Bath Fittings and Accessories Market in India 2009 - Market Size, Drivers and Challenges

Bath Fittings and Accessories Market – India (Part I)

November 2009

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2BATH FITTINGS AND ACCESSORIES MARKET – INDIA.PPT

Executive Summary

Market

Drivers &

Challenges

Trends

Competition

�Bath fittings & accessories market is valued at INR 18 bn in 2008; Expected to reach INR 40 bn in

2012

�The market is 55% organized

�Market is mainly concentrated in urban areas

Drivers:

– Increasing urbanization

– Increase in disposable income

– Growth in real estate sector

– Growth in hospitality industry

– Increasing awareness level among consumers

Challenges:

– Market restricted to urban areas

– Low replacement demand and small

bathroom sizes

�Manufacturers providing complete bathroom solutions

�Water conservation technology

�Tie ups with architects, builders and interior designers

�Popularity of imported fittings

� Jaquar commands a market share of 45-50% in the organized sector

�Both domestic and the foreign manufacturers are supplying products in Indian Market

�Foreign players either have partnerships with Indian players or have their own subsidiaries

�Companies also market directly to builders and corporates




•Market Overview

•Drivers & Challenges

•Trends

•Competition

•Key Developments




55% Organized

45%Unorganized

Market is dominated by the organized sector

•Bath fittings products in India have evolved

from a low involvement functional product to

a lifestyle statement

•Bath fittings market is growing on account of:

�Rapid urbanization

�Rising income levels

� Increasing awareness level

•Companies are constantly innovating and

launching new products with new designs and

features

•Both the basic and designer bathroom

accessories are available in the market

•Market is dominated by the organized sector

including manufacturers as well as importers

•Key players in the market include Jaquar,

Marc, Crabtree

Market Overview Market Size and Growth

Organized Vs Unorganized Split

Source: Hindu Business Line “ Grohe bullish on growth prospects in India” April 2009 ; Business Standard “India to become hub for Sanitaryware “ August 2007; Universal

Media Group “ India Now More than Ever”; “Bathroom fitting industry”; “Parryware Unveils "Crestia" The Premium Segment Bathroom Solutions for Mumbai” September

2008

40

18

0

10

20

30

40

2008 2012e

+22%

INR bn




Key Segments

•Robe Hooks

•Toilet Roll Holder

•Towel Rods

•Towel Rings

•Soap dishes

•Wall trays

•Grab bars

•Mirrors

•Bathroom Furniture

•Shower Trays

•Rain Showers

•Overhead showers

•Hand Showers

•Shower Hoses

•Bath cubicles

•Shower Panels

•Shower Enclosures

•Faucets�Half turn fittings

�Quarter turn fittings

� Single lever fittings

� Full lever fittings

•Cabinets

•Mirrors

Accessories Bath Fittings Faucets and Basin Fittings

Key Segments

Note : For the purpose of this report, Bathroom Fittings and Accessories market does not include tiles and ceramic

plumbing fixtures such as sinks, and sanitaryware products such as lavatories or toilets




•Market Overview

•Drivers & Challenges

•Trends

•Competition

•Key Developments




Drivers & Challenges - Summary

Increase in disposable income

Growth in hospitality industry

Increasing awareness among

consumers

Drivers

Increasing urbanization

Growth in real estate sectorLow replacement demand and small

bathroom sizes

Challenges

Market restricted to urban areas




Increasing urbanization has led to a growing market of

bathroom fittings and accessories

• India is witnessing massive migration of population from rural areas to urban areas

• Post Independence era, while the population of India had grown three times, urban population

grew five times

• About one-third of urban India lives in metropolitan cities which has a million plus population

• Rapid urbanization has led to increase in standard of living, in turn creating demand for

superior bathroom fittings and accessories

Increasing urbanization Impact

550

285

217

62

0

100

200

300

400

500

600

0

10

20

30

40

50

1951 1991 2001 2021e

Urban Population (mn) As % of total population

Trends of Urbanization Number Of Cities With Million Plus Population

40

23

51

0

10

20

30

40

1901 1951 1991 2001

Source: Assocham Study, “Urbanisation in India” June 2006 ; “Urbanization in India and its impact on environment” 2005 ; Overview of Urbanization in India




Increase in disposable income has empowered Indians to

spend more on products like bath fittings & accessories

• With economic growth driving incomes, the purchasing power will increase significantly across

all consumer groups creating one of the largest consumer groups globally

• Majority of the Indian families didn't consider installing stylish bathroom fittings earlier. But

with the increase in disposable income, the middle and upper classes are willing to spend more

on their lifestyle products such as bathroom fittings and accessories

• People are opting for bigger and bigger bathrooms as a sure sign of luxurious living. increasing

the size also gives a chance of adorning it with exquisite fixtures

Increase in disposable income Impact

Source: McKinsey Global Institute “Rise of India’s consumer market”

9%

7%13%49%

23%

24

2005

15%9%

34%

33%

9%

2015

24%

23%

34%

15%

3%

90

2025

Globals

Strivers

Seekers

Aspirers

Deprived

44

Aggregate Annual Disposable

Income (INR tn)

Per household annual

income (INR ‘000)

Core target

consumer

groups

>1000

500-1000

200-500

90-200

<90

1%1%5%

44%

49%

207

2005

1%2%

23%

43%

30%

244

2015

3%12%

34%

33%

18%

281

2025

Total No. of Household (mn)




Real estate sector is a key target segment for bathroom

fittings and accessories industry

• India is witnessing an increased demand for residential houses driven primarily by increasing

urbanization and income levels

• A home with at least one bathroom has become a basic necessity in urban areas, which in

turn has led to an increase in demand for bathroom fittings and accessories

• Although housing constitutes three quarters of real estate, commercial construction has also

witnessed an impressive growth

� About 80% of the demand for office space is driven by the IT/ITeS sector, India has over 3,000 IT service

providers

– The IT industry grew by 21-24% in 2007-08

– The IT-enabled services (ITeS) sector grew by 28% in 2007-08

• Growing office and residential spaces would require sophisticated interiors this will lead to

increase in demand for high-end bathroom fittings and accessories

Growth in real estate sector Impact

Source: “Overview of the furniture sector in India” April 2007; IBEF “Furniture Market & Opportunities”; Financial Express “Global real estate funds to invest $5 billion in

India” September 2007; “From bathrooms to glamour rooms” October 2006; Tribune “Real Estate” October 2009;”Annual Report: Hindustan Sanitaryware & Industries

Limited” 2007-08

1,874

656

0

1,000

2,000

2008 2012

+30%INR bn

Real Estate Growth

16

4

0

10

20

1988 2004

+10%mn sq-feet

Demand for Office Space




Growth in hospitality sector and increasing awareness is

driving the bath fittings and accessories market

• The hotel industry is facing a deficit of 150,000 rooms

� Demand is expected to exceed supply by at least 100% over the next two years

• 40 brands are expected to set-up budget hotels in the next five to seven years in India

• Government has approved 300 hotel projects, half of them are in the luxury range, leading to a

growing demand for premium bath fittings and accessories

Growth in hospitality industry Impact

Source: in news; “Hospitality Demand Likely To Record CAGR Of 8 To 10% By 2011 Says C&W” January 2009; Business Maps of India “Hotel Industry in India”; ”Annual Report: Hindustan Sanitaryware & Industries Limited” 2007-08; Hindustan Times “Want a brand new bathroom? Try this one...” July 2009; Hindu Business Line “`Bathrooms have become fashion statements‘ July 2007; DNA “As Indians turn look-savvy, global brands tiptoe in” December 2007; “The Hindu ”When utilities jazz up the bathroom” July 2008

Demand Supply Gap

260,000

110,000

0

200,000

400,000

DemandSupply

Rooms

150,000

• Large scale advertisements by the organized players have helped in creating product awareness

and hence the demand for bathroom fittings

• Sizeable Indian population has traveled and has come across high end products which they now

want in their bathrooms

• Perceived as a necessity few years ago, bathrooms have now evolved into style statements

• Consumers are focusing on bathroom as a living space, they are spending more time in

bathrooms, not merely for hygiene reasons, but to relax, recreate and get a sense of well-being

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Low demand in replacement market, small bathroom size &

concentration of market in urban areas impede industry

Market Restricted to Urban Areas

• Majority of houses in rural India lack basic amenities such as presence of bathrooms, this has

restricted the market to urban areas

Impact

Source: SKP Research “Cera Sanitaryware” January 2007; DNA “As Indians turn look-savvy, global brands tiptoe in” December 2007; India Infoline “Leaders Speak” July

2007; Financial Express “Design nuances for dream bath spaces” October 2009; Registrar General, India “Distribution of Households by Availability Bathroom, Type of

Latrine Within The House and Type of Drainage Connectivity For Waste Water Outlet “April 2003

Percentage Households With Bathroom Facility Within The House

70

23

0

50

100

Rural Urban

%

• India is not a 'replacement market', majority of people tend to stick with the bathroom fittings

that they inherit at the time of property purchase

• Bath fittings are replaced once in every 10-15 years

• Currently, the replacement market is estimated to be just 10% of the total market.

• In India, size of most bathrooms in urban areas ranges in between 40 sq-feet to 100 sq-feet

• This restricts sale of products such as shower enclosures, bathtubs, shower curtains

Lack of replacement market and small bathroom sizeISIEmergingMarketsPDF in-sampark01 from 61.95.149.82 on 2011-12-12 23:53:11 EST. DownloadPDF.



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Durables Industry Series.

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Bath Fittings and Accessories Market in India 2009 - Market Size, Drivers and Challenges