hinavamishra.com

Water Purifiers India Market Scenario By Abhinava Mishra [July, 2012]

hinavamishra.com

Index

• Overview of India Market

• Competition Mapping

• India tax structure, its implications on pricing structure & Trade margins

• ATL & BTL mapping of competition

• Key Market Insights

hinavamishra.com

Indian Consumer Market

An Overview of The

hinavamishra.com

India: Promising Growth Story

$4.6 T GDP (PPP), 2011

6.5% GDP growth rate, 2012

1.2 B Population of India,

2011

3RD Largest Economy of

the World (PPP)

350 M English speaking

population

35% Of the population is

aged under 20 years

hinavamishra.com

Top 100 Cities in India Cities Share of Population

Top 10 20%

Ahmadabad Bangalore Chennai Coimbatore Delhi

Hyderabad Kolkata Mumbai Pune Surat

Next 20 Top 30 36%

Asansol Bhopal Faridabad Indore Jaipur

Jamshedpur Kancheepuram Kanniyakumari Kanpur Kochi

Lucknow Ludhiana Madurai Nagpur Patna

Salem North 24 Parganas(Urban

areas)

Thane (Urban

Areas)

Thiruvallur

(Urban Areas)

Vadodara

Next 20 Top 50 45%

Amritsar Aurangabad Chandigarh Dhanbad Ghaziabad

Goa Guwahati Haora Hugli Jabalpur

Jalandhar Kolhapur Nashik Rajkot Rangareddi

Thiruvananthapuram Tiruchirappalli Vellore Vijayawada Visakhapatanam

Next 50 Top 100 58%

Agartala Agra Aizawl Ajmer South 24 Parganas

Allahabad Anantapur Bareilly Bhavnagar Bhubaneshwar

Bokaro Cuttack Daman Dehradun Durg-Bhilai

Gandhinagar Gangtok Guntur Gurgaon Gwalior

Imphal Itanagar Jamnagar Jodhpur Kannur

Kavaratti Kohima Kota Kozhikode Mangalore

Meerut Moradabad Mysore Noida Patiala

Pondicherry Port Blair Raipur Ranchi Raurkela

Rupnagar Shillong Shimla Silvassa Solapur

Srinagar Thanjavur Thrissur Udaipur Varanasi

331

Delta Cities – Budding Centers

Gamma Cities – Upcoming Cities

Beta Cities – On the Threshold

Alpha Cities – The Elite Club of 10

All Urban Locations (Mn)

Within these 100 cities, the top 50 account for

•45% of the urban population

•50% of the incomes, savings, expenditures, and assets.

•70% of urban commercial bank deposits and credit

•The top 30 cities account for more than half of all urban credits and deposits.

hinavamishra.com

Key Drivers Favorable demographics

• Population growth - adding

one Australia every year

• Growing consuming class

• Very Young population • 20% in10-19 yrs

• 45% in 20-49yrs

• Increasing population of

working women

• Growth in organized retail

• India’s e-commerce market is

$8.9Bn

hinavamishra.com

Water situation in India – Why Purifiers?

7

5% of India’s fresh water resources

available for Municipal use. Rest

goes into agriculture & industries

20% of India’s 240 Mn households have

to travel more than half a KM to

fetch drinking water

170 M People in India do not have

access to clean drinking water

$600 M Cost of lost productivity and

expenditure for medical treatment

due to water-borne diseases.

21% Of all diseases in India are caused

due to drinking of impure water

Sources: World Bank, Census of India & others

hinavamishra.com

Water Purifier Market

Water Purifier Market

hinavamishra.com

Key Market Insight Size, Penetration & Share

9

Geography

Penetration Level

All India 1.85%

Delhi 24.59%

Mumbai 14.93%

Tamil Nadu 2.46%

Haryana 2.16%

West Bengal

2.07%

Punjab 1.91%

Karnataka 1.65%

Bihar 0.42%

Water Purifier

Penetration Level

So

urc

e: Fra

nc

is K

an

oi M

ark

et

Re

sea

rch

$560 M Present Market Size (Home +

Large Scale water purification) 25% Current CAGR

$1.23 B Estimated market size

by 2015 7.1 M Sales volume (units) in 2011

So

urc

e: A

SSO

CH

AM

2012

So

urc

e: TV

J R

ese

arc

h 2

011

91

Value ($Mn)

66

47

hinavamishra.com

10

Water Purifiers: Key Market Insight

Acute shortage of fresh water resources

Lack of Govt. initiatives

Technological advancement

Launches of affordable products

Very low penetration

Rural: Lack of awareness among consumers

Urban: Aware but not very conscious

Inertia to ‘buy’ a natural resource

Less no. of serious players

BOP yet to get the right solution

40

Value ($Mn)

35

6

9

31

Value ($Mn)

9

3

2

2

0.4

49

Value ($Mn)

12

5

0

Key Market Insight Category wise Market Size

hinavamishra.com

Vo

lum

e

11

Key Market Insight: Evolution

1980’s 1990’s 2000’s 2005 2010

Chlorine

Based

Purifiers

Electric UV water purifiers made popular

by Eureka Forbes Electric RO

water purifiers

made popular

by Kent RO

Non-electric low cost Activated Carbon based

purifiers introduced by Unilever & Tata

Pri

ce

Po

int

High

Low

High

Low

Bottled Water

Key Market Insight Category wise Market

hinavamishra.com

Water Purifiers: Key Market Insight

Key Success Factors in the current market:

1. Trust through customer education & interaction

The brand must establish direct contact with consumers to educate them

about the functional benefits of the purifier and thereby develop trust

(confidence) for the product & the brand in the consumer’s mind in order to

just get an entry into the consideration set of the consumer.

2. Superefficient filters

India has a diverse geography with the water quality & the type of impurities

changing at every 100 KMs or even less. Filters need to be capable of

removing multiple impurities to cope with this issues.

3. High VFM Indian consumer demands more value for their money compared to

consumers in many other developed as well as developing countries and

therefore brands that can keep the initial product price, the cost of the filter

replacement lower and the longevity of the filter higher will have bigger

chances of winning the market.

Key Success Factors

hinavamishra.com

Water Purifiers: Key Market Insight

4. After-Sales Service Quality

As most of the models are installed at home, visiting the consumer’s home with a

very short TAT is of utmost importance. Delays & poor service causes major

dissonance and negative WOM

5. Awareness, Visibility & Availability (Distribution)

The brand & product has to be well promoted through ATL & BTL activities to

substantiate the Trust factor. It is also very important to be visible on the shelves of

the retail outlets and to be available in wide variety of outlets.

Key Success Factors

hinavamishra.com

Water Purifiers: Competition Mapping

Competition Mapping For Water Purifiers in India

hinavamishra.com

Market Segments & Need Gaps

15

MR

P R

s.

50

0 –

4,9

99

M

RP

Rs.

50

,00

– 2

0,0

00

MR

P >

Rs.

2

0,0

00

M

RP

Rs.

1

00

– 4

,99

Late

nt

ne

ed

fo

r a

po

rta

ble

pu

rifie

r

hinavamishra.com 16

Portable Water Purifiers Product Features, Consumer Pricing

PORTABLE WATER PURIFIERS

Brands Life Straw Aquamira Katadyn Seychelle Kent Ion Exchange

Models Straw Bottle Bottle Bottle TapGuard ZeroB Suraksha

MRP $29.95 Rs. 2,800 $31.99 Rs. 2,300 Rs. 349

MOP Rs. 2,800 RS. 2250 Rs. 299

Purpose Rural/ Camping Travel/Sport Travel/Sport Travel/Sport Urban Travel On Tap

Tech Used Mesh, PolYESter, Iodine & Carbon

Porous Plastic Carbon Filter

Electrokinetic Fiberglass pre-

filter and carbon filter

Ionic-Adsorption Micro-Filtration &

activated coconut carbon

Granular Activated Carbon,

Polysulfone Hollow Fiber UF

Membrane Resin Expansion

Filteration stages 4 1 3 1 1 1

Capacity 0 0.65 ltr 0.6 ltr 0.7 ltr 0 0

Pure water Storage 0 0 0 0 0 0

Electricity NA NA NA NA NA NA

Purification

Bacteria, Protozoan,

Particles >0.2micron

Giardia, Cryptosporidium

and other pathogens

Bacteria, Protozoan,

Particles >0.3 micron Bacteria & Virus

Rust, Bacteria, Cyst, Coliform Bacilli, Micro - organisms & Microscopic

impurities Bacteria & Virus

Tap connection NA NA NA NA Direct Direct

Purification life 1000 ltr 380 ltr 100 ltr 380 ltr 1500 ltr 7500 ltr

Certification None NSF/ ANSI

Filter Life Indicator NO NO NO NO NO Yes

hinavamishra.com 17

Home Water Purifiers Product Features, Consumer Pricing, Trade Pricing & Schemes

INDOOR WATER PURIFIER

Brands Pureit Pureit Pureit Pureit Pureit Aquagurad Aquagurad TATA TATA Kent Kent Kent Kent Kent

Models Intella Pureit Compact Classic Autofill Marvella Aquasure Amrit Aquasure Xtra Smart Swach

Gold

Optima Gold Gold Plus Crystal Cool Gold

MRP Rs. 900 Rs. 1,200 Rs. 2,200 Rs. 3,200 Rs. 6,900 Rs. 2,250 Rs. 1,490 Rs. 899 Rs. 1,199 Rs. 1,250 Rs. 2,495 Rs. 2,500 Rs. 2,950 Rs. 3,600

MOP Rs. 900 Rs. 1,200 Rs. 2,200 Rs. 3,200 Rs. 6,900 Rs. 2,250 Rs. 1,450 Rs. 850 Rs. 1,100 Rs. 1,200 Rs. 2,200 Rs. 2,400 Rs. 2,900 Rs. 2,900

DP 800 1111 2037 2986 6462 2070 1334

Scheme 45 60 110 160 345 113 73

Dealer NLC 783 1044 1914 2784 6003 1957.5 1261.5

Dealer Margin 13% 13% 13% 13% 13% 13% 13%

Distributor Margin 4.75% 4.75% 4.75% 4.75% 4.75% 4.00% 4.00%

Purpose Home Home Home Home Home Home Home Home Home Home Home Home Home Home

Tech Used

1. Microfiber

Mesh

2. Compact

Carbon Trap

3. Programmed

Chlorine release

4. Polisher

1. Microfiber

Mesh

2. Compact

Carbon Trap

3. Programmed

Chlorine release

4. Polisher

1. Microfiber

Mesh

2. Compact

Carbon Trap

3. Programmed

Chlorine release

4. Polisher

1. Microfiber

Mesh

2. Compact

Carbon Trap

3. Programmed

Chlorine release

4. Polisher

1. Pleated Filter

2. Activated

Carbon Filter

3.Programmed

Chlorine release

4. Polisher

Sediment cum

Carbon Block 4

step filteration

Positive Charge

Technology

Silver

Nanotech

nology

purificatio

n

Silver

Nanotech

nology

purificatio

n

UF Storage

Water

Purifier

Technolog

y

UF Storage

Water

Purifier

Technolog

y

UF Storage

&

Activated

Carbon

Filter

UF Storage

&

Activated

Carbon

Filter

UF Storage

&

Activated

Carbon

Filter

Filteration stages 4 4 4 4 4 4 4

No

Chlorine

No

Chlorine

UF Memb, Nano silver impreg

carbon

UF memb, Sediment,

Activated Carbon, SS

Screen

no chlorine

Capacity 12 14 lit 23 23 20 18 5 18 10 20 20 15 20

Pure water Storage 5 5 9 9 11

Electricity no No No NO NO no no no no no no no no no

Purification Bacteria & Virus Bacteria, viruses & cysts Bacteria, viruses & cysts

Tap connection No

No tap

connection

No tap

connection Direct no no no no no no no

Sensor/ auto off YES YES

Auto store YES

Purification life 1000 lits 2250/1500 lit 2250/1500 lit 2250 lit 750 lit 1500 3000 3000 4000 lits 4000 lits 4000 lits 4000 lits 4000 lits

Certification EPA USA EPA USA EPA USA EPA USA WQA USA WQA USA WQA USA

Jug YES 8 hrs

Autolock YES

Autoshut at end of life YES YES YES YES YES YES

Germ kill life indicator YES YES YES YES YES

Wall mount No No No No YES

Indicator

hinavamishra.com

Pricing, Duty & Tax Structure

18

Sorry, the content of this slide can not be accessed.

Pls contact the author for any assistance.

hinavamishra.com 19

Pricing, Duty & Tax Structure

Sorry, the content of this slide can not be accessed.

Pls contact the author for any assistance.

hinavamishra.com

ATL & BTL Mapping – Print Ads

20

TATA Swach – Print Ad Eureka Forbes – Print Ads

Pureit – Print Ads

Kent RO – Print Ad

hinavamishra.com 21

Kent Water Softner: http://www.youtube.com/watch?v=aI3_1C0rb0U&feature=relmfu Kent Gold: http://www.youtube.com/watch?v=4IQj_lzqhPw&feature=relmfu

Unilever Pureit Marvella: http://www.youtube.com/watch?v=fR-7v3tEa1o&feature=related Unilever Pureit: http://www.youtube.com/watch?v=pm-XXW5Ce6w Unilever Pureit (Rs. 10 Mn Challenge): http://www.youtube.com/watch?v=pA9Rkm_UdCk Aquaguard: http://www.youtube.com/watch?v=IK84xjLTPUM&feature=related Aquasure: http://www.youtube.com/watch?v=A6r5_xZtPHI Whirlpool TVC: http://www.youtube.com/watch?v=uptyMZvy5fs

ATL & BTL Mapping – TVCs

hinavamishra.com 22

ATL & BTL Mapping – Activation

hinavamishra.com 23

Water Purifiers: Possible Collaborations

… either reach for the Mass Market

• Collaborate with various Govt. departments working on drinking water project under Public Private Partnership (PPP) projects

• Collaborate with various NGOs working on projects funded by International agencies like UNICEF to provide safe drinking water at a subsidized rate

… or reach to the Premium Market

• Collaborate with premium brands in the space of travel & adventure

• Collaborate with various organisations that promote Environmentally friendly products / services.

hinavamishra.com

Water Purifiers: Competition Mapping

Thank You