Changing Customer Expectations
As an innovator we are constantly bringing new trend products to the market for which we find increasing acceptance amongst our customers. Particularly in Kitchen Appliances we are seeing huge interest for ovens and even steam ovens which have not been traditionally used in Indian cooking in the past. So, food preferences and cooking is definitely changing in India. Also our engineered stone products like “Caesarstone” and “Dekton” have done exceedingly well as customers are moving away from traditional options like granite and marble. LED lighting in which Hafele is one of the global pioneers, is one of the ranges which has been exceptionally well received in India. Also Häfele’s recent move into the highly competitive field of bathroom products is starting to show results.
E-commerce is one of the biggest challenges in a geographically complex market like India. We have therefore invested very heavily in the back-end of our operations nationally. We have now 4 warehouses in India, large technical support teams across different product verticals, professional customer care operations, upgraded our ERP systems and focus on digitalization in all our processes.
Customers have become increasingly demanding in regards to instant product availability and outstanding service levels. This trend is largely driven by the excellent logistics performance of e-commerce companies which have set the standards to which all market players are now held.
The product offerings & marketing strategy:
Hafele has always positioned itself as the One-Stop-Shop for all interior fittings requirements. Initially we started out as a supplier of door and furniture hardware to the hotel segment then got involved with kitchen fittings leading to kitchen appliances and later sliding products for all possible applications, LED lighting, engineered stone and bathroom products.
One thing essential for continued success in India is the comprehensive market penetration. We are now reaching our customers through more than 4,000 physical outlets and will continue to expand to more parts of the country. Also, we cannot ignore the rise in popularity of e-commerce and we will have to formulate strategies on how to change our business model to react to a rapidly changing market environment. Also further investments in world-class logistics, customer care, digitalization of processes and online marketing tools will play an important part.
Clearly architects and interior designers are some of our most important collaborators and the main influencers in the market. We have over the years developed very close relationships with these communities and are continually investing in these relationships. It is nice to see that we are slowly, if not entirely, getting away from being seen as a vendor and more as collaborators.
Challenges& potential for the company
As mentioned, e-commerce is changing the business environment and with that, customer expectations are changing fast too. Also once players like IKEA enter the market place in India the change will come very fast and Hafele has to be ready. This will require some dramatic changes in the way our business model develops and how we position ourselves in the market. We will also have to become much more agile in the way we make decisions and implement them.
Even in the absence of reliable statistics I can say that the potential for our products and services is enormous. The new India is only emerging and there will be construction and upgradation happening for many years to come. Hafele will launch a whole bunch of new products in 2018 in the door hardware, appliances, electronic locking solutions and home automation as well as exciting new LED lights to name just a few.
We will continue our market expansion through our outlets, open more exclusive Hafele franchise shops and more Hafele owned Design Centers are also on the anvil as well as the upgradation of existing ones. There will be more investments into our back-end operations to ensure that we can cope with the demands of our customers.