Johnson turns up the speed, hopes for a smooth ride

It has pitted itself against Schindler, Otis; and hopes to grab larger share of fast growing market

The growing glass and chrome urbanisation in India has opened up a new battlefront. Elevator companies, a ubiquitous and yet silent presence in city structures, are using technology and energy-saving features to differentiate themselves and ride the premium wave.
 
India is the second biggest market for elevators and escalators in the world after China. Every year thousands of units are added in upcoming residential complexes, industrial hubs, malls and shopping centres across the country. The big brands vying for a share of the nearly $1 billion domestic market are Kone, Schindler, Otis and Johnson Lifts. While market share numbers are not easily available, industry sources say Johnson, a home-grown brand based in Chennai, has nearly 18 per cent of the overall market. The company, for the record, was set up five decades ago by K J John and his son.
 

Elevators and escalators, for the uninitiated, are big ticket items, which are purchased by architects, consultants and contractors after technical evaluation. Technology therefore is a key differentiator and the big labels make it one of their strongest selling points.
 
Johnson says it has pioneered technologies such as V3, short for variable voltage and frequency, in association with a German company to save energy and benefit customers. “We were trend setters in technology. That made a big difference. Products were seen better and helped the brand to improve,” says Yohan K John, director, Johnson Lifts.
 
The other differentiators service and price too play an important part in driving brand penetration in a market such as India, say industry experts. “The image of durability and longevity is important in India, which is not a fashion elevator market,” says brand consultant Harish Bijoor. He adds that in a market where elevators are expected to run for 60 years or so, Johnson has stood for its sturdy imagery.
 
Competitive market
 
Brands such as Otis have built a national footprint while Johnson has largely been south-centric. In metros such as Mumbai, among the largest realty markets in India, Otis and Kone enjoy the upper hand and charge a premium. Johnson says that it had stayed away from these markets in the past due to capacity constraints.
 
That is now a thing of the past. The firm has three factories — two in Chennai and one in Nagpur — aimed at establishing its footprint beyond the south. Chennai will act as hub for the south and east, while Nagpur will be the hub for the west and north, company executives say.
 
Officials also say the firm is hoping to leverage the brand’s reputation to push its escalator business, an area it ventured into only a few years ago. The residential segment accounts for 70 -80 per cent of the demand for elevators in India. Escalators and travelators are comparatively smaller, constituting two per cent of the the market only. Cumulatively, the domestic elevator and escalator market is growing at a rate of 6-7 per cent per annum, says Sebi Joseph, president, Otis India. He claims Otis is growing at the rate of 24 per cent per annum, ahead of the market.  Last market share data available for the year 2015 pegs Otis’ overall market share at nearly 11 per cent, behind Johnson. Leader Schindler has a share of 19.35 per cent, while Kone is second at 18.18 per cent.
 
But Johnson is working on expanding its base. It has tapped into the escalator market in Bengaluru, Chennai, Kochi, New Delhi (partially), Jaipur, Gurugram, Kolkata and Lucknow where it claims to have 36 per cent of the market. It has managed to beat Otis in escalators, which has around 28 per cent share as well as Schindler. The latter is estimated to have a share of around 17 per cent in escalators.  Johnson’s executive director V Jagannathan says this is a significant leg-up for it as the escalator segment grows.
 
According to experts, the market for escalators could turn out to be more lucrative in the coming months as around 1,000 escalators would be required for metro projects in 2017 alone and the orders are to be placed now. Elevators could see a slowdown as malls take a hit. Residential projects could make up for the loss.
 
Johnson, company executives say, is poised for growth in other areas too. The firm has a joint venture with Japan’s Toshiba Elevators, catering to luxury hotels and premium apartments. The Chennai-based firm is marching ahead.