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A safe sip

Rising awareness about water-borne diseases, increasing disposable incomes, growing urbanization and a low penetration level are some factors that are pushing sales of water purifiers across India
By team B&C
India is among the developing countries where quality of water is highly deteriorated. Considering the status of water availability in India, it creates tremendous opportunity for companies to make an entry into the water filters market. Rising awareness about water-borne diseases, increasing disposable income, growing urbanization and low penetration level are exceedingly contributing to the demand for water filters in India.
Out of 220 million Indian households, around 9-10 million homes are estimated to own water purifiers. According to industry studies, the sales of water purifiers across India are likely to cross 1.5 crore units by 2015 from the current level of over 78 lakh units. The growth was driven by rising sales of low-cost variants due to extreme shortage of drinking water across the country.
The market is categorised into activated and non-activated carbon based water filters, where the former accounts for major revenue generation because of its wide application in residential sector. On the other hand, non-activated carbon water filters, especially sand filters, are more preferred in the commercial segment.
Currently the total market size of organised water purifier is at around Rs 3,800 crore and is projected to grow to Rs 7,000 crore by 2015, according to a recent study by Assocham. The Indian water filters market accounts for only 1 per cent to the global market, however, it is anticipated to grow more than two folds by revenue in the next five years. The segment has been growing at a compounded annual growth rate (CAGR) of about 25 per cent, and has been pegged at 16 per cent during the period 2013-18.
The offline water purifier segment will account for 38 per cent of the total market space in 2016. The growth of the offline segment will primarily be attributed to low pricing, enhanced penetration across rural population and households. Given the increasing awareness, and largely untapped market potential, the sector is expected to grow at a CAGR of more than 20 per cent till 2016.
RO water purifier is the largest segment accounting for 42 per cent of the market, while offline water purifiers contributed for about 20 per cent of the market. However, by 2016, offline water purifier segment is expected to grow at a very rapid pace and increase its share to about 38 per cent of the total market and is a key focus area for water purifier manufacturers, due to the large target customer base it offers, is expected to continue its rapid growth.
Sales have been increasing every year, says a Mapusa-based dealer, with the monsoon season witnessing a rising trend. There are three types of water purifiers marketed in India – the ultra-violet, reverse osmosis (RO) and resin- based one. RO-based purifiers are the most expensive – priced at Rs 13,000 and above, while UV-based purifiers are priced between Rs 5,000 and Rs 9,000. The non-electric water purifiers are more affordable at Rs 1,500 onwards, and are also in demand as they are ideal for locations where power supply is unpredictable, with the added advantage of requiring continuous water supply.
A Panaji-based seller says that one should look at the storage capacity and also other factors viz number of days the water remains fresh, service and maintenance before choosing a purifier. After-sales service is expected to remain as the most important non-product competitive factor in the POU water purifier market as consumers are very particular about the maintenance cost. The share of revenues from after-sales services and replacement filters is showing an increasing trend. Eureka Forbes, Kent, Hindustan Unilever (HUL), Whirlpool, Electrolux and LG in the RO water purifier market in India. The market participants have started focusing on innovative and cost-competitive technology, with better quality and third-party certified products meeting international standards. New entrants in the gravity purifiers segment have increased the opportunity size for the water purifying market as it has been able to envelop the Bottom of the Pyramid (BOP) segment of the population as a target market for the water purifier. This segment of the population was not considered a target market by incumbent water purifier makers.

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