Dr. Mahesh Gupta, Chairman & Managing Director, Kent RO, shares the light-bulb moments, that made Kent the leading RO Purifier Brand in India
In the 1990s, IIT Kanpur graduate Mahesh Gupta went on vacation with his family when both of his kids suddenly fell ill. The children were diagnosed with jaundice because they unknowingly drank contaminated water. The 90s were a period when the water purifier market was hardly even in existence in India. Dr. Mukesh Gupta turned tides in the face of adversity and made the best of all opportunities that came his way to start Kent RO systems. Today, Kent is the largest manufacturer of RO systems in India and has an array of ozone-based food and air purifiers as well. Here are the excerpts from an exclusive interview with The Electronics.
Please tell us about your formative years. What were you doing before you started Kent RO systems?
I completed my graduation in Mechanical Engineering from IIT Kanpur in 1975. After that, I enrolled in the Indian Institute of Petroleum (IIP), Dehradun for my Master’s. I started working as an engineer in Indian Oil Corporation in 1977. In 1988, I started my own company for manufacturing instruments for oil conservation. It was a risky business, but I was doing well. I invested Rs 20,000 from my savings and started the business from my backyard. We called it SS Engineering Industries. We went commercial under the brand name Kent Oil Meter in 1992. It is still carrying on successfully in the market.
You mentioned that you started Kent with Kent Oil meter for manufacturing instruments for oil conservation. What led you to pivot to RO systems? Did you see a need for RO systems in the country?
In 1998, I went on a vacation with my family, and my children got seriously ill. They drank some contaminated water and got diagnosed with jaundice. I realised that clean drinking water is a luxury in our country. I started researching and found that only UV water purifiers were available in the market. UV does not remove the particles dissolved in water. After extensive research, I figured out that the process of reverse osmosis (RO) could tackle the problem. RO is a process of water purification that uses a partially-permeable membrane to remove ions, unwanted molecules, and large particles from water. It can remove different types of dissolved and suspended chemical and biological contaminants from water.
I decided to design a purifier for my own house and imported a few components like the membrane and a pump from the US. Regularly trying and testing my designs, in about three months, but the resulting product was right. That’s how Kent RO was born.
How was the initial response to the product? The early 2000s was a time when RO systems were unheard of in India. What were the challenges that you faced when you started?
Spurred by the product I had designed for my house, I decided to manufacture and market it to consumers and get into the water purification business. People called me crazy since the cost of these purifiers was so high that it was a given that no one would buy it. A purifier came for about Rs 20,000 while a gravity purifier was available for a maximum of Rs 4,000. I was getting good feedback, but nobody was actually buying my product. The first month, I hardly sold two units. The first year, Kent managed to sell only 200 units and only a few lakhs in sales. I faced much competition from established brands selling conventional water purifiers. We were able to outbid them because of our superior technology. Further, I met some issues with permits and also because of lack of capital.
So When did things start looking up for the company? What measures did you take to attract the consumers?
I had a slow start with Kent RO. The purifiers were too expensive. People were willing to pay that price only for a fully-automatic washing machine. I realised it was not enough just to build a product. I had to convince people that they needed an RO water purifier. People wanted clean and safe drinking water and did not want to deal with water-borne diseases. With its advantages over UV filtration, RO purification seemed like the best bet.
I attempted to keep the cost under control and make my product more accessible.
By 2005, we realised that to make the product work, we needed to get serious about advertising and marketing. We required a well known, famous star, and a mother to advertise and we zeroed in on Hema Malini for the same. Initially, we only had money to run print campaigns. By that year, we had expanded to other metros, and mass media campaigns had started to work. We set up a manufacturing facility in Roorkee, Uttarakhand and started connecting with distributors, dealers and retailers. The entire country began to know Kent as a brand, and we clocked revenues of Rs. 30 crores that year.
Kent dominates with 40% market share in Water Purifiers. You’ve expanded into manufacturing kitchen appliances as well. Any plans to expand into more product categories? Where do you see Kent in 10 years?
We hold 40% stakes in the RO systems market. We have also diversified into making products like a Vegetable Cleaner, Vacuum Cleaner, water softener, air purifiers, security cameras and many more. As of now, our area of focus is to improve our current lineup of products. We have started Kent House of Purity. Water, Food and Air; these are the areas which test the health of the people. We want to be in that space. We want to offer our customers the most innovative products at economical prices. Our prime focus will be purity in a home. Today, my business has a turnover of 950 crores. For the last six years, we have continued to grow at a rate of 15% annually. We want to keep that. We missed our margins of 1000 crores because of the COVID-19 situation; the national lockdown from March affected our sales.
What percentage of your revenue goes into product innovation? And what about marketing? Do you still need to inform the consumer about your products?
I believe that brand building is not a one-day exercise. It’s a long term exercise, and we need to continue communicating with our prospective consumers. We must keep our investment when other people are not doing it because that is the time you get better visibility, and that is what we have done. 10% of our revenue goes into the marketing of our products and another 10% is used to look out for constant innovations. I believe innovation can be in any field. Our marketing campaigns have been very innovative and useful, and we plan to keep improving upon it.
Consumers nowadays want to know the country of origin of a product? How much of Kent products are Made in India? Do you export outside India as well?
Talking about RO systems, Kent owns three state of the art manufacturing facilities in Roorkee and another one in Greater Noida. I can say that 95% of our products are manufactured in India. We are only importing a few parts like the membrane filter from the US. We are looking to build Kent products 100% in India soon. We have our presence in Bangladesh, Sri Lanka, Kuwait, Nepal, and we have entered the GCC market as well. We are looking to double our exports while continuing to maintain a strong presence in the country.
Is there an increase in sales because of COVID-19, since people are more aware of the benefits of clean water. What is your expected turnover for FY21?
We lost the first two months of this financial year because of the lockdown. There were no sales. With shops reopening, we have experienced pent up sales. These can be the consumers who already wanted our products but couldn’t buy because of the lockdown. It’s too soon to say and we don’t believe in forecasting, but we are facing a 20% dip because of the initial lockdown. These are very trying and uncertain times. We have to be careful and protect our businesses this year. Protection is the key rather than growth.
Which platforms do you use for your sales? Are you just selling to consumers or do you sell B2B as well?
We are mainly a B2C company with a small presence in the B2B segment. B2C accounts for 90% of our revenue and is our prime focus.
You are amongst the few first-generation entrepreneurs in our country. What advice do you have for new-age entrepreneurs looking to build a business?
Entrepreneurs have more opportunities today than when I started. They must believe that there are good times in the future for them. The purpose of a business is not to just earn money but to provide value to the consumers. If you believe in yourself, then success will be in front of you.