Innovative and Affordable Products Uplift Prospects for Point-of-Use Water Treatment Systems Market in India, Finds Frost & Sullivan

MUMBAI, India - Growth in purchase power, non-availability of clean potable water, and the introduction of innovative, affordable chemical/resin-based products have given the Indian point-of-use (POU) water treatment systems market a significant boost. The residential water treatment systems market is in the growth stage in India as urban lifestyles evolve in tandem with increasing globalization and the rapid pace of development of the IT/ITES industry. Extensive marketing efforts by product suppliers have helped expedite awareness on the detrimental effects of water contamination.

New analysis from Frost & Sullivan (www.environmental.frost.com), Strategic Analysis of the Point-of-Use (POU) Water Treatment Systems Market in India, finds that market earned revenues of over INR 16,500 million in 2008 and estimates this to reach INR 50,758 million in 2013.

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The agricultural and industrial sectors utilize most of the water resources in India, leaving a meager portion for drinking purposes. Indiscriminate discharge of industrial and agricultural effluents into the rivers and lakes has contaminated the water resources, heightening the need for water purification processes. By 2015, the discretionary spending in Indian households would multiply manifold with the increase in growth of disposable incomes thereby increasing the purchasing power. These factors would trigger growth for the POU systems.

“Increasing focus on health among the urban population and non-effectiveness of conventional water treatment methods such as boiling of water has increased the usage of POU systems in Indian kitchens,” says Frost & Sullivan Research Analyst Nideshna Naidu. “Ultraviolet (UV) systems dominate the market currently, while chemical or resin-based systems are growing substantially at double-digit rates.”

The Indian POU water treatment systems market is highly fragmented with over 150 national, regional, and local participants in the fray. The buoyant sectors experience the entry of increasingly more participants each year and domestic demand is mostly met by indigenous manufacturing. Numerous small participants fight for their share of the pie at the bottom of the pyramid. Six major participants hold sway over the top tier, while a reasonable number compete for space in the middle tier.

Despite the immense opportunities, the market is fraught with challenges. Over the years, advertisement and brand awareness have become prominent competitive factors. The most crucial aspect is the funding necessary for the promotion of POU systems. Brand promotion plays a vital role in this market as it boosts product visibility.

Suppliers must ensure that products offered are of superior quality. Prompt after-sales service is another important criterion. Low cash flows prevent participants in the unorganized sector from building a good after-sales network.

“The lack of after-sales support and the supply of inferior products will result in the erosion of customer confidence,” says Naidu. “Thus, companies must ramp up efforts and develop a strong, technically sound after-sales support team to emerge as successful participants in this competitive space.”

The high cost of UV and RO systems have resulted in low acceptance levels among the middle and lower class sections; consequently, market penetration of these products has been curtailed. In such a scenario, the choice of distribution channel is critical for the enhancement of business prospects. Direct selling remains the best option for water treatment products in India. Retail selling is picking up momentum in India because of the slow but steady acceptance of water treatment products as consumer products.

Strategic Analysis of the Point-of-Use (POU) Water Treatment Systems Market in India is part of the Environmental Growth Partnership Service program, which also includes research in the following markets: Indian Waste Management Services market, and Indian Air Pollution Control Equipments Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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Strategic Analysis of the Point-of-Use (POU) Water Treatment Systems Market in India P2BC

Contact: Ravinder Kaur Corporate Communications - South Asia P: +91-44-42044760 F: +91-44-24314264 E: ravinder.kaur@frost.com Amrita Nandi Corporate Communications - South Asia P: +91-22-4001-3424 F: +91-22-2832-4713 E: amritan@frost.com Tanu Chopra Corporate Communications - Middle East P: +91-22-4001-3437 F: +91-22-2832-4713 E: tanuc@frost.com www.frost.com

Source: Frost & Sullivan (India) Pvt. Ltd.

Contact: Ravinder Kaur, Corporate Communications - South Asia, P: +91-44-42044760, F: +91-44-24314264, E: ravinder.kaur at frost.com; Amrita Nandi, Corporate Communications - South Asia, P: +91-22-4001-3424, F: +91-22-2832-4713, E: amritan at frost.com; Tanu Chopra, Corporate Communications - Middle East, P: +91-22-4001-3437, F: +91-22-2832-4713, E: tanuc at frost.com