The BIG Indian Market

Abhay Desai

Mergers, de-mergers and tie-ups in the last one and half years indicate a positive growth and an emerging trend in the cleaning industry. At the same time, the survival of the fittest trend is visible in the race to sustain in the market that is growing. We have had like-minded companies in the industry who have joined hands in order to sustain operations. This is a positive trend. The other positive trend is the entry of international companies and their partnering with Indian companies to run their businesses.

The Indian cleaning industry definitely did see difficult times last year. The growth experienced in 2008 at around 30 or 35% would have dropped to a small two digit figure last year. The coming year too will experience only a marginal increase. Even though India is developing and investing in infrastructure development, the rate of growth will not drastically pick up.

Technologies as such have not had much of an impact on the customer consumption pattern. Green chemicals have come into the market. But, the Indian customer has to understand what going green actually means, how it contributes to the environment & sustainability and improves efficiency & work performance. Moreover, with the increase in excise duty and the customers’ reluctance to pay the increased cost, it is definitely going to affect the already low margins the service providers are working with. This will continue, though only until the time the service provider can absorb the loss, but eventually it will have to be passed on to the customer.

Vinay Ruparel

The more the international companies come into India, the healthier the competition in this field would be. The end user will benefit from proper service. Jade tied up with Technical Concepts 10 years ago when the clean washroom concept was new to India. Lately, we realised that servicing is the trend and we too began offering specialised washroom services with Best Practices Washrooms. India lacks good service providers in this segment and we have become trendsetters. We are also considering offers for tie-ups and mergers.

People come into India with much hope and expect returns from the very first year. The decision making at the user end is much slower and hence, it takes three to five years for a company to settle down, understand the system and do business. In fact, India is a better place to do business unlike other fast growing developing economies. In spite of recession, the Indian cleaning industry did not feel much of the impact and continued growing at the rate of 20-25%. While many other industries had pulled back employee dues, we still gave our staff some benefits, if not a very big amount. Jade has been experiencing a growth of 40% per annum.

Cleaning washrooms in India was never given much importance and we saw potential in this largely untapped segment. Initially, people did not understand the specialised washroom service we offered. It was challenging, when we began maintaining the Churchgate Railway Station in Mumbai on trial for one full year. Around 40 profusely stinking urinals were visited by 100,000 people everyday! We were able to provide solutions and also went into the nitty-gritty of saving water, though the authorities did not comprehend its importance. It was only when they saw results that they began taking us seriously. Airports, multinationals and corporates, all have started taking toilets seriously now.

Feminine hygiene is one segment which is still untapped. The government should bring about norms to make sanitary bins compulsory, especially in schools. I cannot imagine the problems faced by girl students of Grade VIII-X without proper sanitary disposal units. Some of the schools we have approached have expressed budgetary constraints over installing such units. The sanitary bins supplied by us are imported and subjected to import duty, excise and other taxes. At one end while feminine hygiene is a necessity for the society, the government has increased taxes in this budget when they should have been reduced. The government has to realise that this industry should be exempted from such taxes.

Many players in the market – Diversey India, Kimberley Clark, even Clean India Journal – are doing their part to change the mindset of the people. And things are changing.

Puneet Mishra

The cleaning industry can be divided into two categories for companies selling cleaning equipment – housekeeping purchase and application sales. In the first category, the customer is looking for general cleaning purposes and for application sales, the equipment are needed for a particular application. In the first category, the contribution of building service contractors is ever increasing as more and more customers are looking at outsourcing the cleaning activity. Even in the government sector, the importance of building service contractors has increased tremendously and the focus is on economy, payment terms and service delivery. In application sales, the customer generally buys directly and the focus is more on technology and technical expertise. Margins are better in this category. During the past year, the interest of European companies to set shop in India has been growing, as they envisage growth during the coming years and would like to have an important share in the pie. They seem to be having tremendous confidence in the Indian economy and also in the country’s socio-cultural atmosphere.

The year 2009-10 had two clear phases. First half was extremely tough with most companies adopting a very cautious approach and most of the periphery projects / purchases were on hold resulting in almost nil growth. However, post-September, there has been a boost in almost all the segments, especially the manufacturing sector leading to an overall growth of 15-20% for the year. There has been no technology as such introduced during the last year or a marked growth in the new companies which have set shop during the year. However, the most important trend has been an upswing in the sales of machines with higher productivity as well as battery operated machines. Ride-on machine sales have more than tripled for us during the year and we see the trend to continue in the coming years with greater emphasis on mechanisation and technology. This would lead to higher demand on capital investment and over all increase in quality and adherence to laid out hygiene standards as per international norms and laws.

There remains a huge potential to be tapped in the cleaning industry which provides a positive outlook for the future. However, to tap the same, one has to have a distinct competitive advantage, build brand salience and have an infrastructure to cater to a vast market as there is a shift in the growth process from metros to second rung towns and cities. This would require investments and staying power in the market in the face of ever increasing competition and the ability to educate the end user on the correct cleaning solutions. Having the right products and prices for Indian conditions, right partners with long term vision as well as right people to promote these would decide the winners and also the ranks. We, at team Forbes Pro, are excited about the possibilities and have geared ourselves fully to partner our customers in all their cleaning technology solution needs.