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A sweeping growth predicted for SMEs in the cleaning and sanitation sector

Cleaning and sanitation sector in India is gaining significant push from Swachh Bharat Mission, registering an annual growth of 40 per cent. Restructuring, efficient logistics and advanced manufacturing facilities are shaping this business segment into a well organised SME sector. Ashwin Suresh, MD and Niyati Purohit, CEO of Megamorph Marketing Private Limited, the parent organisation of sanitation chemicals and accessories brand CareClean, speak about new developments and future prospects of SMEs in this niche sector.

 

Can you give us a broad idea about the market size, investment involved and consumer behaviour when it comes to hygiene/ sanitation product sector in India?

Ashwin Suresh

The cleaning industry in India is growing at 40 per cent year on year, with almost an equal share between the organised and unorganised sectors. In India, cleaning chemicals market stood at $2,388 million in 2016, and is projected to grow at a CAGR of 15 per cent to reach $9,655 million by the end of 2026, thanks to increasing incidences of various infections, rapid urbanisation, coupled with growing number of new commercial setups and increasingly stringent safety standards.

Being a large country with an equally large population, India presents endless varieties of physical features and cultural patterns. The region is as diverse as it is vast. Its markets come in a bewildering assortment of sizes and development stages, and its customers hail from a multitude of ethnic and cultural backgrounds. Their tastes and preferences evolve constantly. The speed and scale of change in Asian consumer markets can surprise even experienced executives.

 

Niyati Purohit

To achieve the national mission of Swachh Bharat, the cleaning industry plays a pivotal role. MNCs face the challenge of many different regions within the subcontinent. The big differences include the gap between the haves and have-nots, languages, literacy, and geography, making it difficult for a global brand to satisfy all of the country’s consumers. With the positive outlook of our manufacturing, defense, hospitality, tourism & IT industries, there is an ever-growing demand and challenge for maintaining the required level of cleanliness and hygiene.

Indian consumers demand sophisticated products and services found in the west, but at lower prices. From the rate for a simple telephone call to finding the right solution for your cleaning needs, the Indian customer is keen on getting superior quality at a good value. There is phenomenal opportunity for many entrepreneurs and their SMEs to cater to these markets and provide employment to many skilled and unskilled workers, while contributing to the growing GDP.

What must SMEs do to adapt to the market demands?

Purohit

Responsible and green sourcing means looking at parameters beyond just price. We, for instance, focus on the carbon footprint of our sourcing. Local sourcing, transport pooling, recycling of packaging material are some of the crucial steps that were incorporated by Megamorph to reduce our carbon footprint. One should also ensure that no known toxins, carcinogens and hazardous materials are used in the production of the product.

Suresh

Quality should be a way of life in all walks of business. Quality is an attitude not just science. Every individual component that becomes a part of your finished product must be inspected, tested and certified for usage and consistency. It is only then that your front-end team of sales and service representatives can market high quality products to their clients with great confidence. Customer confidence and loyalty are always built on reliability and quality of products and services.

Automating of manufacturing unit, efficient logistics, inventory management and other such techniques will assist a business in generating more efficiency in cost leading to better margins and higher value for the end customer.

 

How easy or difficult is it for SMEs to start their business in the hygiene/sanitation sector?

Purohit

The flexibility in the laws has made it easier to start a successful cleaning company in India. Businessescan be started with relatively low capital investment and the high demand for the cleaning services andproducts has given a new life to the cleaning industry in India.

Suresh

Over the past 20 years, multinational companies have made considerable inroads into the Indian market. But many have failed to realise their potential: some have succeeded only in niches and not achieved large-scale market leadership, while others have not maximised economies of scale or tapped into the country’s breadth of talent. Most companies failed to learn to do business the Indian way.Rather, they simply imposed global business models and practices on the local market. The parent company paid marginal attention to local operations and was unwilling to adapt to changing market conditions.

It is this gap that an Indian SME can capture by structuring their businesses in an organised, efficientand sustainable manner. Blending the required structure with our inherent deep understanding of Indian culture can build companies, brands and products that are reputed globally



Why is it important to tap the rural market?

Purohit

A large population also posses many challenges, like cleanliness, hygiene and overall sanitation. Many in India have scoffed at the vision of a truly “Swachh Bharat”, identifying the population as the largest barrier. But over the past few years, we have seen citizens of many towns and cities take personal accountability for their surroundings. Cities like Indore, Visakhapatnam, and Mysore among many others have taken the lead in demonstrating effective public private partnership to make a difference. Today the opportunity is clearer than ever. As per a report, India’s sanitation coverage in 2012 was merely 38 per cent which has currently increased to 60.53 per cent under the Swachh Bharat Mission. Since 2014 more than 1, 80,000 villages, 130 districts and three states – Sikkim, Himachal Pradesh and Kerala have been declared open defecation free.

Suresh

The aspirations of rural India are higher than those of urban markets. Rural markets look at cleanliness as a higher priority and understand the need for it. Access to clean water, toilets and hygienic livings conditions has increased over the past few years. The prospect of providing solutions for maintaining the facilities provided in a hygienic manner is wide spread and is the need of the hour. We have seen many public toilets being badly maintained and unusable. As an industry we must ensure that this does not happen. The opportunity for SMEs to cater to this market is greater than the larger players, since the larger players focus their efforts on the more populous areas.

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