It’s not often that we find a brand’s name that is synonymous and represents the entire category. One such brand in India is Eureka Forbes and its water purifier brand Aquaguard.
Commenting on this, Anurag Kumar, Chief Growth Officer, Eureka Forbes says, “It is a great asset that we have. We've seen in survey after survey that we have more than 60% top-of-the-mind awareness, which means that our brand is the first brand which comes to your mind consistently across years. This allows us to develop the category. We have Eureka Forbes as the corporate and consumer facing brand and have built unconditional trust and acceptance over the years across our categories.”
Looking at the first nine months of FY25, Eureka Forbes businesses saw double-digit growth of about 12.4% on gross revenue and a 60% growth in profit after tax. Kumar says, “Our overall revenue consists of two streams - product revenue and service revenue. Across our multiple product categories - water purifiers, vacuum cleaners, air purifiers and water softeners – we’ve seen significantly high double-digit all-round growth.”
Coming to the product revenue, 70% comes from the water business, 20% from vacuum cleaners, i.e. the core categories contributing 90% with the smaller categories - air purifiers and water softeners, contributing the remaining 10%. Looking at the service revenue, this primarily comes from the water business which is a highly serviceable product.
Eureka Forbes’ Media Strategy
Commenting on Eureka Forbes’ media strategy Kumar splits the media clearly into two parts – Above-the-line (ATL) and branding; and Below-the-line and performance marketing. Further dissecting the first line of marketing, 60% of the marketing budget is targeted to traditional media, largely Television and to some extent on Print.
The remaining 40% is spent on Digital encompassing everything from influencer marketing to mobile. A portion of the spends are now also spent on Connected TV.
Kumar explains, “Digital has grown faster and we expect that with every passing year that percentage will keep increasing but Television continues to be an important part of the mix, simply because of the massive reach it gives. Our standard media plans are a baseline reach of Television with a Digital on top to get the total incremental reach and then add impact medium, such as Print or consideration medium, such as influencers, etc. on top of it, to create the overall media mix. That's how we look ATL and branding campaigns.”
He continues, “When it comes to performance marketing, which is largely digital led, a big chunk is on Google, Meta and e-commerce platforms. The BTL offline activations focus on in-store or communities like homes and societies. If I were to add performance as well into the media mix, then, then digital share is more than 50%. However, I would like to keep them separate because they work differently in terms of what they do for the consumer - building the brand and customer awareness of the category, and the other is about ensuring that you click and sell. So, they behave slightly differently.”
With e-commerce now contributing to about 25% of Eureka Forbes turnover, the advertising budgets for these platforms is function of the total revenue from the marketplaces. As the share of sales on platforms increase, the advertising budget will follow suit. He adds, “From a product revenue standpoint, a certain percentage of that does go to towards media on the platforms. Typically, what happens is that as brands become larger and larger in that space, the percentage of spends will become slightly lower, even though the absolutes might increase, and therefore those are the trajectories we'll be seeing.”
Looking at the quick commerce space, Eureka Forbes currently has some of their SKUs priced below Rs 10,000/- listed on the platforms. However, quick commerce platforms have their limitations, when it come to the appliances category, as products that require installations – such as water purifier - and are priced above the Rs 10,000/- mark are currently not listed on these platforms.
Move to Premiumisation
With brands across categories now shifting their focus to premiumization, Eureka Forbes is also betting on this trend as integral part of its strategy. Kumar reiterates that the two-fold strategic plan of the company is first to drive the category penetration with the leading water purifier brands like Aquaguard, to grow the category with the right product, right price point and the right distribution. The second part of the strategy is to premiumize the market.
For example, the largest category, water purifiers have a large replacement market and a consumer replacing the water purifier typically looks something better than what they had in the past, with a more premium water purifier whih has better functionality features etc. Kumar says, “We've actually seen the premium segment of the market, including for our own business, grow faster than the other segments this year. That’s a general trend we're seeing in consumer durables and probably in other industries as well.”
As part of the premiumisation trend, Eureka Forbes recently launched new products “which were groundbreaking in terms of the functionality and designs offered and was adopted by consumers.”
One such launch was the Aquaguard Blaze Insta RO+UV Taste Adjuster Hot & Ambient Copper Water Purifier, which has a 9-stage purification process and offers instant hot and ambient water, which saw a huge uptake from consumers. Another innovative and premium product is the Aquaguard Designo NXT UTC RO+UV Copper Water Purifier which has a 9-stage purification process with a functional integrated under the sink design for modern kitchens where the water is dispensed from a tap. Another product that did well on the market is the Aquaguard Slimtech Glass UV Storage Copper Water Purifier which has a 8-stage purification technology and a premium glass exterior and a 2.5L storage tank, that combines elegance with functionality.
Kumar says, “You need to have the right products that consumers are then willing to buy. Our recent launches are the most expensive water purifiers in the market, and yet they were the ones which were actually selling the fastest. That shows the power of the proposition, the design, and the functionality when they come together. Consumers in India today are willing to pay that premium and we saw that this year.” The premiumization drive is also seen in the vacuum cleaner category, where robotic vacuum cleaners have seen rapid adoption.
Focus On The Quality Of Post-Service
Operating in the water purifier category, what is absolutely crucial for brands is improving the overall customer experience and service quality, particularly when it comes to after-sales. Kumar says, “Customer experience and service quality is number one on our agenda. We have tried to introduce automation and digitalization in our customer experience.”
For example, once a customer buys a water purifier, they can download the Eureka Forbes app and log in. The consumer can then see all the details of the product they have, raise a service request at the tap of one button. They also get visibility when the technician is scheduled for visit, or if they have an AMC (annual maintenance contract}, or if the product is under warranty and due for free service visits, or choose the time-slots through the app. Kumar says, “We've seen 70% of our customer calls now happen through the app. Of course, this needs to be backed by strong on-ground service and a positive experience when the technician comes in. We've been investing a lot in building that capability. We are looking to drive our Service Quality and Service Revenue and ensure that once a person buys a product, they're going to keep it over a lifetime, has an elevated experience. This also is a revenue opportunity with the candle and the filter replacements.”
When it comes to distribution, Aquaguard is Eureka Forbes’ most widely distributed product, present in about 25,000 stores across the country, with a strong presence across all urban town classes. He says, “We believe that there's still a lot of room to grow further because the category is expanding and has low penetration. As the category expands, more stores are likely to stock your products. We see a lot of opportunity to expand distribution in the years to come. It's about driving category adoption and penetration for all our categories - water purifiers, vacuum cleaners, air purifiers and water softeners as well.”
The very low penetration gives the brand a huge untapped opportunity to grow category penetration. For example, the penetration of water purifiers is only about 15% overall in India, with higher penetration seen in metros and rural penetration as low as 3%. Kumar says, “We are seeing momentum and growth coming from across all town classes, including Tier I towns but clearly the opportunity is bigger in Tier II towns and below. Though Tier I towns are growing well, we're seeing smaller towns grow even faster than Tier I towns. This is true for water purifiers and the other categories.”
Eureka Forbes today has one of the largest service networks in the country in the consumer durable space, servicing 19,000 PIN codes across the country. Kumar adds, “Our distribution is a big differentiator for us and we continue to build on it.”
Tackling Pollution
In recent years a major problem across India - particularly in North India during winters, is the high levels of pollution and poor air quality which significantly impacts people’s health. This scenario positions Eureka Forbes in a unique position with their air purifier. As a category, Kumar says that this category has a “lot of potential to grow and we have seen good adoption.”
However, a pattern that has been observed is that people tend to buy air purifiers only when the AQI levels are recorded to be poor, very poor or severe and visible to the naked eye; even though pollution levels across India throughout the year is less than desired. Kumar says, “There is a very clear skew in terms of purchase patterns that we see today. Brands need to take the lead to educate consumers about the potential damage this unseen pollution is causing and the long-term damage it causes to their health.” The health impact is not just felt on people with low immunity levels, children and the elderly can range from cough, sneezing, wheezing to asthma allergies but also on healthy people.
Kumar adds, “The category needs to see a lot more of education. Honestly, we have not seen too much of that happen in India so far. We haven't done so much on this, this year but yes, it's on our agenda to do more on this need in the years to come.”
Looking ahead, a challenge for Eureka Forbes’ is to maintain and build its brand equity. Kumar notes, “The challenge for us is how we steward our brands. How do we leave it in a much better place than where you inherited it?”
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