Decoding the survival kit that helped Mumbai-based Cello Group tide over the COVID-19 crisis
“2020 was a tough year for everyone,” says Gaurav Rathod, a fourth-generation entrepreneur and Director, Cello Group. However, Gaurav feels that despite being a heavily offline-operating company,managed to survive the crisis and hopes to bounce back to “pre-pandemic levels”.
Started in 1967 by Ghisulal Rathod, Cello is not a new name in the Indian market.
Gaurav says his great-great-grandfather started the company by making plastic bangles and polyvinyl chloride footwear in Mumbai. Today, it is known for manufacturing and selling a diverse range of products from glassware to kitchen appliances.
Experts have often said that the company’s “elasticity” has helped it survive and stay strong as a company amid competition from players like Borosil, Tupperware, Milton, Treo, Nilkamal, and many more.
Cello has had quite a journey.
From seven machines and 60 workers, the company today employs about 6,000 people and has factories in Haridwar, Kolkata, Chennai, Daman, Pardi, and Baddi. Additionally, the pens and stationery business, for which it was widely known, was sold off to French company BIC in 2013.
Talking about what led to pulling the curtains on that business, Gaurav says, “We felt saturated and it was not growing as much as we would have liked.” He adds that they were getting a “good value out of the deal” and “the money would help them compensate for other businesses”.
In an interaction with SMBStory, Gaurav decodes how the last 18 months have been for the company along with Cello’s future plans.
The survival kit
Being in the business for more than five decades, Cello had a hang of uncertainties associated with business cycles. In the past, the company has survived changes in governments, introduction of new policies, the dotcom bubble burst, the 2007-08 financial crisis, and more.
Gaurav outlines three key aspects as part of the company’s strategy to survive tough times: churn out new products, grow horizontally, and focus on fulfilling the needs of the customers.
In the 1980s, the company launched plastic houseware products. In the nineties, Cello ventured into the furniture category, and in 2017, Gaurav, who joined the business seven years before, launched the ‘opalware’ segment.
When the COVID-19 pandemic hit in 2020, Cello saw demand for several products going up and down.
Since people had stopped carrying tiffin boxes and water bottles to offices, schools, and universities, the revenues of the company took a hit. Consequently, demand for products such as dinner sets or those belonging to the cleaning category shot up by almost 200 percent.
“People were replacing old crockery with new items,” he says.
Gaurav is optimistic about coming times and believes that since offices and other educational institutions are opening, pent-up demand and reduction in the dependence on exports will help them recover to the pre-pandemic levels.
(L-R) Pankaj Rathod, Pradeep Rathod, Gaurav Rathod along with Ghisulal Rathod (on the chair)
From offline to online
For a long time, Cello sold its products through the offline channel, including its presence across 50,000 retail touchpoints and 600 outlets. People wanted to have the touch-and-feel experience before buying products.
When the COVID-19 pandemic struck Indian shores, Gaurav says he knew that online was the way forward. “Although we have been selling traditionally, our products are ecommerce-friendly,” he says.
The company does not have an online store, but sells through websites such as Amazon and Flipkart. Amazon contributes the maximum to its overall online business. “It’s been six years with Amazon now!” he says.
Gaurav adds that their website is “only a point of reference for the products listed online”.
Going forward, the company soon plans to open an online store. In the next 12-18 months, Gaurav also emphasises that the company’s aim is to identify opportunities within the Indian market and expand its portfolio while expanding its digital and offline footprint.
“We expect to grow 7X in the next three years,” Gaurav says.
Revealing a key takeaway for companies to survive COVID-19 or any crisis, Gaurav says, “A company’s ability to quickly respond to market changes and serve customers with the best products at affordable prices provides it an edge in the market. Customers have continued to repose their trust in the [our] brand.”
The company’s diversification strategy has made all the difference, Gaurav says.