India has the potential to multiply its writing instruments exports, but matching China's scale will require stronger government backing for small and medium enterprises (SMEs), said Pooja Jain Gupta, Managing Director, Luxor Writing Instruments. Pointing to China's success in helping businesses grow, Gupta said India must improve scale and speed while supporting entrepreneurs to fully capitalise on the export opportunity emerging from global supply chain diversification.
In an interview with BW Businessworld, Gupta said global partners now view India not just as a manufacturing base but as one of the world's most important consumption markets, adding that "without the 1.4 billion people, how can a global brand be global?” She added that Luxor plans to double its manufacturing footprint by adding another one million square feet of capacity over the next three years, including expanding its dedicated Crayola facility. Gupta noted that with around 30 per cent market share in its operating industry segments, the company is also betting on the creativity segment through Crayola, while seeing ecommerce and quick commerce nearly double every year even as general trade continues to remain a dominant channel in India. The MD added that products for kids and younger consumers are witnessing the strongest growth. Edited Excerpts:
In 2023, you said Luxor wanted to double exports from India within three years, with exports contributing around 30 per cent of revenue and notified a Rs 70 to 100 crore investment. Three years later, how much progress have you made against those goals?
Yes, the contribution of exports has significantly grown and as far as our company is concerned, we are the largest exporters from India and especially now that many Asian markets are very high in cost and skilled and unskilled labour, India has a large focus. Every customer in the developed markets like the United States or Europe now wants to partner with India, where they are assured of quality, innovation and supply in time.
This world is changing so fast; there are so many geopolitical issues. If a logistics nightmare happens because of crude oil, it affects exports and then the whole world. There are markets where there is a cost issue and there are markets where India has a big advantage. That trust has developed over a period of time. They have had that trust with China for the longest while. It takes a while to change, but in the last three years, I am seeing a lot of changes. Now, we are about 40 per cent export and 60 per cent domestic and I am seeing a lot of traction on that side. The hurdles there are scalability and speed to deliver.
China has dominated the global stationery and writing instruments supply chain for decades. With geopolitical shifts and the China+1 strategy gaining momentum, how much of a window of opportunity does India realistically have?
India has to be the second China plus one. We have to be that and the government wants us to be that. However, the government needs to scale up and speed up the progress, which they need to support business people with. Clearly, there is a big export opportunity. Our exchange rate is beneficial for dollar exports and I see an opportunity where customers have started believing in the India story, which was not the case five years ago.
You have worked with some of the world's most iconic stationery brands for decades. When global partners evaluate India today, what has changed the most in those conversations?
They see India more as a consumption market. India is top of the chart for every single partner. They look at how India can be the market for their consumer brand. Without the 1.4 billion people, how can a global brand be global?
How can the Indian writing instruments industry compete more meaningfully with China when it comes to speed and scale?
We have to look at what is stopping India's industry from going to the next level and competing with China. It is scale, speed and support from the government. Whether it is the toy market, the kids market or the writing market, the government of India has to focus on the small and medium enterprises (SME) and help them scale up. It is the government's responsibility to do that. China has done that, which is why they became so big.
India has to focus on that. Export opportunity is not even a drop in the ocean so far. We can double, triple it from the current levels, but the government must support the Indian entrepreneur. Luxor has been built on trust, innovation and quality and we are the largest in terms of the number of products that we give to the consumer. From a child to an executive, they all use our brands. That is our unique position and that is where we hold our market share. We are the legacy brands of the country, which have been built on Indian soil and have gone global.
Could you give us a sense of where Luxor's manufacturing footprint stands today? As demand grows across categories, how much additional capacity do you expect to add over the next three to five years? Tell us about the dedicated facility for Crayola.
We already have one. We are going to expand that. Over the next 18 months, we will be expanding our manufacturing even more. We will be adding another million square feet of manufacturing space over the next three years. We already have about a million square feet; we will be doubling it.
Does the next phase of your growth require a different capital structure? Are you exploring a public listing if it helped accelerate expansion?
No. At the moment, we are not exploring anything, but we cannot say that we will not. At some point, we will evaluate options when we need to. For now, I think we are good as a family-owned enterprise. We are always open to acquisitions as well.
Earlier, you had spoken about the ambition of building Luxor into a Rs 1,000 crore company while increasing market share from around 22 per cent to 30 per cent. Since then, the company has added Schneider, expanded exports and entered the creativity segment through Crayola. What is the update on these figures?
We now have over 30 per cent market share. Luxor as a company has always promised to bring the best from the world to the Indian consumer. That is what keeps us unique. We believe that the technology and the brand experience given to international customers or consumers anywhere in the world should be given to our Indian consumers. That is why we have always been the first to bring in new brands, which are globally well known.
Talking about the Rs 1,000 crore milestone, we are there and now we have to go to the next step. We already have five brands (Luxor, Parker, Schneider, Crayola and Waterman). For now, we have enough work and business to do. There is no fixed project which I want to announce right now.
For decades, writing instruments have been Luxor's core business, but with Crayola you are making a decisive bet on the creativity category. Do you expect creativity products to become a meaningful second growth engine alongside writing instruments or do you see this as the beginning of a broader play across adjacent education and learning categories?
It is both. As a consumer company, you have got to get the consumer at the youngest age and there is no better way than the objective of clearly looking at the youngest kids. Our Crayola range starts from 18 months and it is building creativity which the Indian consumer would not have experienced otherwise because of the kind of products the Crayola portfolio brings.
It is a hybrid of colouring, creativity and an experience of fun, creating joy, happiness when the children are playing with Crayola. It is not just a simple art product. There is a lot of excitement for that and as a young mother myself, I totally believe that kids need to detox from screens and this is one of the key areas which Luxor wants to work on and partner with the community at large and with mothers, teachers and kids.
There has been a recurring debate that digital devices would eventually reduce the relevance of handwriting. Yet, premium writing instruments and creativity-led products continue to find buyers. How has your own view of the industry changed over the last decade?
Writing may have come down in the regular taking notes kind of category, but there are a lot of categories in expression like marking, industrial marking, office use markers, creative stuff for kids, art products for kids. I do not think that can be replaced with the digital world and fine writing is, in fact, a culmination of the growth of lifestyle.
If you are growing in your lifestyle, you will not like to use a cheap pen. It is not desirous of you to do that. So it is extremely important to see how the segment of writing is actually transitioning into a more evolved understanding and experience of the consumer.
Earlier, you had acknowledged that general trade was the dominant channel. Since then, quick commerce has become a major retail channel. How has your channel mix changed over the past few years?
General trade in India will not go away. The experience and destination shopping story in our country is still very large because of the sheer number of people we have, but yes, there is a large shift towards ecommerce and now quick commerce and both.
Our channel mix of ecommerce and quick commerce is growing almost double every year. Once the consumer understands and is comfortable with the product and has already experienced it, they know what they want to buy. They do not need to go to a shop and they want to just type Luxor Marker and they will go online and find it, whether it is Blinkit or Zepto or Amazon. It is the same.
While there is a huge change in quick commerce versus the main ecommerce channels, both will run together. It is not possible for everybody to take over only one channel. It will be mixed, but yes, we are seeing a lot of growth in those categories. |
