The fact that almost 90% of urban India and 99% of rural India do not use any sort of purifier presents a huge market opportunity for players in the water purifier segment. While a section of the urban consumers has taken to premium water purifiers in a big way, the advent of cheaper products has significantly changed the market dynamics. Sabaleel Nandy, head - water purifier business, Tata Chemicals, tells Shailaja Sharma and Nupur Anand about the products in the pipeline and how the company squares up to meet future requirements of the market.
What are your observations of the water purifier market since the Swach launch two years ago?
The barrier to mass adoption was pricing until 2005-06 when Hindustan Unilever (HUL) came out with Pureit. And more number of people felt it was accessible. It also did a huge awareness generation campaign. We were fortunate to have someone like Unilever before us because it made our job easier. When we came in at a price of Rs750, which was bang on the price of a candle filter, nobody doubted us. There were fears that we would be pushed in the filter space and competition would make us appear as an inferior product. When we launched our product in 2010, we broke the price barrier from Rs2,000 to Rs750.
The non-electric segment is also facing stiff competition…
We will increase ad spends to make sure the product awareness barriers are broken and people know about pitfalls of using unpurified water and about the brand Tata Swach.
Unlike in other categories, in this space, we (companies) should look at each other as allies and not competitors. Because it has a strong social motive, it places a lot of responsibility on players.
What about launching more products at lower price points or the premium end?
We are still at the top of the bottom of the pyramid. There are a lot of start-ups and we keep getting collaboration interests. Our own scientists are working. This category will be one of the very closely watched categories and consumers will benefit the most as a result.
Does it take longer to break even per unit in this business?
There are not huge margins to be made, it is completely a volumes game. The industry plants a seed through the sale of a purifier and then repeat sales come through sale of bulbs over the years. One has to be patient enough for the seed to grow into a plant.