The power of partnerships in building materials industry

The building material industry thrives on partnerships. It’s a classical industry where the distributors and retailers are extensions of the brand themselves. They are the bridge between consumers and manufacturers and suppliers. Hence, they are very actively involved in trends and market activation. In my experience of working in India and the Middle East, there were many instances where Developers, Contractors, Architects, Designers, and even end consumers made brand decisions based on the recommendation of the Channel Partner. The trust reposed in them is immense and it has to do with various factors. Middle East offers a scale and access to brands as trading in these countries is much easier with governments encouraging entry & production. On the other hand, India provides better opportunities to brands that produce locally, generating employment for the local population while restricting choices in the market due to import duties.

In this article, I will provide India perspective and shed light on the specific partnership dynamics of the building material industry as experienced.

Factors leading to strong partnerships in the building materials industry

Locations

Beyond metro cities in India, the growth is coming in from Tier 3 and 4 cities where end consumers aspire for ‘state of the art’ homes and have grown in their local businesses to invest in the ‘home of their dreams’. Distributors have been able to provide Indian & International brands to discerning consumers in these cities with a full-service portfolio. That is the power of reach and availability in India today.

Generations

While there are multiple generations and extended family of consumers living in the same city and hence larger & aspirational homes is a reality, there are at least 2 to 3 generations of Partners also in the building material business. In many ways, this becomes a family connection over generations – designing homes, supplying reliable products & the service after the sales. The urbanisation of India and exposure to the world get families (including children) to make a lot of decisions on modern amenities which makes the role of Channel Partners important!

Trust

‘Home is where the heart is’. We all have heard this, and I am sure believe in it. The partners cherish their role in making their customers delighted with their living spaces. Each customer is unique with completely different expectations on selection, delivery, installation & service. While Architects & Designers are leading the construction/renovation of homes; we do see the distributors stepping in with recommendations, changes, and last-minute salvaging situations when the proposed product ‘does not fit in’ or ‘looks good enough’! The trust in the partner, makes customers shift and that is the power of relationship.

Lifestyle industry

Since this industry is akin to changing trends, a lot of partners and their key staff invest their time and efforts to visit factories of brands present or entering the country. They have the product knowledge and sometimes are instrumental in getting these brands imported into India taking full responsibility for imports, sales, and post-sales service. It comes with its challenges when brands run out of passion for India and decide not to pursue business further. Channel Partners have to deal with replacements of products, mostly free of cost, as there are no products or components available to serve anymore. The industry, however, continues to see more players each year, introducing new designs and technology.

Developers

Some partners across the country are working closely with developers, not only for supplies of material but also as a sounding board for decisions on brands and materials. They front-end most commercial transactions and act as a trusted bridge between the brand and the developers. Large developers operating nationally have brands engaged with them directly however in many cities where the size of the project is less than 300 units and the developers belong to the same city making it a small-size/mid-size construction, channel partners become key players in introducing newer trends, materials, products and brands into the project.

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Teamwork

Today retailers and distributors are not classical hardware stores. They are one-stop solution hubs – supporting customers to digitally design their home spaces, with installation, finishing, and after-sales service. There is a full life cycle with each consumer – constructing or renovating. Hence, you see a professional sales team, design team, in-house structural experts, and dedicated technical staff for pre-sales, installation, and post-sales services to support the consumer journey. The partners have become business houses for the end-to-end needs of the consumer. With the new generation taking over the business, the trend is to introduce complementary products and value-added services which have been seamlessly incorporated into the existing business models, and the generational connect continues!

Women in business

There was a time and era when the building material industry was for men alone. I am so glad to see the shift. I see the 2nd & 3rd generations of partners introducing their daughters and wives into business; some of them independently handle the design & digital section and others handle a full customer portfolio. In my observation of consumers stepping into stores, women of the house make the decisions on products and designs. It is a trend that I noticed across India, the Middle East, and Africa. I do resonate with that and celebrate the fact that we now have women on the other side of the table too, closing the deals.

Complete solution

Each brand in the industry is moving into related segments to offer a full portfolio of home solutions either by way of innovation & development, acquisition, or consolidation. Bathroom and kitchen fittings, tiles, piping, paints, kitchen and furniture, lighting, security systems, outdoor furniture, doors and knobs, windows and façade, glass panels, and so on. The biggest trend is OEM, assembly lines close to the consumer base. The changing industry trend from a centralised to a decentralised model is driven by costs, inflation & access to consumers for growth.

Sustainable materials

Besides quality and technology, sustainability is key. This is because consumers, developers, contractors, designers, and architects are looking to contribute to the environment positively. The governments are also making it mandatory with water efficiency labels and energy-saving ratings on products to ensure compliance. Increased use of sustainable & recyclable materials, and processes is being considered as standard in many projects. We see a rising trend of pre-fabrication in the industry to meet the objective of sustainability while making construction efficient and cost-effective.

Forging powerful partnerships in the building materials industry – The way forward

The trend of Technology & IOT allows channel partners to differentiate while posing challenges of continued & new competition. Hence, a one-stop solution is the way forward:

• Service: With e-commerce on the rise, the consumer has access to products delivered to their doorstep. Value kicks in with Service! Every industry in the future will sell a service as ‘product will be a given’. Once the service reposes trust, going back for purchases (even with a premium) makes sense for a consumer.
• Personalisation: With the cross-section of brands and solutions, a unique proposition can be sold to consumers who yearn for personalisation. The consumer is ready to pay a premium when they can access an entire bouquet of products as an experience.
• Competitive space: It is no longer an exclusive business. Like many other trades, it has gone national and also transcended boundaries. The urbanisation has given rise to business partners spreading wings to different cities making service offerings competitive. It is a consumer-driven market; the more unique the proposition, consistency in service, and visibility for the consumer, the higher the chance is for trust and continued business.