APN News

Faucets manufacturers focusing on Indias tier 2 & 3 cities

The Indian faucets industry has come a long way since the 1980s. Faucets have evolved from being perceived as a basic functional product to a fashion and style statement. Over the years, growth in the real estate industry, increase in disposable incomes, rise in urbanization, changes in consumers’ preferences and lifestyle, and exposure to international brands have given a boost to the faucets industry. Several domestic and multinational companies have set up manufacturing units in the country and have been upgrading their production capacities and processes.

The faucets industry in India, valued at INR 50 billion (USD 0.83 billion) in FY 2014, has been growing at a CAGR of ~15% over the last three years. The industry is expected to grow at a CAGR of ~16% and reach INR 105 billion (USD 1.74 billion) by FY 2019.

India’s faucet industry is dominated by unorganized players contributing to about 52% of the total market. However, their share is expected to decrease in the coming years, primarily due to increasing brand awareness among consumers and their preferences shifting towards high-end faucets. In the organized sector, Jaquar & Company and Grohe India are market leaders with nearly 70% market share.

Bathroom faucets is the most dominant category, while the kitchen faucets category accounts for merely 20% of the total market. With customers demanding more stylish and elegant bathrooms, the bathroom faucets segment is expected to grow faster than kitchen faucets till FY 2019.

According to Mohita Gupta, a research analyst at ValueNotes, “Growing per capita disposable incomes and changing lifestyles are dictating a clear shift in customers’ buying patterns. They prefer modern fancy faucets compared to the basic traditional ones. This change will drive India’s premium faucets market. Manufacturers are now keen to tap the rising affluent urban population and are introducing premium or higher priced products in the market.”

The faucets market is concentrated in tier I and larger tier II cities due to higher disposable incomes and more brand awareness among consumers. But now, players in the organized sector are increasing their focus on tier II and tier III cities, as well, given the rise in the number of construction projects and the changing buying patterns of customers in smaller cities.

The ValueNotes report, titled Faucets Industry in India: 2014-2019, takes a look at the industry including the current market size and growth, the drivers and challenges for growth, the competitive landscape, an analysis on the industry for investor attractiveness, and Porter’s 5 Forces. Key market trends discussed indicate the opportunities and challenges for industry players.

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