Parker Pens Plan For India Thrust

The $400-million Parker brand from the $10 billion Boston-based Gillette group is looking to develop India into one of its largest worldwide markets outside the US and Europe for its range of writing instruments.

India has the potential to become one of the biggest markets worldwide, said Vivek Bali, head of Luxor Writing Instruments Private Limited, a 50:50 joint venture of Parker with Luxor, one of the largest brands of writing instruments with an estimated 14 per cent market share.

The joint venture makes India the first country outside the US and Europe to have a manufacturing facility for Parker pens. We expect India to be a strategic market for the company, said Bali. Industry estimates place the current value of the Indian writing instrument market at $200 million; it is set to grow at ten per cent annually. The luxury or premium segment is estimated at a tenth of that.

 

Players in the premium writing instrument segment include German major Mont Blanc (priced between Rs. 5,000 and Rs. 450,000), the Cartier range (priced between Rs. 7,000 and Rs. 32,000) and Caran DAche (Rs. 1,000 to Rs 100,000).

Bali said Parker is looking at straddling the entire price spectrum from their fastest-moving item - the Parker Vector - to the premium Rs. 7,500 Sonnet and Rialto range. I think that we are in the process of creating a whole new segment in terms of positioning and price. I do not see us necessarily competing in any one segment of the market, he said.

Though the writing instruments segment is still nascent in India, the company is upbeat on its potential. For Parker, there is a tremendous opportunity with the presence of a flourishing gray market for the brand. The decision to enter was affected by this, as in a sense, there was already a market for the product, he said.

The gray market for luxury pens in India is estimated to be worth between Rs 100 million and Rs 450 million. Bali said Parker is planning to keep the gray marketeers at bay by pricing the product lower. He predicted that within a year Parker would achieve at least one-tenth of the size of the $100 million British market in India. This translates into approximately $10 million worth of sales. I am very bullish on the brand and user potential in India, he added.

While he was unwilling to disclose the volume of the investment made by the company, preferring instead to say that it is very significant, he revealed plans to set up more manufacturing capacities in India. The company will look at establishing a manufacturing facility as the demand goes up and the economics become viable, he said. Our aim is to move towards indigenisation as rapidly as possible, he added.

Vivek Govil, marketing manager, said: In another year, we see at least 80 per cent of our production (for the Indian market) moving here. (IANS)

He said the company may eventually look at India as a re-export centre.

Since the industry has a high manpower component which is more cost-

effective in India, a centre would eventually make sense. However, this will take time, as it would involve setting up research and development facilities etc., he explained.

Bali pointed out that while India had tremendous potential, the penetration of writing instruments was low. Something as simple as the low literacy rate affects it, he said.

Besides, the sector was largely unorganised and fragmented. A major

differentiator is the fragmented market and the distribution logistics. Unlike in the US, it is not possible to tap a retail chain or outlet directly.

The company sees a large market emerging in the gift segment. According

to Govil, A very high proportion of Parkers are purchased as gift items as it is perceived as an affordable, branded item that makes a suitable gift for many occasions.

Bali said the Indian consumer is very discerning and extremely brand

conscious. Sensible pricing decisions are very important while entering

India. It is not as if you could bring in a global brand, even a well-

recognised one, and expect people to buy it, he said.

Gillette is the worlds largest writing instrument manufacturer, and has a dominant presence in over 200 countries through its brands - Parker,

Waterman and Papermate. It has already established a significant

presence in India, with its Oral-B range of toothbrushes, mens hygiene

products and the Braun brand.

The company has gone in for a phased entry with the product currently

available in 33 top towns. The pricing formed an important part of the

companys strategy - Parker prices range from Rs. 90 to Rs. 7,500. - India