Product differentiation and innovation are key in targeting the $14 billion market for point-of-use and point-of-entry water treatment products in developing nations, some of which will grow at an annual rate of nearly 20 percent, according to a study by Lux Research.
Overall, the market is growing at a modest 2.2 percent annually as countries such as China and South Korea reach maturity. But poorer countries such as Bangladesh and Myanmar offer remarkably high annual growth rates of up to 19 percent, according to Finding Growth and Differentiation in Small-Scale Water Treatment Markets.
Lux Research analysts evaluated the major markets, estimating each country’s market size and growth through 2030. They also analyzed 28 start-ups in the space on the “Lux Innovation Grid,” based on their technical value and business execution. Among their findings:
- China’s momentum will slow. China and India will dominate the markets till 2030, but the fastest growth will occur in the poorest countries such as Bangladesh and Myanmar. India still will grow at 9.3 percent, but China will slow as it shifts to a municipal treatment model, the report says.
- Companies with unique technologies have an opportunity to enter POU and POE markets. Electrolytic Ozone offers $100 ozone generators with long-lived diamond-coated electrodes and Absorbent Materials Company offers a modified silica product that removes toxic organics from water – both are rated “high-potential” on the Lux Innovation Grid.
- Incumbents need to adapt. Residential markets are highly commoditized and current leaders are vulnerable, because incumbent technologies such as activated carbon and reverse osmosis have significant limitations. Large markets will open to companies that can both develop superior performance and ease of use, the report says.
The US water treatment equipment market is projected to grow 5.9 percent a year to reach $13 billion in 2017, gains largely driven by concerns over the health risks and environmental impacts of biological contaminants, chemicals and disinfection byproducts in supply water and wastewater, according to a study by Freedonia Group released in July.