In conversation with Rishabh Agarwal, CEO of Responsive Industries

By staying at the forefront of design trends and consumer preferences, we aim to offer products that go beyond utility, creating a delightful and immersive experience for our customers, affirms Rishabh Agarwal, CEO of Responsive Industries

In Q2FY24, the company's net sales increased by 9.48 per cent, while net profit increased by more than 800 per cent YoY. What factors contributed to the company's performance?

Responsive Industries has worked tirelessly to delight our customers with innovation, beauty, and performance with marked growth in our Luxury Vinyl Plank segment. Our flooring brand is now visible in more than 3,000 retail locations with a continuing engagement in the residential consumer segment. More specifically, the growth is driven by:

Diversified Revenue Streams: In addition to the strong B2B customer base with established sales to railways, transport, healthcare, infrastructure, and automotive, we have made tremendous headway in generating sales in the residential B2C segment.

Market conditions are ripe for Innovation: Luxury Vinyl Plank is a 100 per cent waterproof stone core alternative to carpet, wood, engineered wood and laminate flooring. We are the first movers in India for large-scale manufacturing of these products.

Industry-leading position in Luxury Vinyl Plank: We have industry-leading capability and capacity for Luxury Vinyl Plank with a state-of-the-art facility in Boisar, Maharashtra.

Considering LVT's popularity for DIY installation in the West, how will you address potential hesitation towards DIY among Indian consumers, and what support mechanisms will be available for those who choose to self-install?

While DIY is indeed a great selling feature for the West, the innovation of Luxury Vinyl Plank has more to do with ease, speed and cost of installation rather than the need to do it yourself. The licensed Unilin click technology enables a floating floor installation with only simple tools like a hammer and cutting tools required. Moreover, since it’s a floating floor, Luxury Vinyl Plank can be installed on top of any flat surface – including old floors, which is critical when considering refurbishment and remodels.

Considering the nascent stage of LVT in the Indian market, what challenges do you foresee in terms of consumer awareness and acceptance? What strategies are in place to educate potential customers about the benefits of LVT and overcome perceived drawbacks compared to traditional options?

Some of the challenges we have encountered and strategies for Responsive Industries in the Indian LVT Market are given below-

Challenges in Consumer Awareness and Acceptance:

· Limited knowledge about LVT: Indian consumers might be unfamiliar with LVT, its properties, and its unique installation process compared to traditional flooring options.

· Perceived high cost: Initial perception of LVT as expensive compared to tiles, laminates, or wood could deter first-time buyers.

· Concerns about durability and suitability: The Indian climate and lifestyle raise concerns about LVT's resistance to heat, moisture, scratches, and foot traffic.

· Availability and accessibility: Limited distribution channels and lack of readily available LVT products in smaller towns and cities could restrict market reach.

· Preference for traditional materials: Strong cultural preference for established flooring options like marble, granite, or wood might pose a challenge.

Strategies to Educate and Drive Acceptance:

· Targeted awareness campaigns: Utilize traditional media like TV, print, and online platforms to educate consumers about LVT benefits, highlighting its easy installation, aesthetics, low maintenance, and durability.

· Partnerships with architects, builders, and interior designers: Collaborate with industry professionals to promote LVT in residential and commercial projects, showcasing its versatility and design possibilities.

· Interactive showrooms and experience centers: Create engaging spaces where customers can see and touch LVT samples, understand installation methods, and receive personalized advice from trained personnel.

· Promotional offers and trial programs: Introduce introductory discounts, limited-time offers, or sample product kits to encourage consumers to try LVT and experience its benefits firsthand.

· Emphasize LVT's unique advantages: Focus on aspects like waterproofness, scratch resistance, ease of cleaning, and suitability for high-traffic areas, addressing concerns about Indian climate and lifestyle.

· Highlight environmental benefits: Promote LVT's eco-friendly attributes like recycled content, low VOC emissions, and sustainable manufacturing practices, appealing to environmentally conscious consumers.

· Leverage social media and influencer marketing: Partner with home decor influencers and online communities to showcase real-life LVT installations and address consumer queries in a relatable manner.

Can you provide any insight into the Plastic Product industry?

In the bustling world of flooring, plastic takes centre stage, not with the dazzle of diamonds, but with the practical allure of affordability, resilience, and easy care. From bustling kitchens to serene bedrooms, plastic's dominion stretches to encompass vinyl, laminate, and even modular carpet tiles. With a projected market value of USD 53.44 billion by 2026, its reign appears unshaken, fueled by factors like rising demand for budget-friendly, durable options, particularly in the throes of rapid urbanization.

Innovation acts as plastic's loyal champion, continuously crafting newer, sleeker forms. Luxury vinyl tile, for instance, mimics the regal charm of wood and stone with uncanny precision, blurring the lines between the synthetic and the natural. This constant metamorphosis, coupled with the ease of installation and low maintenance, makes plastic a darling of both residential and commercial spaces. However, this rosy picture isn't devoid of thorns. Environmental concerns prick its conscience, as the spectre of plastic waste looms large. The industry finds itself under pressure to sculpt a more sustainable future,

Volatile raw material prices add another layer of complexity, keeping manufacturers on their toes. The constant dance between cost control and quality becomes a delicate act, one that demands agility and strategic foresight. But plastic's biggest rival isn't just environmental anxieties; it's the allure of other flooring materials, like the timeless elegance of hardwood, the cool sophistication of tile, and the plush comfort of carpet. Each vying for a piece of the pie, they compel plastic to constantly innovate, push boundaries, and reinvent itself.

And reinvent it does. The LVT market, for instance, gallops ahead, propelled by its hyper-realistic charm and effortless installation. The quest for sustainability fuels the green revolution, while the quest for innovation leads to an explosion of textures, colors, and patterns. From mimicking natural elements to embracing bold geometric designs, plastic refuses to be pigeonholed, constantly morphing to suit the ever-evolving tastes of its customers.

What are the key growth triggers for the company for the next few years?

There are several key growth triggers for Responsive industries in the next few years considering several factors and trends. Here are some potential areas we will focus on-

Increased market share in the US market: Responsive Industries is poised for substantial growth in the coming years, with a strategic focus on key triggers. Firstly, we aim to augment our market share significantly in the US market, leveraging market dynamics and consumer preferences to solidify our position. The second pivotal growth trigger involves an intensified effort to enhance our brand presence within retail stores, strategically targeting consumers.

Increased spending on marketing and storytelling for the product category: One pivotal growth trigger for Responsive Industries in the upcoming years involves a substantial increase in marketing expenditures coupled with a strategic emphasis on storytelling within the product category. This entails deploying comprehensive and compelling marketing campaigns that not only showcase the features and benefits of our products but also weave a narrative that resonates with our target audience.

Increased focus on delighting the customer with next-level aesthetics with a focus on design and luxury: A pivotal growth trigger for Responsive Industries in the imminent years involves an intensified commitment to delighting customers by elevating aesthetics to the next level, with a keen emphasis on design and luxury. This strategic initiative entails investing in innovative and visually appealing product designs that not only meet functional requirements but also evoke a sense of luxury and sophistication. By staying at the forefront of design trends and consumer preferences, we aim to offer products that go beyond utility, creating a delightful and immersive experience for our customers.

At the moment what are your top 3 strategic priorities?

Our current strategic focus centres on three key priorities. First and foremost, we are dedicated to expanding our market share in the United States, particularly within the Luxury Vinyl Plank segment. Simultaneously, our emphasis extends to establishing a formidable consumer brand for Luxury Vinyl Plank in India, propelling the growth trajectory of this specific product category.

Additionally, we are actively working to elevate consumer awareness of the Responsive brand, consolidating our position and impact in the market.

What is your revenue mix by segment, and how do you expect it to change over the next 2-3 years?

Our current revenue mix is diversified across segments, with Luxury Vinyl Plank constituting 30 per cent, Resilient Sheet Vinyl at 40 per cent, Synthetic Leather at 20 per cent, and Synthetic Ropes at 10 per cent. Anticipating dynamic market shifts, we project a significant surge in Luxury Vinyl Plank, expected to escalate to 60 per cent within the next 2–3 years due to rapid market share expansion. Concurrently, we foresee consistent growth across all other categories, ensuring a balanced and robust product portfolio.