A successful network of distributors is by far the most preferred model of marketing and sales opted globally by those in the cleaning business. How different is the distributor model when it comes to India? Mohana M discusses the international perspective, the Indian requirement and the expectations & shortfalls of this model.
INDIA IS largely viewed as a potential market for international companies to establish and expand successful cleaning business. Supplier-franchise partner distributor-sub distributor chain has worked well, especially in India, where we have some of the giants who began with suppliers and today have successfully established their own local set up.
Most of the manufacturers from Europe, America and the UK prefer to join hands with established suppliers while some from Germany and Italy are looking for technology transfer or setting up a JV for manufacturing in India. There are manufacturers in India who procure certain components of the machine from international producers. They too are looking at JVs to produce for international partners in India. Of late, manufacturers from countries like Turkey and Qatar too are making inroads into India. Operationally, both variations of the distributorship model are different, but the common factors in both include getting the right distributor or manufacturer and establishing a local sub-distributor network.
There is also another model being implemented whereby an international company is setting up multiple regional offices for marketing and sales besides appointing sub-distributors. The sustainability and success of this model is now in the wait-and watch mode.
Quality Products
“Getting the right partners” forms the foundation, and quality products and business strategy form the structure. Supply of right cleaning products, the volume stocked and timely availability of spares are other common prerequisites of distributors in India. “Everything is based on trust and transparency. There are cases where the product that we get to see of the principal company is different from what is sent to the supplier in the consignment. This should not be the case,” voiced a concerned distributor.
“No business can grow without the complete support of the principal company. Our partners offer periodic product training, personally be present when we bag big orders and customize products according to customer needs,” Manjunathan M, Proprietor of Clean Care Systems said.
Customization
Unlike European standards of “fit for all” products, India requires customization of products from industry to industry. The variation and application of the same cleaning product differ in each industry making it inevitable for the principal company to essentially understand the requirement of the end user and customize the product for best cleaning results.
“Many a time, the product delivered by the principal company, even though is in keeping with the specifications desired by the end user, the product fails to perform on site. This is basically because the products are made for European usage and fail on Indian grounds.” Several distributors are of this opinion.
This is true in many cases, as some of the facilities that are in operation for a long time are structured differently and European-made cleaning products do not perform well on site unless they are customized. Most of the modern facilities to a large extent find the European products suitable and require minimal customization for quality results.
Spares
One of the most challenging and pressing issue faced by 90% of the suppliers of international products is in delivering spare parts in time. Delay in getting the spares has dampened the Indian consumer, impacting adversely on the brand itself. “Rebuilding trust in the client is very difficult.” Suppliers, thus are skeptical about taking dealership of certain cleaning products that may require frequent spares. “If it is not an electrically driven product, there is not much of an issue. The problem arises when we supply electric products which require enough service back up and spares. Timely availability of both is important to retain consumer confidence,” Shailender Singhania, Proprietor of South India Marketing Agencies explained.
Margins
Distribution is a margin business. International products entering India attract duty and the margins set over and above that escalate the prices, much above Indian consumer convenience. High priced European products have adversely affected the Indian consumer pattern, with many opting for short life low-cost products. “Manufacturers should look at making products for India at Indian affordable rates. It is only then we can successfully sell these products and in larger volumes.”
Branding & Advertising
Indian consumer pattern is unique but it also gets highly influenced through peer pressure and popularity which are largely driven by visibility of the product, branding and presence in strategic places. “Any kind of promotion of the product by the principal company will be a great help.”
A network of distributors no doubt reaches a larger geographically dispersed consumer base, but they require support to popularize the product. “For example, distributors can add value to products by customizing them or adding specialist services or support but unless this is conveyed to the end user widely, we cannot create popular demand.”
Indian Requirement
Sarvajit Singh, Proprietor of Indo Technologies, felt that “Quality does matter but at the same time, products cannot be sold at dollar rates in India. A product cannot be priced at dollar cost price converted into rupees plus custom price. The product becomes unviable. This is one of the reasons why Chinese products are opted over European brands in most cases.
International companies entering into India, should do so with a long term perspective. Appointing a distributor and expecting results within a year is one of the major drawbacks highlighted by distributors. “Anyone entering into India should move step by step and it takes a minimum of three years to expect any results. India is not only a price sensitive market but is also very choosy and particular. It takes time to convince the consumer.”
Extensive training is a must for success. “Floor cleaners are fairly simpler to understand and so are mops and other tools but with products like ride-on, etc., require hand holding and multiple training sessions.”
Presence of the international company directly or a subsidiary office, builds the consumer confidence on the product.
In conclusion, the distributor model itself has to be customized to suit the Indian consumer with reference to the kind of product being marketed. Today, with the Indian government’s single window clearance and financial support for startups, suppliers are looking at options of technology transfer or setting up of production unit on an international partnership. “This will take care of everything right from product confidence, spares, customization and above all price.”