Residential Water Treatment Markets in Select Countries “As the economic downturn sets in at home, it may be time to take advantage of the residential water treatment markets growing abroad.” Shilpa Tiku, Consultant Environmental & Building Technologies October 8, 2009
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Residential Water Treatment Markets in Select Countries
“As the economic downturn sets in at home, it may be time to take advantage of the residential water treatment markets growing abroad.” This presentation focuses on the U.S., China, India, Brazil, and Mexico. Covered in the presentation are the market scope, drivers and market restraints, as well as market leaders, market movement and revenue forecasts.
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Residential Water Treatment Markets in Select Countries
“As the economic downturn sets in at home, it may be
time to take advantage of the residential water treatment markets growing abroad.”
Shilpa Tiku, Consultant
Environmental & Building Technologies
October 8, 2009
2
Residential Water Treatment Market: Focus Points
Countries include the following:
The briefing covers the following:
• Market Scope
• Market Drivers
• Market Restraints
• Market Movement and Revenue Forecasts
• Market Leaders
U.S. China India Brazil Mexico
3
Residential Water Treatment Market: Economic Downturn
• The residential water treatment market is strongly related to the housing market and macroeconomic situations.
• As a result, the current housing market downturn continues to pose a negative impact on the growth of the residential water treatment industry.
4
Residential Water Treatment Market: Growth Rate
Country CAGR (%) (2008-2015)
China 27.6
India 21.2
Mexico 12.2
Brazil 10.4
United States 5.8
√
√√
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Residential Water Treatment Market: Market Segmentation
• For the purposes of this research, residential water treatment systems are defined as follows:
• Point-of-Use (POU) : Under the sink (UTS) systems, counter top (CT) systems, and faucet mount (FM) systems
• Point-of-Entry (POE) : Water softeners, carbon, and Ultraviolet (UV) systems
• Water Pitchers
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Hot Topics(from the current year and beyond)
• Voice of the Customer: Perceptions and Behavior Toward Bottled Water Market
• Global Water Recycling Water Equipment Markets
• Opportunities in Latin American Industrial Water Market
• Brazilian Industrial Water and Wastewater Treatment Market
• Strategic Profiles of Leading and Emerging Companies in the North American Water Industry
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Residential Water Treatment Market: U.S. Market Drivers , 2009-2015
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Increased customers' access and exposure to RWT
products through the Big-Box retail channel propelling
overall market growth
Very High Very
High
High
2 Media coverage of drinking water contamination related
outbreak leads to health concerns that drive
instantaneous adoption of RWTS
Very High High High
3 Rising consumers' expectation on drinking water quality High High High
4 Aging infrastructure creating growing concerns for
drinking water safety from all sources including
municipal systems
Med/High Med/High Med/High
5 Ease of use resulting in growing adoption rate Low/Med Low/Med Medium
6 Marketing and advertising increases product
consumption and revenue growth
Low/Med Low/Med Low/Med
7 Pitcher products continue to address the key concern for
taste and odor
Low/Med Low/Med Low/Med
Source: Frost & Sullivan
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Residential Water Treatment Market: U.S. Market Restraints, 2009-2015
Source: Frost & Sullivan
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Lack of marketing and advertising budgets from
industry participants limiting product visibility
Medium Medium Medium
2 Water quality remains a non-issue for many
consumers despite a rising level of overall
awareness
Low/Med Low/Med Low/Med
3 RWTS not considered as essential appliances Medium Low/Med Low/Med
4 Lack of product differentiation hampering market
growth
Medium Medium Medium
5 Housing Markets downturn impeding the growth of
related consumer product segments such as
household appliances
Med/High Med/High Medium
6 Lack of portability and convenience of POU units
that require permanent installations
Med/High Med/High Medium
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Residential Water Treatment Market: Market Drivers and Restraints Ranked in Order of Impact (India), 2009-2015
Source: Frost & Sullivan
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Scarcity of clean water High High High
2 Growing awareness about health High High High
3 High disposable incomes High Medium Medium
4 Increasing availability of alternatives to boiled water High Medium Medium
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Lack of after-sales service High High Medium
2 Low awareness levels among low income groups High Medium Medium
3 Choice of sales channel High Medium Medium
4 Price sensitivity Medium Medium Medium
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Residential Water Treatment Market: Market Drivers and Restraints Ranked in Order of Impact (China), 2009-2015
Source: Frost & Sullivan
Rank
Restraint
1-2 Years
3-4 Years
5-7 Years
1 No criteria regarding after-sales services High Medium Medium/
Low
2 Lack of strong branding and supervision for product
quality High Medium Low
Rank
Driver
1-2
Years
3-4
Years
5-7
Years
1 Increase in water contaminations and shortage of safe drinking water supply
High High Medium
2 Steady increase of income and purchasing power of most urban residents
Medium Medium High
3 Chinese residents’ increasing awareness of self protection and health
Medium Medium Medium
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Residential Water Treatment Market: Market Drivers and Restraints Ranked in Order of Impact (Brazil), 2009-2015
Source: Frost & Sullivan
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Aggressive marketing done by RWT suppliers High High High
2 Increasing consumer awareness regarding the poor
quality of water
High High High
3 Consumers interest in adopting new water treatment
systems versus the conventional clay filters
Medium Medium Medium
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Low awareness levels among low-income groups High High High
2 Boiling and partial filtration being perceived as
sufficient water treatment
High Medium Medium
3 Market potential for high-end products being reduced
by price sensitivity
High Medium Medium
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Residential Water Treatment Market: Market Drivers and Restraints Ranked in Order of Impact (Mexico), 2009-2015
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Increasing consumer awareness about poor quality of
drinking water
High High High
2 Increasing trend include POE systems in new housing High High High
3 New construction activities drive sales High High High
4 Increasing media coverage about the poor quality of
some brands of bottled water
High Medium Medium
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Lack of education about water issues among the low-
and middle-income population
High High High
2 Boiling and partial filtration is perceived as sufficient
water treatment
High High High
3 High price of residential water treatment systems High Medium Medium
4 Lack of clarity among buyers about the technology
and functioning of residential water treatment
systems
Medium Medium Medium
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Residential Water Treatment Market: Total Market Size
• The total residential market in the select 5 countries is valued at $3.2 billion in 2008.
2,509.82,828.6
3,215.5
3,685.7
4,272.7
4,985.7
5,858.1
6,921.5
8,227.0
9,900.5
1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
21.0%
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
7000.0
8000.0
9000.0
10000.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Growth Perce
ntage (%
)Revenues ($ Million)
Revenues($Million) Revenue Growth Rate (%)
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Residential Water Treatment Market: Major Industry Participants
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Conclusion
• POU is the most significant product segment to consider in almost all countries researched.
• India has a large market for CT systems. India could be an attractive market with revenue potential of $1.92 billion by 2015.
• In 2015, China will likely be the largest residential water treatment market.
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Next Steps
� Register for the next Chairman’s Series on Growth:
The Growth Excellence Model: Competitive Benchmarking & Growth