Sanitaryware and construction materials producer Lixil Thailand Plc plans to launch innovative products, additional services and e-commerce to tap the high-end residential market for sales growth of 5% in 2018.
Country general manager Sitthirat Watcharaporn said the company will focus on the luxury housing segment this year because it has stronger purchasing power than the lower-end segment, which is struggling with mortgage loan rejections.
"Our marketing strategy is to target specific segments," he said. "Designs and materials for high-priced houses of 10 million baht or more should be different from or more attractive and innovative than those for houses priced at 3-5 million."
One of the innovative products for the luxury segment is sanitaryware with aqua ceramic technology. The product is claimed to reduce dirt and water stains.
Mr Sitthirat says the company will develop its customer services.
Smart sanitaryware such as shower toilet seats and spray nozzles designed specifically for women, as well as breathable indoor tiles that absorb harmful airborne substances, regulate moisture and eliminate odour, will be among the products Lixil will launch this year.
"A recovery in the sanitaryware and construction materials market this year should lead to momentum for the next few years," Mr Sitthirat said. "We will try to reach consumers and use programmes to speed up their purchasing decisions."
Lixil will expand to additional services like sanitaryware inspection for customers at housing projects for which the company supplies materials. Lixil started the service at a Land & Houses project in the third quarter last year and received positive feedback from customers.
This service includes visual and performance checks of Lixil's sanitaryware that has been used for a few years. Even if no defects are found, some customers want new supplies if there is a novel design or innovation, Mr Sitthirat said.
"In the housing renovation market, one of the key drivers of growth is the construction materials industry, which slowed last year as people were not confident to spend," he said. "We should boost demand with services."
Lixil's best-known offering is the American Standard brand, and it plans to be more aggressive on e-commerce promoting the brand. Products sold online include faucets and fitting materials.
Lixil aims for 5% sales growth this year. The company made the same projection last year, but sales in the residential segment were stagnant.
"2017 was the first year in the past decade where we had no growth," Mr Sitthirat said. "We recorded double-digit growth for 6-7 years before posting single-digit growth the past few years as the overall market cooled off."
He said there was residential demand in the middle- to lower-end segment, but several folks in the segment were rejected for mortgages. When developers launch products in the segment and encounter such rejection rates, they are hesitant to move to the next phase.
Some 60% of the company's sales were from the residential market, 15% from commercial properties, 15% from the government and institutions, and 10% from hotels.
Overall, the sanitaryware and building materials market depends on residential, which accounts for 80% of sales.
The hotel, office and community mall segments had healthy growth last year, but their impact was insufficient to build momentum because they represent only 20% of the market, Mr Sitthirat said.
He urged faster government spending to boost the construction materials market.