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Our strategy in emerging markets focuses on innovation and affordability

By Rahul Kamat ,

Added 16 May 2024

In an interview with Rahul Kamat, Jens Dallendoerfer Senior Vice President of Sales Region Emerging Markets, Wilo Group candidly talks about the company’s approach to making inroads in emerging markets.

How has your journey been so far with the Wilo Group, especially in the context of emerging markets?

My journey with the Wilo Group has been an exhilarating exploration of growth, innovation, and market dynamics, particularly in the context of emerging markets. Over the years, I have had the privilege of spearheading our efforts in regions like China, India, Korea, and Latin America. We are one of the few German companies, successfully working in Africa, too. Our business has grown from Euro 600 million to Euro two billion over the last 15 years.

One of the defining aspects of my journey has been Wilo's unwavering commitment to excellence and adaptability. We have embraced the unique challenges and opportunities presented by emerging markets, recognising them as fertile grounds for innovation and expansion. Whether it's navigating regulatory landscapes, understanding local preferences, or building robust distribution networks, every step has been a testament to our dedication to serving diverse communities with tailored solutions.

In these markets, we have at first-hand witnessed the transformative power of technology. From smart pumping solutions that optimise energy efficiency to digital platforms that enhance service delivery, innovation has been central to our strategy. By harnessing cutting-edge technologies and insights, we have been able to not only meet but anticipate the evolving needs of our customers.

Of course, the journey hasn't been without challenges. Economic fluctuations, geopolitical uncertainties, and infrastructure constraints have tested our resilience and agility. However, each challenge has presented an opportunity for learning and innovation, reinforcing our commitment to long-term success in these dynamic markets.

As emerging markets continue to evolve and transform, we remain steadfast in our pursuit of excellence, sustainability, and customer satisfaction.

When we talk about emerging markets, what market strategies have been particularly effective for the group and how do they differ from the established market?

In emerging markets, our approach to market strategies has been characterised by agility and a deep understanding of local requirements. One of the most effective strategies that we have deployed focuses on localisation and customisation. Unlike established markets where standardisation may serve, emerging markets demand tailored solutions that resonate with the specific needs, preferences, and challenges of diverse customer segments. For example, what you need in Europe - may not be relevant in Southeast Asia, Latin America, or Africa.

As we intend to become one of the leading pump manufacturers in the world, we need to have a wider range of products. Hence, our strategy in emerging markets focuses on innovation and affordability. Today, we have 15 international main production sites, and more are being built. With more than 80 production and sales companies, Wilo is represented around the globe.

Apart from China, Wilo has gained a foothold with sales and production sites in the billion-dollar market of India. The acquisition of Mather & Platt in 2005, a strong local producer, was an important step in this endeavour. In the medium term, the third global headquarters is being established in the USA. With the acquisitions of Scot, Weil, American-Marsh Pumps and QuantumFlo, Wilo has substantially expanded its business in the USA. Subsidiaries in the Middle East, Africa, Australia, and South America were also added.

However, conducting business in emerging markets comes with its own set of challenges and opportunities. In emerging markets, the interplay between risks and opportunities is indeed a dynamic and multifaceted landscape. While these markets pose unique challenges and uncertainties, they also offer immense potential and unlimited opportunities for growth and innovation.

One of the primary risks associated with emerging markets is their inherent volatility and unpredictability. Economic fluctuations, political instability, regulatory changes, and currency devaluations are just a few examples of the myriad risks that businesses operating in these markets must navigate. However, amidst these risks lie a plethora of opportunities waiting to be seized. One of the most compelling opportunities in emerging markets is the sheer scale of untapped demand and growth potential.

Given the rapid pace of technological change, how does the Wilo Group approach innovation in products and services for emerging markets?

For the last 20 years, most of our innovations have originated from Germany. But, at present, more and more innovations and developments are contributed by emerging markets. Moreover, digitalisation and smart technologies are integral to our innovation agenda in emerging markets. From IoT-enabled pumps that enable remote monitoring and predictive maintenance to digital platforms that enhance customer experience and service delivery, we are harnessing the power of data and connectivity to drive efficiency, productivity, and

reliability. For example, in China, there are buildings which require pumps that can communicate with each other digitally. Hence the pressure to develop such innovative products is higher in the emerging markets compared to mature markets.  

Our strategy to timely establish Wilo in emerging markets like India, China and Korea worked due to a strong focus on research and development (R&D). An excellent example of our customer-centric approach is our development of affordable and energy-efficient pumping solutions for emerging markets. Recognising the importance of cost-effectiveness and sustainability in these regions, we have invested in research and development to create pumps that not only offer superior performance but also minimise energy consumption and operational costs. These solutions not only meet the immediate needs of customers but also contribute to long-term sustainability and resource conservation.

India is our brain, our development centre, incubator for water management, for large pumps, fluid control, water supply to the cities, power station, cooling etc. China is our development centre for smaller pumps, especially in heating or in building service residential with booster systems. Korea, on the other hand, is our incubator for electronics for special applications.

What do you see as the current key trends in the water and pump industry within emerging markets, and how is Wilo positioning itself to capitalise on these trends?

In the water and pump industry within emerging markets, several key trends are shaping the landscape, presenting both challenges and opportunities for companies like Wilo. As Senior Vice President of Sales Region Emerging Markets, I have closely observed these trends and strategically positioned Wilo to capitalise on them effectively.

One prominent trend is the increasing focus on water conservation and sustainability. Emerging markets often face significant water scarcity and quality issues due to rapid urbanisation, industrialisation, and population growth. As a result, there's a growing demand for innovative water management solutions that minimise wastage, enhance efficiency, and promote conservation.

To address this trend, Wilo has prioritised the development of energy-efficient pumps and water management systems that optimise resource utilisation while minimising environmental impact. Our portfolio includes a range of high-efficiency pumps, smart water distribution networks, and IoT-enabled solutions that enable real-time monitoring and control, thereby helping customers mitigate water-related risks and achieve sustainability goals.

We predict that by 2050, almost 80 per cent of the population will live in cities. Rapid urbanisation and infrastructure development are driving demand for reliable and resilient water and wastewater systems in emerging markets. As cities expand and populations grow, there is a need for robust pumping solutions that can handle increased capacity, withstand harsh operating conditions, and ensure uninterrupted service delivery.

Wilo has responded to this trend by offering a comprehensive range of pumps and systems designed for urban water supply, wastewater treatment, and flood control. Our products are engineered for durability, efficiency, and adaptability, enabling us to meet the diverse needs of rapidly evolving urban environments in emerging markets.

Additionally, we recognise the importance of local partnerships and market insights in navigating the complexities of emerging markets. We collaborate closely with local stakeholders, governments, and industry players to co-create tailored solutions, address regulatory requirements, and build sustainable business models.

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