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Bath Fittings and Accessories Market India (Part I)

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November 2009

Executive Summary

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Market

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

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Drivers:

Challenges:
Market restricted to urban areas Low replacement demand and small bathroom sizes

Drivers & Challenges

Increasing urbanization Increase in disposable income Growth in real estate sector Growth in hospitality industry Increasing awareness level among consumers

Trends

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

Competition

BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Market Overview Drivers & Challenges Trends Competition Key Developments

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Market is dominated by the organized sector

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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 BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Market Overview
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

Market Size and Growth

INR bn
40 30 20 10 0 40

+22%

18

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

2008

2012e

Organized Vs Unorganized Split

Unorganized 45% 55% Organized

Key Segments

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Key Segments

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Accessories Robe Hooks Toilet Roll Holder Towel Rods Towel Rings Soap dishes Wall trays Grab bars Mirrors Bathroom Furniture

Bath Fittings

Faucets and Basin Fittings

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

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
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Market Overview Drivers & Challenges Trends Competition Key Developments

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Drivers & Challenges - Summary

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Drivers
Increasing urbanization Increase in disposable income Growth in real estate sector Growth in hospitality industry Increasing awareness among consumers

Challenges
Market restricted to urban areas Low replacement demand and small bathroom sizes

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Increasing urbanization has led to a growing market of bathroom fittings and accessories
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Source: Assocham Study, Urbanisation in India June 2006 ; Urbanization in India and its impact on environment 2005 ; Overview of Urbanization in India BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Increasing urbanization

Impact

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

Trends of Urbanization
As % of total population

Number Of Cities With Million Plus Population

40

Urban Population (mn)

600 500 400 300 200 100 0 62 217 285

550

50 40 30 20 10 0

40 30 20 10 1 0

23

1951

1991

2001

2021e

1901

1951

1991

2001

Increase in disposable income has empowered Indians to spend more on products like bath fittings & accessories
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Source: McKinsey Global Institute Rise of Indias consumer market BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Increase in disposable income

Impact

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
Total No. of Household (mn) Per household annual income (INR 000) Core target consumer groups Globals >1000 Strivers 500-1000 Seekers 200-500 Aspirers 90-200 Deprived <90 Aggregate Annual Disposable Income (INR tn)

281 207 5% 1% 1% 44% 43% 33% 49% 30% 2015 244 2% 1% 23% 3% 12% 34%

90 24% 23% 44 15% 9% 7% 34% 33% 9% 2015 9%

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34% 15% 3% 2025

18% 2025

13% 49% 23% 2005

2005

Real estate sector is a key target segment for bathroom fittings and accessories industry
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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 BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Growth in real estate sector

Impact

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 Real Estate Growth
INR bn
2,000 1,000 0 656

Demand for Office Space

mn sq-feet
20 10 0 4

+30%

1,874

+10%

16

2008

2012

1988

2004

10

Growth in hospitality sector and increasing awareness is driving the bath fittings and accessories market
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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 BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Growth in hospitality industry

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

Impact

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 Demand Supply Gap
Rooms
400,000 200,000 0 110,000 260,000

150,000

Increasing awareness among consumers

Supply

Demand

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
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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 BATH FITTINGS AND ACCESSORIES MARKET INDIA.PPT

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Market Restricted to Urban Areas

Impact

Majority of houses in rural India lack basic amenities such as presence of bathrooms, this has restricted the market to urban areas Percentage Households With Bathroom Facility Within The House
%
100 50 0 23 70

Rural

Urban

Lack of replacement market and small bathroom size

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

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Thank you for the attention

The Bath Fittings and Accessories- India report is a part of Research on Indias Consumer Durables Industry Series. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA Gagan Uppal
Phone: E-Mail: +65 8448 0449 natasha.mehta@netscribes.com Phone: E-Mail: +91 98364 71499 gagan.uppal@netscribes.com
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