EY
EY India

Multidisciplinary professional services organization

4 minute read 19 Jul 2022

Three years ago, a cables company teamed up with a private equity firm for a digital route-to-market transformation. Since then, its sales have grown in double digits.

While evaluating the consumption trends in India, TPG understood the high growth prospects of the consumer electrical sector. With high-volume demand growth in housing wires and electrical appliances, and the central government’s electrification drive, the sector was undergoing a shift. The industry was rapidly moving from unorganized to organized formats, and the private equity firm wanted to tap into this opportunity.  

Choosing the right partner has been the key to TPG’s success in its 20-year journey in India. In its venture into consumer electrical, it found the right partner in RR Kabel, the largest Indian exporter of housing wire, that also boasted of manufacturing prowess and high-quality standards. RR had the highest Net Promoter Score (NPS) in its core states and had strong product quality. Business ethics and being open to learn and transform sealed the deal.

We had a very long-term vision for this company. When we started, we had thought that for the first five years, we will make a loss, and then from the sixth year, we will make profit. So, for us, profit was secondary to establishing the business.

Shreegopal Kabra

Managing Director & Group President, RR Global

The company started working on professionalizing the business and building market leadership across product categories. It underwent a comprehensive digital transformation, implementing systems and processes across departments, from HR to finance, IT, supply chain, sales and marketing. The company conducted town-level market and client presence mapping across the country to evaluate optimal white spaces for direct reach expansion. 

While RR Kabel could have continued growing very well by themselves, we wanted to help them build processes that would help the business grow beyond the family, and help the business withstand intergenerational transitions and various economic cycles.

Mitesh Daga

Managing Director, TPG

How EY can help

Through the Digital salesman initiative, the cables company undertook secondary sales transformation and enhanced sales force effectiveness. Strengthening the channel partner network and adding new partners to ensure network sustainability was a key step in the transformation. A new sales excellence vertical, along with various programs for talent and capability enhancement, improved its effectiveness. To enhance the supply side, the company focused on optimizing its network and planning processes.

 

Creating long-term value

EY worked with RR Kabel and TPG to execute the transformation by analyzing the end-to-end route-to-market capability. The company’s key strengths were its extreme focus on product quality and high levels of employee and channel loyalty. Therefore, the focus areas of the transformation process were preserving the company’s key strengths and giving it an institutional framework that can withstand inter-generational transitions as well as economic cycles. Various departments within the company were at different levels of maturity. While cables and wires functioned like a well-oiled machine, the consumer business was quite young. Therefore, one of the target areas was to use the strength of a robust incumbent management team to support new hires who had been brought on board to address critical gaps. 

India is 20,000 micro markets. No organization is present in more than 40-50% of these. So, we customized strategies to individual micro-markets to ensure that we become partners of change. Transformation has to be human-centric and about innovating at scale.

Karan Bhatia

EY India Business Consulting - Partner

How EY can help

The execution was supported by change management across all managerial and employee levels. Pilot implementations were done to perfect the go-to-market approach. RR Kabel also hired new senior leaders, upgraded its Enterprise resource planning (ERP) system, and revamped the sales function. New market strategies were devised during the pandemic, with the support of EY. Every district in the country was mapped out and there was continuous tracking of the situation on the ground. As a result, as markets opened, the company was able to bounce back.

 

Another key aspect of the transformation was to take the sales organization closer to their consumers. The organization moved away from celebrating sales when the first customer (i.e., primary channel partner) was billed, to tracking and celebrating when an electrician bought wire and used it at a consumer’s house. The theme for transformation has been “loyalty to legacy”, which started by first generating loyalty at the electrician level and then ensuring the loyalty stays with RR Kabel, thereby creating the legacy.

 

The intense efforts are showing results. RR Kabel has opened new outlets in towns to have stronger last-mile control over distribution. Last year, the company reported an EBITDA growth of 40% YoY. It also reported high double-digit volume sales growth, neutralizing the COVID-19 impact and far outstripping industry growth, with pilot markets growing 3.5x of control markets. More importantly, the employees, management and promoters are in sync with their vision for the company’s future.

 

The fledgling consumer durables business has also doubled in size, completed an acquisition, and integrated the organizations, thereby creating a high growth portfolio for the future. The transformation roadmap has been further customized to drive this business and has helped deliver industry leading performance across segments.

Summary

  • With the aim of becoming a market leader across product categories, digital transformation was carried out across all functions, from HR and sales to IT and finance. 
  • The family-run business took steps to professionalize management and use its strengths of employee loyalty and high-quality of products.
  • Focus on secondary sales, higher sales effectiveness and new partners strengthened network sustainability while town-level market mapping revealed areas for direct reach expansion.

This is part of the Transformation Realized - Powered by EY series currently being hosted on CNBC, wherein we feature stories of business transformation led by India's most inspiring business leaders who have created value by placing human@center, deploying technology@speed and innovation@scale.

About this article

EY
EY India
Multidisciplinary professional services organization
Related topics
CEO agenda
Technology
Consulting
Private equity
Transformation Realized

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