The ceramic sanitaryware industry in India has seen exponential growth in the last decade on the back of rapid urbanization, real estate development and rising income levels. What began as an unorganized sector is now becoming more organized with large players establishing pan-India presence.
Rise of the organized players
Sanitaryware was earlier dominated by small, localized manufacturers in various parts of the country. However, the market is witnessing the rise of large organized players who are bringing in economies of scale, mechanization, design innovations and pan-India distribution networks. Players like Cera, HSIL, Parryware, Kohler and Jaguar have grown significantly with nationwide manufacturing and retail footprints.
While the market leader Cera has an all India presence with 13 manufacturing plants, HSIL and Parryware have over 5 plants each. Kohler caters to the high-end premium segment with imported designs. Growth Capital PE firms have also invested heavily in sanitaryware startups like Bathroom11 and Quatics to tap the opportunities arising from increasing housing demand. The market share of organized sector has crossed 50% now from just 15-20% a decade ago.
Increasing housing demand and affordability
The Indian housing sector has seen unprecedented growth in the last 5 years, fuelled by rising income levels, rapid urbanization, availability of finance and government schemes like Pradhan Mantri Awas Yojana (PMAY). The real estate industry has been clocking annual growth rates of over 7% leading to construction of millions of units every year both in urban and rural areas.
This has driven huge demand for interior fixtures and fittings. Housing for All by 2022 mission aims to construct over 80 lakh houses which will spur ceramic fixture demand. Higher affordability due to low interest regime and income tax benefits have encouraged many to upgrade their living spaces and opt for superior quality sanitaryware and tiles.
Emergence of large distribution networks
To effectively cater the rising housing needs, manufacturers are increasing production capacities but also strengthening distribution and retail footprints across small towns and cities. Organized retail chains like Bathkit, Kerovit, Bathworld etc have come up as specialized sanitaryware and bathroom retailers.
E-commerce portals like Urbanladder, Pepperfry etc offer varied designer choices online and also provide installation services. Tile brands are tying up with hardware stores in rural areas. India Ceramic Sanitaryware Industry distributors have widespread reach through multi-brand showrooms situated in every city. Development of specialized retail outlets is key to connect manufacturers directly with customers and tap B&C class towns.
Premiumization: Design and Material Innovation
Beyond the basic needs, lifestyle changes have created a growing demand for aesthetic bathroom spaces, high-end fittings and designer products. Manufacturers are launching premium SKUs inspired from overseas trends like rain shower systems, hand spray fittings, anti-bacterial materials and self-cleaning innovations.
Italy's Duravit, Germany's Grohe and US's Kohler are catering to luxury homeowners seeking exquisite fittings and spas. Indian firms are also taking cues by introducing vitreous china, saniceramic fittings, modular closets, motion sensor faucets etc. Companies are collaborating with international designers to have intricate designs of walls, floors and vanity units made of premium materials like glass, marble.
Sustained growth through structural shifts
Given the young demographics, rapid urbanization and rising living standards, demand for sophisticated housing and lifestyle products is bound to escalate in the coming decade. Major structural reforms like GST implementation, ease of doing business initiatives and affordable credit availability have made the sector more organized and transparent.
Automation, digitization and use of AI/robotics will help India expand exports from the current level of about 10% of total production. Focus on water conservation and hygiene necessitates adoption of advanced water-saving fittings and fixtures. Government's `Housing for All by 2022' mission has made sincere efforts to address the huge housing shortage which bodes extremely well for the sanitaryware sector. With changing preferences, higher spends on home improvement and organized distribution networks, ceramics industry seems poised to sustain steady double-digit growth rates annually over a long term.
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