Residential Water Treatment Markets in Select
Countries
“As the economic downturn sets in at home, it may be
time to take advantage of the residential water treatment
markets growing abroad.”
Shilpa Tiku, Consultant
Environmental & Building Technologies
October 8, 2009

Residential Water Treatment Market: Focus Points
Countries include the following:
U.S. China India Brazil Mexico
The briefing covers the following:
• Market Scope
• Market Drivers
• Market Restraints
• Market Movement and Revenue Forecasts
• Market Leaders
2

Residential Water Treatment Market: Economic Downturn
• The residential water treatment market is strongly related to the
housing market and macroeconomic situations.
• As a result, the current housing market downturn continues to
pose a negative impact on the growth of the residential water
treatment industry.
3

Residential Water Treatment Market: Growth Rate
Country CAGR (%) (2008-2015)
China √ 27.6
India √ 21.2
Mexico √ 12.2
Brazil 10.4
United States 5.8
4

Residential Water Treatment Market: Market Segmentation
• For the purposes of this research, residential water
treatment systems are defined as follows:
• Point-of-Use (POU) : Under the sink (UTS) systems, counter top
(CT) systems, and faucet mount (FM) systems
• Point-of-Entry (POE) : Water softeners, carbon, and Ultraviolet (UV)
systems
• Water Pitchers
5

Hot Topics
(from the current year and beyond)
• Voice of the Customer: Perceptions and Behavior Toward Bottled
Water Market
• Global Water Recycling Water Equipment Markets
• Opportunities in Latin American Industrial Water Market
• Brazilian Industrial Water and Wastewater Treatment Market
• Strategic Profiles of Leading and Emerging Companies in the
North American Water Industry
6

Residential Water Treatment Market: U.S. Market Drivers ,
2009-2015
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Increased customers' access and exposure to RWT Very High Very High
products through the Big-Box retail channel propelling High
overall market growth
2 Media coverage of drinking water contamination related Very High High High
outbreak leads to health concerns that drive
instantaneous adoption of RWTS
3 Rising consumers' expectation on drinking water quality High High High
4 Aging infrastructure creating growing concerns for Med/High Med/High Med/High
drinking water safety from all sources including
municipal systems
5 Ease of use resulting in growing adoption rate Low/Med Low/Med Medium
6 Marketing and advertising increases product Low/Med Low/Med Low/Med
consumption and revenue growth
7 Pitcher products continue to address the key concern for Low/Med Low/Med Low/Med
taste and odor
Source: Frost & Sullivan
7

Residential Water Treatment Market: U.S. Market
Restraints, 2009-2015
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Lack of marketing and advertising budgets from Medium Medium Medium
industry participants limiting product visibility
2 Water quality remains a non-issue for many Low/Med Low/Med Low/Med
consumers despite a rising level of overall
awareness
3 RWTS not considered as essential appliances Medium Low/Med Low/Med
4 Lack of product differentiation hampering market Medium Medium Medium
growth
5 Housing Markets downturn impeding the growth of Med/High Med/High Medium
related consumer product segments such as
household appliances
6 Lack of portability and convenience of POU units Med/High Med/High Medium
that require permanent installations
Source: Frost & Sullivan
8

Residential Water Treatment Market: Market Drivers and
Restraints Ranked in Order of Impact (India), 2009-2015
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Scarcity of clean water High High High
2 Growing awareness about health High High High
3 High disposable incomes High Medium Medium
4 Increasing availability of alternatives to boiled water High Medium Medium
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Lack of after-sales service High High Medium
2 Low awareness levels among low income groups High Medium Medium
3 Choice of sales channel High Medium Medium
4 Price sensitivity Medium Medium Medium
Source: Frost & Sullivan
9

Residential Water Treatment Market: Market Drivers and
Restraints Ranked in Order of Impact (China), 2009-2015
Rank Driver 1-2 3-4 5-7
Years Years Years
Increase in water contaminations and shortage of safe
1 High High Medium
drinking water supply
Steady increase of income and purchasing power of
2 Medium Medium High
most urban residents
Chinese residents’ increasing awareness of self
3 Medium Medium Medium
protection and health
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
Medium/
1 No criteria regarding after-sales services High Medium
Low
Lack of strong branding and supervision for product
2 High Medium Low
quality
Source: Frost & Sullivan
10

Residential Water Treatment Market: Market Drivers and
Restraints Ranked in Order of Impact (Brazil), 2009-2015
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Aggressive marketing done by RWT suppliers High High High
2 Increasing consumer awareness regarding the poor High High High
quality of water
3 Consumers interest in adopting new water treatment Medium Medium Medium
systems versus the conventional clay filters
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Low awareness levels among low-income groups High High High
2 Boiling and partial filtration being perceived as High Medium Medium
sufficient water treatment
3 Market potential for high-end products being reduced High Medium Medium
by price sensitivity
Source: Frost & Sullivan
11

Residential Water Treatment Market: Market Drivers and
Restraints Ranked in Order of Impact (Mexico), 2009-2015
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Increasing consumer awareness about poor quality of High High High
drinking water
2 Increasing trend include POE systems in new housing High High High
3 New construction activities drive sales High High High
4 Increasing media coverage about the poor quality of High Medium Medium
Rank some brands of bottled water
Restraint 1-2 Years 3-4 Years 5-7 Years
1 Lack of education about water issues among the low- High High High
and middle-income population
2 Boiling and partial filtration is perceived as sufficient High High High
water treatment
3 High price of residential water treatment systems High Medium Medium
4 Lack of clarity among buyers about the technology Medium Medium Medium
and functioning of residential water treatment
systems
12

Residential Water Treatment Market: Total Market Size
• The total residential market in the select 5 countries is valued at
$3.2 billion in 2008.
9,900.5
10000.0 21.0%
9000.0 19.0%
8,227.0
8000.0 17.0%
6,921.5
Growth Percentage (%)
7000.0 15.0%
Revenues ($ Million)
5,858.1
6000.0 13.0%
4,985.7
5000.0 11.0%
4,272.7
4000.0 3,685.7 9.0%
3,215.5
2,828.6
3000.0 2,509.8 7.0%
2000.0 5.0%
1000.0 3.0%
0.0 1.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenues($Million) Revenue Growth Rate (%)
13

Residential Water Treatment Market: Major Industry
Participants
14

Conclusion
• POU is the most significant product segment to consider in
almost all countries researched.
• India has a large market for CT systems. India could be an
attractive market with revenue potential of $1.92 billion by 2015.
• In 2015, China will likely be the largest residential water
treatment market.
15

Next Steps
Register for the next Chairman’s Series on Growth:
The Growth Excellence Model: Competitive Benchmarking & Growth
Investing (November 3, 2009) (http://www.frost.com/growth)
Register for Frost & Sullivan’s Growth Opportunity Newsletter and
keep abreast of innovative growth opportunities
(www.frost.com/news)
16

Your Feedback is Important to Us
What would you like to see from Frost & Sullivan?
Growth Forecasts?
Competitive Structure?
Emerging Trends?
Strategic Recommendations?
Other?
Please inform us by taking our survey.
17

For Additional Information
Name: Diana Bragg
Name: Johanna Haynes Director of Sales
Corporate Communications Environmental & Building
(210) 247-3870 Technologies
johanna.haynes@frost.com (210)247-3879
dbragg@frost.com
Name: Keith Robinson
Research Manager
Environmental and Building
Technologies
(210) 247-2402
krobinson@frost.com
18