Tiles industry in India

Tile industry in India - Present and future scenario

1. Tiles industry A brief overview B y : Vikram D.

2. The Indian ceramic tiles market size is estimated to have been 172 billion INR in 2012 and is expected to reach 301 billion INR by 2016 growing at a CAGR of 15%. Ranked third globally and accounted for over 6% of the total global production in 2012. Organised segment makes up approximately 50% of the sector, and the top eight manufacturers constitute over 75% of the organised market . A large number of small or medium-scale manufacturers operate in the unorganised segment, mainly through plants in Gujarat.

3. Ceramic tiles market segmentation Ceramic tiles market size and growth (INR billion)

4. Trends in the ceramic tiles market in India • Introduction of nanotechnology : Use of nanotechnology helps enhance the shelf life and strength of the tile and can make tiles resistant to dirt and bacteria. These tiles are gaining popularity in areas where hygiene is important, such as hospitals, laboratories, food processing plants, etc. Eco-friendly tiles : Usage of eco-friendly tiles is expected to increase as consumers become more environment-conscious. Recycled eco-friendly tiles are usually made from natural and renewable substances.

5. Designer tiles and introduction of 3-D tiles : Titles are now becoming a style statement and are used for bedroom and living room walls as well. 3D tiles are also being used for outdoor cladding, wall cladding, elevation, etc. • Shift towards vitrified tiles : Vitrified tiles, comprising nearly 50% of the ceramic tiles market have witnessed robust growth in the last five years with increasing demand due to their high durability and easy maintenance.

6. Top brands

7. Types of stores : Kajaria

8. Business Model ​ Dealership = 2-3 L | Distributorship = 5-10 L depends on the brand margin for dealer and Cnf for dist /stockist ​​ Dealer - max. 8% C&F for Stockist - 3 to 5 % ​ Company -> C&F or Distributor -> Dealer MoQ ​ Agreement differs from company to company ​ The pain points ​ If the brand is established, then no problems. New Brand -> depends on the sales team and products ​

9. Average sales achieved Dealer eg : Kajaria - > 10 L | Distributor -> 1 crore Again depends on the brand and company Incentives given by cosmpanies ​ incentives on sales -> foreign trips, gold, electronic items, cash , turnover discount , quantity discount. ​ Credit period from dealer to distributor ​ Dealer - 15 days to 2 months ​ Credit period for distributor from co. ​ Multinational companies - advance payment, generally ​ Discounts offered by dealer to end customers. ​ Example Scheme - 1 free item on buying 10 items  ​

10. Expected return matrix for network partners based on risk (source : Kajaria )

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