Three-way fight in cheap water purifier market

The water purifier market is seeing a three-way fight between the two global giants, Hindustan Unilever and Philips, and the local market leader, Eureka Forbes which has unleashed a new national campaign for its economy water purifier brand.

Both HUL and Eureka are gearing up to woo the large section of the lower-income group which could not afford ultra-violet water purifiers with a starting price of about Rs 5,000 and do not have steady supply of electricity and tap water.

HUL, which began selling its Pureit brand of water purifier nationally earlier this year, is now being challenged by Eureka Forbes with its Aquasure brand launched nationally this month.

Aquasure uses a resin based technology in which the water is treated by a chemical like bromine and then the chemical is removed from the water after it purifies it. This product also does not need electricity.

S K Palekar, senior vice president, marketing and knowledge management at Eureka Forbes said, “We have been operating in India since 1984. From being the only player in the water market, we have seen a significant rise in competition. The market is still highly underpenetrated and has scope for more players.”

Eureka is straddling the retail and also direct selling model to increase its market share and keep HUL at bay. While HUL is selling its water purifier at Rs 1,800, Eureka has priced one of its models at Rs 1,600.

Industry experts say that in India three types of water purifiers are being marketed now — ultra-violet based, reverse osmosis and resin based. The country’s largest water purifier maker Eureka Forbes’ Aquaguard is the market leader with 68 per cent in UV-based market.

In reverse osmosis (RO) as well the company enjoys 60 per cent share and Delhi-based Kent RO systems has 40 per cent share. RO based water purifiers are the most expensive section of the water purifier market and are priced at Rs 13,000 and above.

Philips, on the other hand, which uses UV-based technology to purify water, has dropped its price to Rs 6,995 from the initial launch price of Rs 8,500. Industry sources say its struggle to establish itself in the market with lesser priced water purifiers by competitors has been difficult.

“We got economies of scale and certain cost advantages, hence we decided to pass the benefits to the consumers,’’ said Sharda Prasad, customer marketing manger, water and air Philips Consumer Lifestyle.

“We have got a good response for these products and water will remain a focus area for Philips in India,’’ she said.

Out of the 220 million households in India, only about 8 million use water purifiers. Eureka Forbes has a reach of 6 million households. HUL, in its first three years of operations, has already sold 1 million units.

HUL CEO Nitin Pranjpe said, “Even in these times of slowdown, we will continue to invest in our water business. Our aim is to continue building profitable businesses.”

Both HUL and Eureka had test marketed their products in southern states before launching it nationally. As HUL airs its TV campaigns on how using Pureit will give freedom from boiling water, Eureka Forbes has signed on celebrity Smriti Irani for communicating its benefits.