INDIAN WATER PURIFIER

INDUSTRY
By
Anshul Ghiya
Vikas Jain
Shruti Khandelwal
Some Hard
facts:
• 1 in every 10 diseases and 6% of all deaths globally
are caused by lack of Sanitation
• In India – 1.03 crore people die annually
 7.8 lakh (~7.5%) deaths are related to water,
sanitation and hygiene

 In the past 10 years diarrhea has killed more children

than all the people lost to armed conflict since World
War II.

 Some 6,000 children die every day from diseases

associated with lack of access to safe drinking water,
inadequate sanitation and poor hygiene – equivalent
to 20 jumbo jets crashing every day.

-WHO REPORT 2008

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Hard Facts Continued..

At any one time it is estimated that

half of the world’s hospital beds are
occupied by patients suffering from
water-borne diseases.

-The Economic Times

3
What is a water purifier?
• A water Purifier is a device that removes contaminants
such as parasites, algae, viruses, bacteria, minerals,
fungi, toxic metals, and manmade chemical pollutants
from water. Water purifiers remove these contaminants
from raw water to make it pure and safe for human
consumption. They also improve water odour, taste,
and appearance.
      
• It is a large unit that usually stands beside the sink or
under the counter and that is attached to the top or the
side of the tap by a hose.
Features of a Good Water
Purifier:
• It should Retain natural quality of water.
• Absolutely safe for drinking purpose as per WHO standards.
• User friendly features.
• Long Life.
• In-built storage tank.
• Avoids all contamination with last point purification.
• Low Maintenance.
Types of water purifiers

• Reverse Osmosis
• Carbon Filters
• Ion Exchange based
• UV based
• Integrated
PORTER’S FIVE FORCE
MODEL FOR WATER
PURIFIER INDUSTRY
Threat of new Entrants- High
Market entry barrier is not High.

Brand Identity.


Low cost of capital imposes a Low entry barrier.



High R&D cost.


Market Exit Barrier are also not so high.

Intensity of Rivalry among
existing Competitors- Very High
Customer loyalty is very capricious.

• Entry level Advertisement war in water purifiers.

• Low profit margins.

• Perceived lack of differentiation in technologies by customer.

•
Pressure From Substitute
product - Medium
• Packaged drinking water.

• Ground water / Municipal Supplies.

• Chemical distributed by government to clean water.

• Boiled water.

• Tablet Purifier
Bargaining power of Suppliers –
--High

• Supplier's product is an important input to the

buyer’s business.

• Number of suppliers are also few.

• Supplier to buyer ratio.

Bargaining power of Buyers
Customers are price sensitive.

Spreading towards rural areas with increased awareness and health

consciousness.

Buyer switching suppliers based on prices and value added services.

 Porter’s 5 Forces - Water Purifier
Rivalry among Existing New
Threat of New Entrants:Industry
-Market entry barrier is not High.
Competitors: Entrants -Brand Identity.
-Customer loyalty is very capricious. -Low cost of capital imposes a Low
-Entry level Advertisement war. entry barrier.
-Low profit margins. -High R&D cost.
-Perceived lack of differentiation in -Market Exit Barrier are also not so
technologies by customer high.

Industry
Competitiveness
Supplier’s Customers
/
Suppliers: Market Share Customers:
- Supplier's product is an important input to the -Customers are price sensitive
Rs. 1500 crores -Spreading towards rural areas with
buyer’s business
-Number of suppliers are also few. Increased awareness and health
-Supplier to buyer ratio. consciousness
-Buyer switching suppliers based on
Threat from Substitutes: prices and value added services
-Packaged drinking water
-Ground water / Municipal Technology
Supplies Technology:
-Chemical distributed by -Reverse Osmosis
government to clean water Substitutes -Ozone Treatment
-Boiled water -Resin based
-Tablet Purifier -UV based
 INDUSTRY
ATTRACTIVENESS
Why is the Water Purifier Business
Attractive in the Current Market
Scenario?
• Water is a $400 billion global business.

• Demand for drinking water is expected to grow

another 40% by 2025.

• Global consumption of water is doubling every 20

years, more than twice the rate of human population
growth.

• According to the United Nations, 1.3 billion people

already lack access to “safe” drinking water.

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GLOBAL WATER MARKET
• More than 97% of the
world’s water reserves are
salt water, contained in the
Earth’s oceans.

• Just a small proportion of

the 1.3 billion square
kilometers that make up
the world’s water reserves
is fresh water.

• Only 0.4% of those Source: www.forestinfo.org

reserves is accessible.
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Water Scarcity
• Among countries likely to run short of water in
the next 25 years are Ethiopia, India, Kenya,
Nigeria, and Peru. Parts of other large countries,
such as China, already face chronic water
problems.

• The supply of available freshwater is effectively

shrinking because of pollution including
municipal sewage, toxic industrial waste, and
harmful chemicals from agricultural activities.

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Water Scarcity

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Penetration of household
water purifiers in India

Source: R S Rajan, vice president, consumer marketing, Ion Exchange India Limited, Mumbai, personal
communications, February 20, 2008
Major players in INDIAN
MARKET
• Eureka Forbes
• Philips
• Kent
• Tata
• Jaipan
• Kenstar
• Whirlpool
• Others
Cost Wise Market
Segmentation

• Lower Segment
• Lower Middle Segment
• Upper Middle Segment
• Upper Segment
COST WISE DISTRIBUTION
Cost of Filter Houses (%)

<1,000 13
1,000 to 9
2,500

2,500 to 28
5,000

>5,000 50
 ANY
QUERIES
??
Slide No. 24