Panasonic enters water-purifier business

Panasonic, the Japanese electronics and consumer durables major, is entering the purifier business in India, joining a
host of companies including Hindustan Unilever and Tata Chemicals which have forayed into the largely untapped segment.
By the end of June, Panasonic India will start selling its water purifiers in top cities including New Delhi, Mumbai, Bangalore, Kolkata, Chennai and Hyderabad.

Manish Sharma, director, (sales & marketing), Panasonic India, said the strategy is to grow horizontally by entering different sectors and the water purifier market is apt considering the low penetration levels at present coupled with rising awareness about health.

“The product will be customised for India, taking into consideration the level of hardness and impurities that need to be corrected,” said Sharma.

The company, which is aiming at closing financial year 2011-12 with a turnover of Rs5,500 crore in India, has a presence in multiple categories like healthcare, personal and beauty care, air conditioners, DVDs, audio systems, cameras, kitchen appliances, LEDs, plasma TVs.

Priced between Rs15,900 and Rs30,000, the purifiers would be in the medium to premium range in the over Rs1,600 crore water purifier market.

At the lower end would be the basic purifiers, while the higher-end range would come with RO and UV technologies. RO, or reverse osmosis, and UV, or ultra-violet, are features that play a crucial role in disinfecting water.

Firms like Eureka Forbes, Hindustan Unilever, Tata Chemicals and Kent are key players in this segment, alongside new entrants like LG Electronics.

Water purifiers currently sell at Rs1,200 onwards, with some of the cheapest being sold for as low as Rs749. While at the higher-end, those in the super-premium range cost upwards of Rs40,000 and can even reach Rs47,000.

Industry experts say given the number of firms there will be intense competition in this category and aspects such as installation and servicing will play a major role in determining market shares.

 “How quick and effective servicing for any problems which arise after the product is installed will be a criterion that will decide sales. This is a category where word-of-mouth plays a role in purchase decisions,” said an expert from a consulting firm.
Sharma conceded there will be competition, but said the penetration is small as currently households in non-metros generally use water-filters.

Industry estimates state that annually about 2 million water purifiers are sold across India.

“This is very small considering the scale of the country. Low penetration would lead to rapid growth.”

After consolidating its presence in the metros, the company would gradually look at launching the purifier in Tier II cities like Jaipur, Chandigarh and Indore. On the distribution side, the purifiers would be available in different retail formats like hypermarkets, malls, stores, as well as the 127 Panasonic brand shops.