genuine spare parts, so we have negated the risk of recurring complaints from the customers.
Secondly, Nasaka has a stage 12 model, which is extremely popular in India. In that, water is purified through 12 stages and it passes through the membrane and a mineral cartage, purifying it completely. Nasaka also provides a 3 year free service to customers, which no other company is offering. In the first year, the service and spare parts are completely free of cost. In the second and third year, all the services are free and spares are chargeable. These are our unique offerings.
When was Nasaka water purifier launched in India? How has the growth been in the last few years?
It was launched in late 2010, so it has been around for almost 5 years now. Since we are originally from the power industry, our focus was that market. But, since last year, we have started focusing quite seriously of the water purifier sector. We are currently preparing to take a mega growth in this market. Over the last few years, the growth has been stagnant, at 14% to 15% year-on-year. In the market comparison, we are on the growth side.
Service is a key component in the water purifier market in India. How does your company provide after sales and services?
We have around 400 in-house service engineers PAN-India, and we have a branch office in every major city. When the complaint is logged in, we provide service on the same day. Also, we have software where in our service provider judges if a spare part has to be changed; is there any actual need to change it at all? There are no arbitrary changes in spare parts, since he will do so only after consultation. This is bringing complete transparency into the after sales services. Apart from this, we also have online services in which customers can book a service appointment at their convenience.
How do your products differ from competition?
The major difference is in service. All other brands in India are providing one year free services and we provide three years free service. Another reason is because we have a completely complaint free product. Our customers are extremely happy and satisfied with our product because it is so durable. We use only high quality components, which is why our products are durable. Also, Microtek enjoys a good reputation in the Indian markets; we are leveraging our purifiers on its brand value by displaying its name.
What would you say are some of the strengths of your company that differentiate you from competition?
Our strength definitely is that we have a customer-centric policy and everything we do, we always first think about them. The customers are the focal point of our growth and they have confidence in us.
Where do you envision Nasaka water purifiers in the next 5 years?
I envision Nasaka to be amongst the Top 2 companies in the next 5 years in the Indian market. We plan on launching 4 to 5 more products early next year, some of them in the LED space as well. For 2017, we are even looking at the water softeners business and the industrial water business as well, but these are still in very nascent stages.