Through its partnership with Germany-based brand Nobilia, H&R Johnson provides premium kitchens with high end fittings and hardware solutions in India. This year, Nobilia has set some new market trends by launching various kitchen finishes like marble finish in shutters, full steel kitchen shutters with two side edge biddings, teakwood kitchen shutters with black metal handles, customised units, units for freestanding washing machines, unit for freestanding microwaves, waterproof sink base cabinets, waterproof kitchen countertops and water-resistant kitchen shutters. Rahul Shrivastava, General Manager-Kitchen Division, Prism Johnson (Nobilia), shares more on the partnership and market scenario with SHRIYAL SETHUMADHAVAN.
Tell us more about the H&R Johnson and Nobilia partnership.
H&R Johnson is a pioneer in tiles for decades. The company is also into marble, sanitaryware, quartz and kitchens. The kitchen is a product as well as a concept. The business is completely different as it involves design and many other things. We started the business in 2007 and associated with Nobilia the same year. However, initially, we did not use the Nobilia brand name in India. We called it the Johnson imported series (for the classes) and we had another series (for the masses) called the Johnson Kitchen, which we are procuring locally. Back then, the market was not mature and acceptability of the modular kitchen was lower. But, eventually, the market started maturing and the B2C customer started understanding the product. Then, in 2013, we revamped the kitchen division with the thought of giving it a special identity. We decided to use the name ‘Nobilia’ for high-end, luxury kitchens and initiated exclusive Nobilia stores in India, with great success. From being popular as a tile company, the customer started associating with Johnson for its Nobilia Germany-based brand as well. Last year, we decided to focus on retail; in 2019, we aim to reach the market more aggressively, targeting builders, interior designers and architects.
How competitive are Nobilia kitchens in terms of pricing and what differentiates you from competitors?
Nobilia is a mass manufacturer. Till today, it is manufacturing 3,000 kitchens per day, in which 30 per cent are exported. What keeps us ahead of competitors, first, is this German quality, where the best hardware (Blum hardware, grass hardware, etc) available in the world is used. Plus, their raw material procurement cost is lower than others. So, here is a German product available with high-end technology and at a lower cost. In India, H&R Johnson is present across the country with our own godowns and offices. So, we have not created any additional infrastructure for Nobilia; we have just added this product line within our existing system. So, there is no overloading on this product from the Johnson side. This is value for money, which keeps us ahead of competitors in India who have to create their own warehouse and manpower, and pay additional overloading charges.
Who is the target audience for Nobilia?
For Nobilia, there are two businesses: The retail business for individual customers and the builders and developers. We approach builders directly; owing to the Johnson brand, we have an existing relationship with them. For the retail customer, we have our franchisees; 80 per cent of the retail business comes from the specifiers.
Will House of Johnson have Nobilia in its showrooms?
No, Nobilia is a standalone showroom on a franchisee model with a separate identity because the target segment is different. At present, we have a showroom in Chennai, one in Pune, one in Mumbai under renovation, and one in Ludhiana. We are planning to double the showrooms by March 2019.
How do you see Nobilia contributing to the overall growth of H&R Johnson?
At present, Nobilia’s contribution is negligible, as tiles form the major part of the business. This is a niche and aspirational product; its contribution will not add much to the turnover of Johnson. What is significant is that this is an established segment with a standalone reach for a particular segment and fraternity, and that Johnson is offering this product.
How do you see the growth opportunity for this industry in 2019?
The market is growing at about 20-25 per cent. Generally, we also grow at a similar rate. But with demonetisation and RERA, there has been a shift in stock and a slight slowdown. As our offering is a finished item and not an essential one, people have the liberty to delay the project for a few months.
What is your vision in terms of market share?
Our target is to be the leader; we are targetting around 30-40 per cent market share in the next three years.