Vacuum Cleaners in India
Headlines
·
Sales of vacuum cleaners grow
by a healthy 17% and 11% in volume and current value terms respectively in
2007, albeit from a small base
·
Companies continue to cut
prices to gain penetration, with the popular selling cylinder vacuum cleaner
seeing a 5% price drop in 2007
·
Cylinder vacuum cleaners
represents the bulk of sales, handheld vacuum cleaners is a promising category
·
Eureka Forbes dominates, with
69% of volume sales in 2007
·
Product acceptance is slow
since domestic help is considered a better option, but mindset is changing
rapidly and the product’s superior cleaning benefits are better perceived now
·
Volume sales of vacuum cleaners
are predicted to grow at a CAGR of 13% over the forecast period
Trends
·
Vacuum cleaners were still
considered non-essential in 2007 as hand cleaning by domestic maids was still
preferred and thought to be more cost-effective.
·
But with growing incomes,
carpet and upholstery sales are on the rise. India is a hot country and
carpets, sofas with permanent fitted upholstery, heavy curtains etc., are not
typical. But they are increasingly being seen as signs of growing incomes and
as such, the need for vacuum cleaners is on the rise.
·
Growing private car ownership
and the need to keep cars clean, as well as home computers, expensive TVs and
other electronic gadgets are also driving up sales of compact vacuum cleaners.
Often car dealers or manufactures offer these as free gifts with a car
purchase.
·
Growing awareness among
consumers that vacuum cleaners offer “deeper cleaning” compared with
traditional “mop and sweep” has boosted the demand for vacuum cleaners. A
direct sales approach by leading companies like Eureka Forbes and product
demonstrations have helped convince consumers of the superiority of vacuum
cleaners.
·
Upper-income nuclear families
with working women seek greater time flexibility in home management rather than
relying on domestic help. As such, women now need to take care of cleaning
chores themselves, and see vacuum cleaners as a modern method rather than the
old-fashioned “mop and sweep” method.
·
In the big cities the demand
for compact vacuum cleaners is greater because of storage limitations.
Moreover, its affordability makes the compact model more attractive.
·
Unit prices have been declining
in a bid to gain penetration and make it a mass affordable product. In 2007
prices started from a low of around Rs2,500 and the predominant price band was
Rs3,000-8,000.
·
Cylinder vacuum cleaners are
more popular and virtually account for all sales.
·
Big Bazaar’s Koryo private
label and Hyper City’s Technix brand sell in good numbers. They are cheap and
are promoted aggressively in company-owned stores. They are also popular as
bulk gift purchases, often as incentive gifts for employees.
·
Although direct selling was
still the leading distribution channel in 2007, players like LG are using
specialist multiples, independent kitchen stores, hypermarkets and other such
channels to deepen distribution and increase product visibility and
availability. Eureka Forbes too has entered mass retail channel in recent
years, rather than being only in direct sales.
Competitive Landscape
·
Eureka Forbes dominates vacuum
cleaners and accounted for 69% of volume sales in 2007. Its name is synonymous
with vacuum cleaners and often used when referring to a vacuum cleaner. The
company’s pioneering market development, unique direct marketing approach and
absence of competition helped it enjoy a huge monopoly for several years. Its
key competitive strength is its 6,000-strong direct salesforce reaching six
million homes in 100 cities and over 450 smaller towns, a 4,000-strong
maintenance crew and its 3,800-strong dealer network.
·
However, in the past 2-3 years
strong players have started focusing on vacuum cleaners. LG has emerged as a
significant rival with an estimated volume share of 9% in 2007. It is
exploiting the consumer trend for convenient modern appliances for home chores
and offering vacuum cleaners as a modern and superior cleaning technology.
·
Most companies offer a wide
range of products but given its nascent status and perception that a vacuum
cleaner is still a non-essential purchase, the most popular models in 2007 were
in the economy range of Rs3,000-8,000.
Prospects
·
The penetration level of vacuum
cleaners was still very low (less than 1% of households) in 2007, but there is
a growing awareness of the product’s benefits and hence the market is expected
to see strong growth (from a small base) over the forecast period.
·
As companies reach out, the big
cities and small towns are expected to see strong growth, but growth in the
large cities is expected to be higher (despite less dusty environments) due to
the greater number of more educated and aware consumers and greater
affordability.
·
Small/compact, handheld and
cylinder vacuum cleaners will drive a volume CAGR of 13% over the forecast
period.
·
While cylinder vacuum cleaners
will continue to dominate, more advanced feature-laden ones with wet cleaning,
fittings for cleaning difficult corners, spray cleaning attachments, steam
cleaning etc are expected to also see
high demand.
·
Eureka Forbes’s lion’s share is
expected to be eroded due to stiff competition from strong competitors like LG
and others which are starting to look at the category like Samsung, Electrolux,
Videocon and even smaller players like Maharaja and Inalsa.
Sector Data
'000 units
2002 2003 2004 2005 2006 2007
Vacuum cleaners 130.5 140.8 152.8 166.6 193.8 226.1
- Upright vacuum
cleaners - - - - - -
- Cylinder vacuum 122.7 132.3 143.5 156.4 182.5 213.3
cleaners
- Wet and dry
vacuum - - - - - -
cleaners
- Handheld vacuum - - - - - -
cleaners
- Other vacuum
cleaners 7.8 8.5 9.3 10.2 11.3 12.8
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
Rs million
2002 2003 2004 2005 2006 2007
Vacuum cleaners 600.0 660.0 756.9 835.7 919.7 1,023.2
- Upright vacuum
cleaners - - - - - -
- Cylinder vacuum 580.2 633.1 726.0 798.6 875.3 972.0
cleaners
- Wet and dry
vacuum - - - - - -
cleaners
- Handheld vacuum - - - - - -
cleaners
- Other vacuum
cleaners 19.8 26.9 30.9 37.1 44.4 51.2
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% volume growth
2006/07 2002-07 CAGR 2002/07 TOTAL
Vacuum cleaners 16.7 11.6 73.3
- Upright vacuum
cleaners - - -
- Cylinder vacuum
cleaners 16.9 11.7 73.9
- Wet and dry
vacuum cleaners - - -
- Handheld vacuum
cleaners - - -
- Other vacuum
cleaners 13.0 10.3 63.6
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% current value
growth
2006/07 2002-07 CAGR 2002/07 TOTAL
Vacuum cleaners 11.3 11.3 70.5
- Upright vacuum
cleaners - - -
- Cylinder vacuum
cleaners 11.1 10.9 67.5
- Wet and dry
vacuum cleaners - - -
- Handheld vacuum
cleaners - - -
- Other vacuum
cleaners 15.3 21.0 159.2
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% retail volume
2003 2004 2005 2006 2007
Bagless - - 2.0 3.9 4.0
Bag 100.0 100.0 98.0 96.1 96.0
Total 100.0 100.0 100.0 100.0 100.0
Source: Official statistics, trade associations,
trade press, company research, store checks, trade interviews, Euromonitor
International estimates
% retail volume
2003 2004 2005 2006 2007
Rechargeable - - 0.9 1.9 2.9
Mains 100.0 100.0 99.1 98.1 97.1
Total 100.0 100.0 100.0 100.0 100.0
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% retail volume
Company 2003 2004 2005 2006 2007
Eureka Forbes Ltd 84.0 83.0 83.5 70.0 69.0
LG Electronics
India Ltd 5.0 6.0 6.5 7.0 8.5
BPL Sanyo
Utilities & 2.0 4.0 4.5 5.0 5.5
Appliances Ltd
Philips India Ltd 2.2 1.7 1.5 2.6 2.6
Modi Hoover - - - - -
Others 6.8 5.3 4.0 15.4 14.4
Total 100.0 100.0 100.0 100.0 100.0
Source: Trade associations, trade press,
company research, trade interviews, Euromonitor International estimates
% retail volume
Brand Company 2004 2005 2006 2007
Eureka Forbes Eureka Forbes Ltd 83.0 83.5 70.0 69.0
LG LG
Electronics India Ltd 6.0 6.5 7.0 8.5
BPL BPL
Sanyo Utilities & 4.0 4.5 5.0 5.5
Appliances
Ltd
Philips Philips
India Ltd 1.7 1.5 2.6 2.6
Hoover Modi
Hoover - - - -
Others 5.3 4.0 15.4 14.4
Total 100.0 100.0 100.0 100.0
Source: Trade associations, trade press,
company research, trade interviews, Euromonitor International estimates
'000 units
2007 2008 2009 2010 2011 2012
Vacuum cleaners 226.1 260.0 296.7 335.4 375.7 409.3
- Upright vacuum
cleaners - - - - - -
- Cylinder vacuum 213.3 245.3 279.7 316.0 353.9 385.8
cleaners
- Wet and dry
vacuum - - - - - -
cleaners
- Handheld vacuum - - - - - -
cleaners
- Other vacuum
cleaners 12.8 14.7 17.0 19.4 21.7 23.5
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
Rs million
2007 2008 2009 2010 2011 2012
Vacuum cleaners 1,023.2 1,132.7 1,255.1 1,383.9 1,519.0 1,630.1
- Upright vacuum
cleaners - - - - - -
- Cylinder vacuum 972.0 1,073.1 1,186.7 1,307.4 1,435.0 1,540.7
cleaners
- Wet and dry
vacuum - - - - - -
cleaners
- Handheld vacuum - - - - - -
cleaners
- Other vacuum
cleaners 51.2 59.6 68.4 76.5 84.0 89.4
Source: Official statistics, trade associations,
trade press, company research, store checks, trade interviews, Euromonitor
International estimates
% volume growth
2007-12
CAGR 2007/12
TOTAL
Vacuum cleaners 12.6 81.0
- Upright vacuum
cleaners - -
- Cylinder vacuum
cleaners 12.6 80.9
- Wet and dry
vacuum cleaners - -
- Handheld vacuum
cleaners - -
- Other vacuum
cleaners 13.0 84.0
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
% constant value
growth
2007-12
CAGR 2007/12
TOTAL
Vacuum cleaners 9.8 59.3
- Upright vacuum
cleaners - -
- Cylinder vacuum
cleaners 9.6 58.5
- Wet and dry
vacuum cleaners - -
- Handheld vacuum
cleaners - -
- Other vacuum
cleaners 11.8 74.5
Source: Official statistics, trade
associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
