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Increased importance of health and wellness supports strong growth in the market
Increased importance of health and wellness highlight water safety issues and support strong growth in the global residential and light commercial water treatment equipment (WTE) market. Strict enforcement of water quality standards and regulations supporting upcoming innovative water treatment procedures also drives the market. Currently, North America holds the largest market share. While Europe presents the most environmentally conscious and minimally cost-conscious market for WTE solutions, Asia-Pacific offers higher scope due to escalating demand from the region’s burgeoning population and public health concerns.
New analysis from Frost & Sullivan, “Global Residential and Light Commercial Water Treatment Equipment Market,” finds that the market earned revenues of $11 billion in 2013 and estimates this to reach $18.8 billion in 2020. The residential sector is expected to account for 67.4% of the total market, fueled by stringent regulations for household water treatment in some environment-conscious countries such as the U.S., Singapore, the U.K., Germany, India and China. Nevertheless, light commercial WTE is catching up and is forecast to witness a compound annual growth rate of 8.9%.
“Premium products will see better market penetration in developed countries,” said Frost & Sullivan Energy and Environmental Research Analyst Vandhana Ravi. “Preference for countertop systems will increase in Asia-Pacific, while under-the-sink and point-of-entry systems will gain traction in North America and Europe.”
However, pricing issues and a fragmented market structure that faces stiff competition from the bottled water market will create a highly challenging business environment in the short term. Bottled water provides additional customization by catering to the physical fitness and wellness sector and is marketed with supplemental minerals and ionizers. Nevertheless, this segment will gradually lose out owing to environmental concerns on use of plastics.
As awareness spreads, end user preference will turn toward suppliers offering holistic WTE solutions. Reducing intermediary channels will bring the supplier closer to customers, in turn shortening the value chain, allowing suppliers to act as one-stop solution providers and curbing costs.
“Hence, direct sales channels will remain the most profitable route of distribution, with technological advancements through Web sales catching up in the developed countries of Europe, North America and certain regions of Asia-Pacific,” Ravi said. “To that end, the market is undergoing consolidation with companies acquiring distributors, especially in the light commercial space.”
Meanwhile, the rental business will continue to boost market revenues due to the added advantages of reliable after-sales service for customers and recurring monthly income for equipment suppliers.