1. Indian Crockery and Home Needs Consumer Market. Perspective 2008 Amit Verma 2.

Indian consumers are one of the most diverse in the world and these seemingly seamless market is full of niches that in itself sustain entire local industries, and this is nowhere more strikingly visible than the Home Needs segment comprising Utensils, Cutlery, Plastics, Crockery and Home Decor estimated to be around 9000 Crores roughly USD 18 Billion $. 3. Even before the rapid socio-economic changes that took place over the last decade in India, the vast cultural diversity and the multitude of eating habits and varied lifestyles that have been a reflection of the socio-economic background of the consumers had ensured that the quot;Home Needsquot; segment is one of the most vibrant market segments in India. The country has now witnessed the creation of many new markets and a further expansion of the existing ones. There are more than 300 million people moving up from the category of rural poor to rural lower middle class between 2005 and 2025 and growth is being fueled by increased rural and small/medium town consumption. These developments are expected to create major opportunities for companies, this market is one of the toughest to crack where niche and regional marketing is the mantra to succeed. 4. Plastics and Utensils market is fairly stable with price competitiveness being the only strong differentiators, the markets are also fairly mature with very flat quot;growthquot; curves. Brand differentiation is relevant for segments like pressure cookers , cooking tools but with fairly stable conversion factors there is always pressure on margins to remain price competitive, segments like loose cutlery & utensils are still dominated by regional small scale industries. Growth is now coming from segments like Crockery, market size around USD 2 Billion $ and growing. This has been one of the fastest growing segments over the last decade and has created more value for new brand that have now come to be major players in this segment. Also this is one of the most interesting and difficult markets to succeed, entry barriers are fairly low but so is the success ratio!! It takes in depth understanding of this segment to penetrate this market which is still largely under tapped and has latent demand which are being now harnessed. 5. Almost 50% of the market is comprised of organized players, with brands like YERA, OCEAN, LUMINARC, LA OPALA, JCPL, BHARAT, CORELLE, TREO and others. Most of these brands are highly under performing as they have been plagued by management issues and inadequate marketing and investments in distribution and manufacturing. Whereas some of the MNC brands are represented in India by their trade partners a few like ARC International have also dedicated staff in India to focus on this emerging market, many of the other brands are dependent on imports wherein they are consolidators who have managed to build equity in the absence of strong marketing from older players. Glassware as a segment has been growing at a vary fast pace in many categories driven not only by availability of new

products primarily due to imports but also due to the change in lifestyle and gifting patterns during marriage and festival seasons. 6. TYPE SOURCE Rs. Cr. Million USD ORGANISED DOMESTIC 224 45 IMPORTED 324 65 ORGANISED Total 548 110 UN ORGANISED DOMESTIC 287 57 IMPORTED 251 50 UN ORGANISED Total 538 108 Grand Total [Indian Crockery Market Size. Estimated ] 1086 217 7. Glassware as a segment has been growing at a vary fast pace in many categories driven not only by availability of new products primarily due to imports but also due to the change in lifestyle and gifting patterns during marriage and festival seasons. For ease of segmentation we can broadly break the Crockery market under the following 8. These can be further split into the following sub segments having the following share of market: 9. Major share of Ceramics segment in the market is still dominated by BoneChina ware. This is also a highly fragmented market wherein the traders and distributors largely control the market dynamics. Also prices are determined by the various design types and sales are having large seasonal fluctuations. Porcelain wares are mainly imported and though volumes are lower they comprise higher value skus, mainly articles that can be more part of the Home Decor segment but bordering on a gray zone wherein form and function both go together. For Stoneware it is mainly the Mugs which contribute high volume, wherein almost 26% of the value is contributed by imports, volume contribution is much higher. Mainly from China in the form of loose mugs which has scope of huge volume upward of 20million pcs PA and growing. Primarily driven by the gifting segment and organized retail chains. 10. Market for glassware is roughly USD 1.4 Billion in India. Organized segment comprising of established brands is around USD 80 Million. Around USD 60 Million is comprised of the other Unorganized segment comprising mainly of importers and non-branded players. 11. SEGMENT Rs. Cr. Million USD Share BONE CHINA 130 26 12% GLASSWARE 560 112 52% MELAMINE 135 27 13% OPALWARE 175 35 16% PORCELAIN 35 7 3% STONE WARE 45 9 4% Grand Total 1080 217 12. Melamine Tableware is also growing at a fast rate but is one of the most unorganized segment of all the others, In the absence of strong benchmark on material usage and safety, almost 80% ~ 90% of Melamine tableware volume is composed of mixed Melamine and Urea composition products. Apart from leading players like SNB , Diplomat, Servelle and Imported Brands like Superware etc. that contribute around 44% of this market most of the production is of low value non branded products. The industry is still constrained by the absence of Brands that

can assume leadership role and grow the category at a faster pace also the fact that most of the production is done without any quality check and unscrupulous means doesn't help it either. The last quarter of 2008 has been particularly slow for the industry with major players in both organized and unorganized segment seeing degrowth up to 40% over last year. But this is a short term hiccup. The intrinsic fundamentals of this fast growing segment are estimated to give around 15% to 20% YOY growth for the next decade. Though select players especially new entrants who come in with the right strategy to tap such a highly fragmented market can look at more than 30% growth for at least 3 to 4 years over existing base. 13. The key point is also that though the market is not nascent it has huge untapped potential. Growth is more in the organized retail segment though on a much smaller base but its share of the market is around 9.5% and growing. For more details and exchange of ideas please write to : Amit Verma , email: amitverma.in@gmail.com Disclaimer: These are the views of the author based on analysis of the industry and feedback from various key industry players.