Industry Growth Overview(compounded sales growth)

Years(10) Years(5)

Prism Johnson 4% 4%

Somany 8% 9%

Kajairia 10% 9%

Orient Bell 2% 3%

Asian Granito(AGL) 7% 5%

Source: screener

Over the past decade, the organized tile industry has struggled to keep pace with other home improvement sectors like cement, paints, adhesives, plywood, and wires & cables. Unlike these industries, where organized players have strengthened their market positions, the tile industry remains largely fragmented, with unorganized manufacturers continuing to dominate.

Key Observations:

1. Organized Players Lag Behind Other Home Improvement Sectors: Inflation-adjusted data reveals that tile manufacturers have seen significantly slower growth compared to cement, paints, adhesives, plywood, and cables. This indicates a lack of aggressive market capture strategies in the organized tile sector.
2. Unsuccessful Transition from Unorganized to Organized: Unlike other industries that have successfully transitioned from unorganized to organized players, the tile industry has failed to make this shift. A major reason for this is the resilience of unorganized players in adapting to market changes and technological advancements.
3. Demonetization, GST, and COVID Accelerated Industry Shifts Elsewhere, But Not in Tiles: While these major economic events accelerated the transition in many industries, unorganized Morbi-based players in tiles adapted faster than their organized counterparts, further hindering the market shift.
4. Technology Investments by Unorganized Players Arrested Migration: Over the last 10 years, unorganized players have successfully upgraded their technology, closing the gap with organized manufacturers. This has reduced the incentive for market consolidation.
5. Unorganized Players Lead in Exports Despite Quality Conscious Markets: The assumption that organized players deliver superior quality does not hold up in exports. In reality, unorganized manufacturers export more than their organized competitors, proving that they meet or exceed global quality standards.
6. Emerging Organized Players From the Unorganized Sector: Key brands such as Simpolo, Varmora, and Millennium successfully transitioned from unorganized to organized players through a strong focus on quality. Their journey demonstrates that unorganized businesses with clear strategies and execution plans can enter the organized market successfully.

What’s Next for the Tile Industry?

For the Indian tile sector to grow and compete on a larger scale, organized players need a structured game plan. The industry must focus on:

• Technology-driven manufacturing: Investments in automation and process optimization can enhance competitiveness.
• Brand-building and marketing: Creating strong brands with value propositions that appeal to customers can help capture market share.
• Export-driven strategies: Learning from the unorganized players’ export success, organized firms should tap into international markets with a structured approach.
• Competitive pricing and supply chain improvements: Reducing costs and improving distribution networks can help organized firms expand their reach.

The organized tile sector needs a fresh perspective to match the pace of other industries. With the right strategy, the industry can transform and thrive.

What do you think is needed for this shift? Let’s discuss! #Tiles #HomeImprovement #SME #BusinessGrowth