How the India Power Tools Market is Positioned?
Posted on 25 August 2016 by KenResearch Energy and Utilities,
Power Tools is an import driven market in India. The expansion of manufacturing industry, rising number of infrastructure projects in the country, increasing allocation of budget to the construction sector by the government has given the impetus to the power tools industry in India. The power tools market has expanded in past few years owing to the increase in the end user’s such as metal and wood industry’s prosperity and also at the same time the changing lifestyle and adoption of Do-It-Yourself products increasing the demand of power tools.. The Market for Power tools had witnessed a robust growth in past few years. Power tools market had increased from INR ~ Million in FY’2011 to INR ~ Million in FY’2016, growing at a CAGR of ~% during the period. The Make in India initiative by the government has fostered the manufacturing sector which had attracted many companies to open their offices and start operations in India. The massive growth of E-commerce sector had majorly driven the market of power tools. Additionally, increasing cheap imports from China has also catalyzed the growth of power tools market in India.
In India, the massive growth in construction sector, manufacturing sector, and e-commerce sector had majorly driven the market of power tools. The increase in demand for portable products had also surged the demand of cordless power tools in the residential sector of the country. Power tools have succeeded in changing the lifestyles of people especially in Tier 1 cities due to incline in DIY activities. It has also helped in making manufacturing and construction activities easier through portable power tools. Power tools have not only increased the efficiency but also have effectively speeded processes thereby saving time and energy.
The Competitive landscape of vendors is diverse, from international companies, to fast-growing domestic companies. Examples include Bosch, Makita, Hilti, Hitachi Koki, FEIN Power Tools and other organized players.
The power tools market has been segmented on the basis of technology. The four major segments are Electric, Pneumatic, Hydraulic and Powder-Actuated Power tools. In India, majority of the end users have been using electric power tools since it is cheaper and finds application in various sectors. Additionally, most of the electric power tools manufactured by key players are available on online portals. The electric power tools had contributed to INR ~ million In FY’ 2016. The number of companies manufacturing electric power tools is higher than any other kind of power tools. The percentage share of electric power tools had increased from ~% in FY’2011 to ~% in FY’2016.
The power tools market was also segmented based on demand from Tier 1, 2 and 3 cities in India. Tier 1 cities had dominated the power tools market in terms of revenue in FY’2016. The vendor companies generated most of the revenues majorly from these cities owing to excellent distribution networks in these cities.
Which Segments have Driven the Power Tools Market?
Electric Power Tools
Electric power tools were the most popularly used products out of all the types of power tools. The revenue from electric power tools was recorded to be around INR ~ million in FY’2011 which rose to INR ~ million in FY’2016. This rise was owing to the increase in PDI that led to an increase in user’s propensity to spend. Electric breakers generated maximum revenues in the electric power tools segment in FY’2016 since they are expensive as compared to other electric power tools. Organized sector dominated the market of electric power tools in FY’2016. Most of the power tools were sold through dealers rather than direct or online sales. Dealers contributed to INR ~ million in FY’ 2016. The construction industry created ~% of the revenues from electric tools in FY’2016 followed by manufacturing industry and others. ~% of the end users was non-residential in FY’2016 followed by residential end users. The gradual shift in purchasing pattern of electric power tools from physical stores to online portals had fueled the growth of electric power tools in the country.
On the basis of type of product, electric power tools market can be segmented by Drills, Screwdrivers, Routers, Planers, Grinders, Saws and Breakers. Electric breakers contributed maximum to the revenues, around INR ~ million in FY’2016. Portable electric power tools contributed INR ~ Million in FY’2016 as compared to INR ~ Million by stationary counterparts. By application, bulk of the demand was generated by the construction industry followed by the manufacturing industry and metal working industry. Non-residential users generated about % of the revenues as compared to residential users. Dealers contributed for higher revenues than direct sales. Online sales generate the least revenue. The organized sector occupied a greater market share as compared to the unorganized sector in terms of revenue.
Pneumatic Power Tools
Pneumatic power tools were the second largest revenue generator in the power tools segment. Its market accounted for INR ~ Million in FY’2011 which rose to INR ~ Million in FY’2016. A vast majority of the demand for pneumatic power tools was generated from the construction projects all across the country.
Pneumatic hammers contributed the most in the revenue from in FY’2016 since their cost of manufacturing was lesser than the others. Organized sector dominated the market of pneumatic power tools in FY’2016. Most of the power tools were sold through dealers rather than direct or online sales. Dealers contributed to INR ~ million in FY’ 2016.
The construction industry created ~% of the revenues for pneumatic tools in FY’2016 followed by manufacturing industry and others. ~% of the end users was non-residential in FY’2016 followed by residential end users. This was owing to large number of non-residential projects which attracted the utilization of pneumatic power tools in the country.
On the basis of type of products, pneumatic power tools market can be segmented by buffers, nailing and stapling guns, buffers, riveting guns, nailing and stapling guns, sanders, wrenches and others. Stationary pneumatic power tools contributed INR ~ Million in FY’2016 as compared to INR ~ Million by portable ones. By application, the largest revenue was generated by the construction industry followed by the manufacturing industry and metal working industry. Non-residential users generate more revenue than residential users. Dealers contributed for higher revenues than direct sales as majority of the companies focused on their operation which includes manufacturing the products rather than distributing it, which was mostly outsourced to the dealers. The organized sector held a higher market share than the unorganized sector owing to end user’s preference for branded and quality products.
Hydraulic Power Tools
Hydraulic power tools market was about INR ~ million in FY’2011 which inclined to INR ~ million in FY’2016. The increase in imports from China was one of the major reasons behind this increase. Demolition hammer was the most popular tool in this segment which was largely used in the construction projects all across the country.
Since the demolition hammer find applications on concrete, brick wall and masonry all of which form parts of construction activities, the construction industry created ~% of the revenues from pneumatic tools in FY’2016 followed by manufacturing industry and automobile sector. Stationary products were preferred over portable ones owing to higher power and torque generated by them. Organized sector was responsible for generating most of the demand for hydraulic power tools in FY’2016. Most of the power tools were sold through dealers rather than direct sales since most companies opted for indirect channels of distribution. Dealers generated revenues worth INR ~ million in FY’2016. ~% of the end users was non-residential in FY’2016 owing to limited usage of the demolition hammer in residential sector.
Stationary hydraulic power tools contributed for INR ~ million in FY’2016 as compared to INR ~ million by portable ones. By application, the largest revenue was generated by the construction industry followed by the manufacturing industry and automobile industry. The organized sector contributes more than the unorganized sector to the revenue of Hydraulic power tools owing to high commercial usage of the tool.
Powder Actuated Power Tools
Powder-Actuated Power tools generated the least revenues in the power tools segment. The market was worth INR ~ million in FY’2011 which subsequently rose to INR ~ million in FY’2016. Powder-Actuated tools are fasteners used to join hard substances like metals. The only type of tool included in this segment is the nailing and fastening gun largely used in the construction projects all across the country. ~% of the revenue was generated from stationary powder-actuated power tools in FY’2016. This was because powder-actuated processes require high power which is usually not provided by portable devices. Powder-actuated tools relatively generated most revenue from unorganized players among all the four types of power tools. Dealers generated more revenue since they are preferred in cases of bulk sales and commercial end users were responsible for the bulk of the purchases. ~% of the revenues in FY’2016 was generated by construction industry followed by manufacturing industry and metal sector.
Non-residential end users were far more than residential users owing to the hazardous nature of the product. Stationary powder-actuated power tools contributed to INR ~ million in FY’2016. Dealers contributed for higher revenue than direct sales owing to dealers providing a fair comparison among different brands of the same product. The organized sector contributed for maximum revenue as compared to unorganized sector. Powder-actuated tools relatively generated most revenue from unorganized players among all the four types of power tools.
How is the Competition Structured in India POWER TOOLS Market?
India Power Tools market is dominated by few large multinationals. These companies are offering wide variety of products and excellent after sales services to the customers.
Bosch India was a leading player in the industry in FY’2016. The company was a trusted brand name in the country and generated revenues worth INR ~ million in FY’2016 in overall Power Tools market in the country. Stanley Black & Decker was the second largest player in India with the revenue generation of INR ~ million in power tools industry in the country. The company has three brands under Stanly Black & Decker with plans to enhance localization to 50 percent and set up manufacturing plants in India. FEIN had a relatively less market share with a revenue generation of INR~ million since it manufactured only electric power tools.
Most key players imported their products from China, Germany and other countries while Bosch manufactures ~% of its products in India.
What are the Future Prospectes for India power tools market?
India Power Tools Market is expected to increase from INR ~ million in FY’2017 to INR ~ million in FY’2021, growing at a CAGR of ~% during the period. The market is anticipated to be driven by the FDI inflows of international companies to benefit from the Make in India initiative. The rise in number of smart cities such as in the future will also accelerate the demand of power tools in the construction industry.
The increasing construction projects and manufacturing units of companies developing power tools in Tier 2 and 3 cities is due to increase the demand of power tools leading to increase in revenue. Innovations in design ( a shift from corded to cordless power tools), technology and quality will also trigger the demand power tools by various end users especially in the residential sector.
Companies Covered in the Report List of Companies
Major Players Bosch India
Stanley Black&Decker India
FEIN Power Tools
Key Factors Considered in the Report
Comprehensive analysis of the India Power Tools market and its segments
Listed major players and their positioning in the market
Identified major industry developments in last few years and assessed the future growth of the industry
Decision making process by different sectors to select the Power Tools firm.
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Ankur Gupta, Head Marketing & Communications