Competition hots up in water purifier business

Competition hots up in water purifier business

NEW DELHI: Buoyed by a growing demand on the back of increased awareness, competition in the water purifier space in the country is getting intense with companies vying to guzzle maximum share of the Rs 1600 crore industry. Besides domestic players, the industry is fast becoming a hotspot for international companies such as Amway and Panasonic, which are now eyeing an entry into the segment in India.

Direct selling company Amway, which is present in personal care, beauty and nutrition segments, is working on three-year strategy for India and plans to launch water purifiers from its global portfolio in 2015. While the plan is still on the drawing board, Amway said it plans to focus on the premium range for the product. Japanese durables firm Panasonic too is planning to venture into this category in September this year.

Local players at their end are betting on a wider consumer base through products across diverse price points to handle competition. Market watchers say the strategy is justified by the fact that demand is growing faster in smaller towns and cities as compared to the metros. FMCG major Hindustan Unilever ( HUL) recently entered into the premium segment with the launch of Pureit Marvella RO. The company has products from Rs 900 to over Rs 13,000. Tata’s Swach sells product priced as low as Rs 499. Despite more than 85% of sales coming from the premium segment, Kent RO Systems has a “growing percentage” of its demand coming from tier II and tier III towns.

“There is a lot of demand coming from smaller towns as the problem of getting pure water is more severe there. Although our maximum sales happen in the Rs 13,000 to Rs 17,000 range, we have launched low priced products too,” said Mahesh Gupta, chairman, Kent RO.

For most of these companies, demand for premium products too is growing at a 3-4% faster rate in smaller towns as compared to bigger cities. “With public awareness growing, demand in this market will only increase as consumers are now willing to pay. Companies need to focus on the after sales service to ensure growth,” said Arvind Singhal, CEO, Technopak, a consulting agency.

Despite smaller players joining the fray, experts say it would not be easy to take on market leaders like Eureka Forbes, who are increasingly banking on innovation as a key differentiator. Eureka Forbes has a turnover of Rs 750 crore in the water purifier segment. It recently partnered with Water Security Corporation, an American start-up to launch a low-cost purifier and is scouting for firms to partner with to enhance technical innovations. “We are constantly working on technology for new product offerings. Challenge, however, is the after sales service,” said Marzin Shroff, CEO, direct sales, and senior V-P, marketing, Eureka Forbes. The company employs 5,000 people to provide services.

Despite a growing demand, experts say the industry is still under penetrated due to inability of companies to work out a balanced price-value equation.

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