Irony takes various forms, and it was indeed ironical that engineer Mahesh Gupta did not have access to clean drinking and potable water at home in 1998, when both his children got jaundice. Well, he could have bought one of those water purifiers available that time, but they weren’t good enough for him, he wanted something better. So he ended up building an all new water purifier for himself in his garage, using the then bleeding-edge Reverse Osmosis (RO) technology. Then, having done that, the now sixty-something chairman of Kent RO Systems thought what was good for him would be good for others as well, and founded the company in 1999. Since then, backed by a good product, global certifications, celebrity endorsements and customer acceptance, Kent has created a new category in water purifiers and has today emerged as a multicrore megabrand. NRI Achievers sought out the CMD of Kent RO Systems Mahesh Gupta, and asked him to share the Kent story with our readers. So here is how it all came about, narrated mostly in his own words …
Kent RO Systems Limited is a healthcare products company with its headquarters in Noida, Uttar Pradesh, making water purifiers based on the Reverse Osmosis process. Over the years the company has diversified into products like air purifiers, appliances for cleansing vegetables and fruits, and water softeners. The company, whose technology is validated by UNESCO and certified by organizations such as NSF, WQA, TUV and ISO, won the Golden Peacock Eco-Innovation Award in 2007, for developing innovative water purifying technology and preventing environment degradation. Kent exports to SAARC countries, the Middle East and Kenya, and expects 15% of its total turnover to come from exports in the near future. The company has its manufacturing base in Roorkee (Uttarakhand), spread across 4,00,000 sq.ft and has an annual production capacity of 1 million units. It sells more than 2,25,000 RO purifiers every year and holds around 40% market share, with about 80% of its revenues coming from RO purifiers. Kent is today also competing with international brands, outbidding them on basis of its technology, innovation, better service, well equipped distribution system and good branding.
Innovative marketing strategies and the adoption of state-of-the-art technologies both in manufacturing and running internal business processes has helped Kent in taking their brand and products to the next level – the adoption of global best-practices from similar sectors to run their business has made things fall in line with international norms through the implementation of ERP, Capacity Requirements Planning and Supply Chain Management Systems. This has helped Kent grow manifold, and manage a relatively vast distribution and service network. But enough about the company, let us get down to the heart of the matter, the story of Kent that Mahesh Gupta has to share with us …
“Necessity they say is the mother of invention. Kent RO was born out of the need to provide clean water to my children, when both of them fell ill in 1998. I was compelled to consider installing a water purifier at home, but available options left me dissatisfied. Products available in the market those days worked on ultraviolet (UV) technology, killing bacteria. But this was not good enough for me, since the water we drink also contains many dissolved impurities that are not removable using UV technology. I wanted a purifier that would remove these undesirable dissolved elements while simultaneously recognising and retaining good minerals. Coming from an engineering background, making my own water purifier was not all that difficult a task – all I needed to do was export the components. My gut-feel told me to piggyback on existing technology and develop it further to come up with a better water purifying system for my family. So I embarked on the job and this experiment turned a success. After several trials and six months of toil, I zeroed in on RO, a technology that promised the results I wanted. And the first ‘Kent’ purifier was made in March 1999. And then I mulled about bringing it out in commercially in the market.”
Convinced about the huge potential for his product, Gupta decided to enter into production of his RO purifying device and offer it to the masses. “While I did not conduct any market survey before starting this business, I was well aware that 80% of all diseases in India are caused by water-borne micro-organisms, and that 80% of urban families do not even purify tap water. This pointed at an obviously huge market for my product. I invested about 5 lakh rupees as seed capital for procuring equipment for the RO system and getting my product patented. This money came from my own savings earned out of my other entrepreneurial foray — SS Engineering. After having worked for 11 years with Indian Oil as a deputy manager (technical services), I had quit in 1988 to start SS Engineering – to make oil meters to test the quality of oil.
Kent RO Systems grew exponentially through the years, and the patented technology behind it’s RO water purifiers helped. Gupta avers: “The passion to work ought to take precedence over the need (read greed) to earn money.” It is indeed rare for a businessman to take this sort of a stand, as most entrepreneurs will primarily look for ever-increasing revenue flows rather than focusing on maximising customer satisfaction at the expense of profits. At least from that point of view, the growth story of Kent is an inspiration not merely for upcoming and potential first generation entrepreneurs but also for old-world established conglomerates.
“I had started out of the small garage of my house at South Extension in Delhi, where I designed the first purifiers. In the first year, sales were a dismal 100 units, and we were even accused of overcharging by some customers. We had priced our product at around 20,000 rupees, while most other water purifier companies were selling their products at some 5,000 odd rupees. There was nothing we could do about this since Kent was offering a superior technology and we had to recover the cost of the imported equipment we were offering.”
In the first five years, Gupta had found it difficult to convince customers to buy his product as opposed to one from a giant like Aquaguard (Eureka Forbes), whose UV purifiers literally ruled the market with their over 70% market share. They also cost five-times less than Gupta’s RO purifiers. But the very fact that the purifiers available in the market did not remove dissolved impurities like arsenic, fluoride or pesticides made it Kent’s USP, as its product did remove them.
“So initially, for about 6-7 years we tried to sell our products without any major success, and without much branding or publicizing effort. People were buying our products but not in any large quantities. To make things worse, brand awareness and recall were almost nil given lack of advertising and publicity. Thankfully, our customers realised the superiority of our product and our sales started picking up through word of mouth publicity by users. By 2001, we had quite suddenly hit the sweet spot of the potential market, with customers beginning to like our products and revenue generation showing some upward movement. I ploughed back the money we earned from our sales and initiated a brand campaign. We also put up our products at retail outlets and stores that specialised in kitchenware, providing shoppers the opportunity to try our product and make on-the-spot decisions.
“Publicity, advertising and reaching the customer with our message became an imperative necessity. We needed a brand ambassador – someone who is already a well-known face and personality, who could easily slip into the role of a mother with ease. I managed to convince the dream girl of Bollywood – Hema Malini, to endorse our brand. She was ideal for endorsing our brand as she was a housewife, popular, and appealed to the ladies, but it was not easy convincing Hema Malini. When approached in 2005, she agreed to endorse it only after using our product. In 2005, when our turnover was a mere 30-40 Crore rupees, we had no money to spend on TVCs. So we started with using Hema’s photo in catalogues and print. It was only in 2006 that we could create our first TVC”
This proved to be a turning-point for Kent, it gained in volumes. It today sells around 450,000 units a year in a 1-million-a-year RO market. “With Hema, later joined by her daughters Esha and Ahana as well as our brand ambassadors, the entire perspective changed in 2006. Our revenues got a boost through our promotional campaigns and sales went up. Business took off to speed, functioning at an altogether different level. Learning from this lesson, we have more recently also managed to get hold of Boman Irani to promote our new product ‘Kent Tap Guard,’ a purifier that gives pure water directly from the tap.”
“Next on our agenda was the plan to develop a sales team, making efficiency and prompt service our buzzwords. Here was a product that required immediate attention in case of a breakdown as people couldn’t afford to wait. But given the lack of manpower penetration, getting the servicing pipeline in place was a huge challenge. We’ve managed to overcome the obstacles and today, our company has a team of more than 3,000 service engineers in different corners of the country.” That was then, but today Gupta is more concerned with reducing the numbers of service calls, which is outsourced outside of Delhi. “Unlike a TV or a washing machine, where service can probably wait for a day or two, people want service in three-four hours in this category. So, our service organisation should be able to respond within that period.”
“Our company currently sells more than 2.25 lakh units every year and we have so far sold more than a million units to date. I am also fortunate in that my family involves itself fully in my endeavours – my wife, Sunita, and both our children – daughter Surbhi and son Varun – help out with the business. I still have no formal training in this field, but I’ve managed to keep myself abreast of the market by going through reference books, conducting Internet research for innovations, and visiting various industries and markets.”
The water purifiers that account for 95 percent of Kent’s sales have been tweaked and re-tweaked over the years to suit every type of water Indian households have to reckon with. While Kent has diversified, introducing other derivative products to Indian households like fruit and vegetable cleansers, water softeners and air purifiers, they have not really found adequate traction in the market. But Gupta is least worried about this, and feels that these products are simply ahead of their time. He is of the opinion that even on the water purifiers front, there is a lot more ground to cover: “Kent is available today in at least 400 outlets in Delhi, but it does not mean we have reached all customers. The problem is that the customer doesn’t have a need or desire to buy, we have to create that desire,” he says. Adoption cycles are slow, and the market would evolve further as awareness increases. And once there’s a large enough nucleus of RO owners, growth could be faster,” he adds.
Kent’s success has led many other players to enter the segment: Pureit by Hindustan Unilever, Livpure by Luminous, Ion Exchange, not to mention the elephant in the room Eureka Forbes. Many of them have also followed in Kent’s footsteps, going in for celebrity endorsements to push their products as well. Gupta attributes his success to a good product and appropriate technology. Yet, he feels that he and the entire water purifier industry in India have so far merely scratched the surface. “What’s a 1-million-purifier market in a country with 60 million Internet connections or 145 million LPG connections ? It’s difficult to tell people that they are dying slowly – by drinking unclean water with dissolved impurities present in it,” says Gupta. But in advertising and promoting Kent purifiers, by no means does he want to play on fear: “I do not want to play on the fear-factor, because I want to build an aspirational brand that lasts for a long time. You could use fear to build a concept, but not a brand,” he avers.
The penetration of water purifiers in rural India is a measly 2 percent and double that in urban India. Pricing surely is a deterrent – Kent’s RO purifiers cost 16,500 rupees. But Gupta feels the bigger problem is an uneducated and unaware customer, whom the government just instructs to boil his drinking water. That perforce does not remove dissolved impurities – impurities that have only increased with industrialisation and use of pesticides. As ROs get popular and become a utility product, higher volumes will obviously bring down prices. Today, Kent’s marketing cost is 15 percent and Gupta is paying a dealer margin of 20 percent. “As volumes go up, margins can come down. If it becomes a utility product, I don’t need to advertise to sell,” says Gupta.
Seen dispassionately, the main factors that contributed to the success of Kent RO may be said to be the following: In 1999, RO purifiers were not yet available. Kent created just such a product and also the demand for it. It was the first to introduce a wall-mounted RO purifier to Indian households. It roped in Hema Malini to endorse its product and build customer acceptance. Kent Purifiers are certified by world standards bodies like WQA & NSF, of the USA. In time, it also launched mineral RO purifiers, and more recently, launched a ‘no-wastage’ purifier that collects impure water for recycling.
NRI Achievers queried this doyen of the water purifier industry who made a difference to the sector to talk a bit about himself, his early years, milestone events in his life, his likes and dislikes, so that our readers may get to know more about his persona rather than just learn about his achievements. Here are excerpts about what he shared with our editorial team …
“I had an ordinary childhood. I remember the school I went to – the DC Arya School – I was not all that studious a child, and I also remember getting periodic scoldings from my parents from those times, for not focusing too much on studies … however, I do recall that I did not do too badly in my studies, and I was ultimately good enough to compete and get into IIT. Contrary to popular perception that competition those days was not as tough as it is today for higher studies in premier institutions, I would say it was no different. But unlike today, no tuition classes or prep-institutes existed in those days. I recall we had started preparing for the entrance exams right from class IX, my elder brother and I – both of us ultimately got into IITs, I want to Kanpur. I did not stop with my earning a B.Tech in Mechanical Engineering from IIT Kanpur. I went on to specialise – in Petroleum Technology. I went to the Indian Institute of Petroleum at Dehradun (now a university), to get a masters in Petroleum.
My first and last job as an employee was with the Indian Oil Corporation, where I served as a deputy manager (technical services) for 11 long years. I left this job in 1988, wanting to work on oil conservation. I started a business, SS Engineering – to make oil meters to test the quality of oil. My first invention was made right here in SS Engineering – in the field of petroleum conservation instrument – an oil-flow meter which earned me both some fame, and half a dozen patents to my credit. This company is still very much in business, and I am still connected with it. In fact the branding of our water filters and purifiers, ‘Kent,’ comes from this company. The oil-flow meter I had invented in SS Engineering was branded as the Kent oil flow meter when it entered production in 1972. So when in 1999 we began building our RO water purifiers, we retained the same name, which was familiar to people in the market.
As for my likes and dislikes, my pet peeves and what I find some pleasure in – I love good food, and cars. I enjoy driving whenever I get a chance. Cars for me are both a luxury and a utility. Though most of my outfits are bespoke and custom-stitched, I do like wearing a Louis Philippe shirt. I have a spiritual bent to my personality, and an ideal holiday for me for me these days is attending Sri Sri Ravishankar’s Art of living sessions in Bengaluru. As for regrets, my only regret since I’ve started Kent is that I’ve had to ease up on my hobby of playing bridge – I’ve been an avid player for over 25 years.
Asked about his mantra for success, he says: “My first success mantra is my passion for work. I put in as many hours of my day into my work as is needed. Unless I finish my job for a day I do not go home, sometimes it is 6 PM, sometimes it is 9PM. I will not stop till I finish whatever I am at, and I never take my work home or keep it pending for tomorrow. The second is sincerely trying to find solutions for my customers. The basis of my success is to understand the issues of customers – you cannot come out with a killer product unless you understand your customer’s needs. Success in my business comes from the passion that I have shown to my work. In life you can achieve anything if you set your priorities right. Some people say I am doing whatever I do for my family, some say its for my friends … but I have passion for my work. I would say work is more important to me than all other things in life. Your ideas should be so effective that they should directly hit the customers mind. Sankalp Karo, Vikalp Mat Dhoondo”.
Kent CMD Mahesh Gupta is also currently the President of the Punjab Haryana Delhi (PHD) Chamber of Commerce & Industry. So when we asked him from the point of view of being an industry association president what he thought of the past two years of Narendra Modi’s tenure, his had this to say: “From my point of view, his tenure has been good for two reasons, One, he has come out with many initiatives that are progressive for the development of our country – Make in India, Skill India, Digital India, et al. And while it is not at all that easy to make things happen in India, to a large measure he is succeeding in making them happen. And secondly, the biggest credit I would give PM Modi’s government is his and his team’s considerable success in creating belief in the minds of people both in India and abroad. The belief that “we can do it” – this I feel, is the biggest gift any Prime Minister can bestow upon this nation. Also, I think due credit ought be given to his endeavours on the international front, and the image of India he has been building on the world arena. The amount of confidence he has infused in the minds of foreign investors and in the people who want to come and work in India is staggering. So much so that nowadays anyone and everyone wants to come and invest in India, and partner with Indian industry to start businesses.
“And my message to all those people – prospective investors, and especially our own NRIs, OCIs and PIOs is: Wherever you are, you went from this country in search of a better life over there. It is worthwhile to note now that this country too is an immense engine of growth. It is today the fastest growing among all emerging economies, and a silver lining in an otherwise dark cloud that overhangs the global economies. I would say that it is now time for you to come back, or at best devote or contribute something for the further development of this country.
“As for our younger generation, whether they be the well educated or not, whether they be engineers or from any other stream or discipline, my message to them is carpe diem – grasp this day – and don’t fail to tap the opportunities and the new entrepreneurial climate that prevails. Bring more and more new innovations to play, and believe in your dreams. Have the passion to live.”