Hansgrohe's Luxury Push: Plans Strategic Shift in Indian Market
Hansgrohe's Luxury Push: Plans Strategic Shift in Indian Market

Hansgrohe India, a subsidiary of the German Hansgrohe Group and a global player in the bathroom and kitchen industry, is aiming to grow its retail footprint to 500 stores by 2025. With 90 percent of its revenue coming from the bathroom category, the brand is enhancing its strategies towards the B2C segment in the country. With a strong focus on luxury homes and hotels, the brand is leveraging the wave of premiumization in India.

The Hansgrohe Group has collaborated with top designers globally, such as Philippe Starck for the AXOR Starck collection, Phoenix Design for showers and faucets, Nendo for the AXOR LampShower, and Barber & Osgerby for the AXOR One shower control, among others. With its presence in over 150 countries, the German brand has increased its brand reach and revenue in India since its launch as a full-fledged subsidiary in 2012.

Growing in the B2C Space

Hansgrohe India initially focused on real estate developers, architects, and designers. However, the brand is now expanding its reach in the B2C space with tailored communication strategies for Indian consumers living in tier II cities.

In an interview with IndianRetailer.com, Gaurav Malhotra, Managing Director of Hansgrohe India, spoke in-depth about the brand’s growth in India and its expansion plans.

Discussing the B2C strategy of Hansgrohe India, Malhotra said, “We sell our products via a trader, which is traditionally called a B2B perspective. We have never considered ourselves a full-fledged B2B business. We make sure that our brand is visible to the consumer. We are not directly engaging with the consumers, nor is our core communication strategy.”

Elaborating further, Malhotra added, “But when we work with the traders or look at establishing our retail presence in multiple stores across multiple cities, ultimately the brand comes across to the consumer. So, the product that we sell to the trader is sold as it is to the consumer.”

Talking about the brand’s communication strategies, Malhotra said, “We emphasize product innovations and our work with various designers. These communications are accessible to all consumers, and as we move forward, we want to increase our direct engagement with the consumer and maybe at some point even look at a channel where we actually sell.”

He further stated, “We are looking at adding more than 100 POS every year in various formats. We are definitely looking at increasing our retail footprint from 235 to maybe 500 in the next three years. There is ample opportunity right now in India, and we are not just penetrating in new cities but also in the existing cities together.”

 

Connecting with Consumers

Hansgrohe India contributes around 2-3 percent of revenue to the global group. With an aim to expand in tier II cities and the hospitality sector, the kitchen and bathroom brand has a presence in top hotel chains across India. Mumbai is the top revenue generator for the premium brand, with Delhi and Bangalore following as the other leading revenue-generating cities.

Discussing the sales strategy in the Indian market, Malhotra said, “In India, we do not see selling to a consumer directly, similar to what our competitors in the market do. At this moment, we do not have visibility of entering direct sales of our products. But I believe it is about communication as well. So our strategy would be to target consumers via our communications through multiple mediums.”

When asked if Hansgrohe is planning to enter the retail space, Malhotra replied, “For now, in the short term or maybe even medium term, we do not see that switch completely. India is a very dynamic market. Every year we continuously reevaluate the situation. But in the immediate short term, we do not see a move to that for now.”

Premiumization Wave

According to a report by JLL India, the luxury real estate market in India experienced a remarkable increase in the sales value of luxury homes priced at Rs 50 crore and above, surging 55 percent in 2023. The total deal value of luxury homes surged to Rs 4,319 crore in 2023, a significant increase of approximately 51 percent over the value of Rs 2,859 crore worth of luxury homes recorded in 2022.

When asked if the brand is leveraging the wave of premiumization in India, Malhotra said, “We classify our products across multiple categories such as our luxury brand AXOR and then we have our best segment, better segment, and a good segment.”

He further said, “We have seen both consumers and developers moving towards our brand, and the confidence we see in developers for our brand is tremendous. The net realizations from the end consumers have increased, and we them having more interest around having a premium brand at their homes. From the consumer perspective, the demand for our premium launches is growing, and we are elated with this trend.”

With 90 percent of its revenue coming from the bathroom category, the brand is enhancing its strategies towards the B2C segment in the country.

Revenue Growth

In its April 23, 2024, annual release, Hansgrohe Group released its financial report for 2023, showing a total turnover of €1.406 billion in 2023. Compared to the previous year (€1.550 billion), this represents a decline of 9.3 percent. Adjusted for currency effects, turnover was 6.2 percent below the previous year. Markets such as Turkey, India, Mexico, and the regions of Southeast Asia and the Middle East showed extremely positive developments.

Talking about the growth in the Indian market, Malhotra said, “From a perspective of the last five-year period, our business has quadrupled. That is a fourfold increase. In 2018, we were in 13 cities, and today we are in more than 100 cities. From a number of stores, we are present in more than 230 stores across the country.”

He further said, “I think there is a lot of progress and a lot of share gain that has happened. India contributes closer to 2-3 percent of global revenue. Our last six-year Compound Annual Growth Rate in sales is more than 40 percent. Going ahead from a long-term perspective, we expect double-digit growth in the Indian market.”

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