Analysis of the apartment renovation market in India
The relevance of research
Repair work in the premises of the apartment is a set of measures for the dismantling of old finishing layers, existing partitions and structural elements, rough and fine finishing, installation of plumbing fixtures with water supply and sewerage pipes (pipe routing). In the course of work, if necessary, electrical installation is also carried out.
Purpose of the study
Analysis of the state of the apartment renovation market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the apartment renovation market
Content
Part 1. Overview of the Indian apartment renovation market
1.1. Definition and Characteristics of the Indian Apartment Renovation Market
1.2. Dynamics of the volume of the Indian apartment renovation market, 2015-2019
1.3. Market structure by type of service provided in India
1.4. The structure of the apartment renovation market in the Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2. Competitive Analysis in the Indian Apartment Renovation Market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of apartment renovation consumption
3.1. Estimation of consumption of apartment renovation per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast for the development of the apartment renovation market until 2024
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian apartment renovation market
1.1. Definition and Characteristics of the Indian Apartment Renovation Market
Repair work in the premises of the apartment is a set of measures for the dismantling of old finishing layers, existing partitions and structural elements, rough and fine finishing, installation of plumbing fixtures with water supply and sewerage pipes (pipe routing). During the work, if necessary, electrical installations are also carried out.
The Indian apartment renovation market is distinguished by the following features that make it difficult to assess the market:
The domestic market for repair services is considered one of the most opaque.
A significant share is occupied by private entrepreneurs, individuals (self-employed).
A variety of OKVED codes, which are used to record activities in the field of apartment renovation.
Basic code: OKVED code 43.39 - Production of other finishing and finishing works.
This grouping includes:
installation of private swimming pools,
steam blasting, sandblasting and other cleaning of building facades,
production of other finishing and finishing works not included in other groups, for example, installation of decorative metal products (panels, nets, grilles, including on radiators)
In addition, apartment renovation companies register additional codes:
OKVED code 43.99 - Other construction works.
OKVED code 43.21 - Electrical installation work
OKVED code 43.99.1 - Insulation works
OKVED code 43.29 - Installation of other engineering equipment
OKVED code 43.31 - Production of plastering works
OKVED code 43.33 - Installation of floor coverings and wall cladding
OKVED code 43.34 - Production of painting and glazing
OKVED code 43.34.2 - Production of glass works
OKVED code 43.34.1 - Painting works
1.2. Dynamics of the volume of the Indian apartment renovation market, 2015-2019
The volume of the market for services for the repair and construction of housing and other buildings, according to Rosstat, ...
Diagram 1. Dynamics of the market volume of services for the repair and construction of housing and other buildings in India, 2015-2019 in value terms
The share of services for the repair and construction of housing in the total volume of personal services in 2019 amounted to ...% - the market is one of the most capacious segments of personal services.
In accordance with the volume and dynamics of the housing construction and renovation services market, the market structure by type of service and by type of performers, the apartment renovation services market (taking into account the assessment of the shadow segment, which is not included in the Rosstat database) in 2019 is estimated at the level ... billion Rs.
...
1.3. Market structure by type of service provided in India
In the structure of the market by type of services provided in India, the main part falls on finishing works - ...% (of the total supply in the category ""Repair of apartments"" on Avito.ru), in second place is turnkey repair ...
1.4. The structure of the apartment renovation market in the Union Territories
In the geographic structure of the market, the Central Union Territories account for ...% of the market ...
Diagram 6. The structure of the provision of apartment renovation in India by Union Territories in 2019 in value terms, %
1.5. Assessment of current trends and development prospects of the studied market
Apartment renovation market trends are associated with real estate market trends (since the purchase of housing in new buildings is interconnected with repairs), as well as with trends in the apartment renovation market as a separate segment.
Apartment renovation market trends:
...
Real estate market trends:
...
1.6. Assessment of factors affecting the market
Macroeconomic factors
Let's consider the main factors influencing the market and, accordingly, the demand in the apartment renovation market.
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
...
Let's take a look at some experts' assessments:
...
World Bank forecast. Source: https://www.vsemirnyjbank.org/. Forecast date July 6, 2020
...
Bank of India forecast. Source: cbr.ru Forecast date June 29, 2020
...
IMF forecast. Source: Expert Online. Forecast date: June 25, 2020
...
Forecast Expert RA. Source: https://1prime.ru/ Forecast date: June 15, 2020
...
Forecast of the Organization for Economic Cooperation and Development (OECD). Source: https://www.rbc.ru/. Forecast date: June 10, 2020
...
Forecast by Fitch Agency. Source: https://www.forbes.ru/. Forecast date: June 29, 2020
...
HSE forecast. Source: https://rns.online/. Forecast date: June 3, 2020
...
Thus, experts disagree significantly about the real dynamics of India's GDP in 2020: ...
Social factors
...
Real disposable income
...
Thus, at present, according to the totality of the considered economic and social factors, the following is observed:
...
Political factors
The influence of political factors on the apartment renovation market is typical for most industries in the service sector: the development of the legal status of the self-employed population, the promotion of the legalization of the shadow segment. In general, the influence of the factor is assessed as insignificant.
Technological factors
From the point of view of technology development, the apartment renovation market depends primarily on the emergence of new materials and tools. The impact of IT technologies on the industry, unlike other industries, has a lesser impact (due to the characteristics of services). The main factor influencing the industry is the development of aggregators (websites that bring together performers and customers).
The sectoral factors are: residential real estate market (primary and secondary market).
Diagram 12. Dynamics of commissioning of residential premises in India in 2015-2019, million cubic meters m
The commissioning of new residential premises is cyclical ...
Let's consider the main factors influencing the market and, accordingly, the demand in the apartment renovation market.
A group of technological factors has a positive impact on the development of the market; they contribute to the development of the industry with the accumulated world experience and the latest technologies.
Table 2. STEP analysis of factors influencing the apartment renovation market
1.7. Analysis of sectoral indicators of financial and economic activity
Current liquidity ratio (Ktl) - the ratio of the value of short-term assets to the value of short-term liabilities of the enterprise.
...
The absolute liquidity ratio shows what proportion of short-term debt obligations will be covered by cash and their equivalents in the form of marketable securities and deposits, i.e., absolutely liquid assets.
...
The financial stability ratio shows how the company's assets are financed from reliable and long-term sources. That is, it shows the share of sources for financing its activities that the company can attract on a voluntary basis.
...
In general, the analysis of the main financial indicators indicates the financial stability of the industry, despite a slight decrease in profitability in the industry as a whole.
Part 2. Competitive Analysis in the Indian Apartment Renovation Market
2.1. Major players in the market
The apartment renovation market in India is low concentrated, with a significant number of both businesses and individuals in the market.
According to the Avito.ru service, about 90 individuals offer services in the “finishing work” category alone.
...
2.2. Market shares of the largest competitors
As mentioned earlier, the apartment renovation market is low-concentrated, the largest players account for ...% of the market. At the same time, the share of the company in the first place is ...%, in the fifth ...%.
2.3. Profiles of major players
XXX OOO
...
XXX, OOO
...
XXX, OOO
...
XXX, OOO
...
XXX, OOO
...
Diagram 18. Dynamics of the total revenue of the largest apartment renovation market operators (TOP-5) in India, 2015-2019
Part 3. Analysis of apartment renovation consumption
3.1. Estimation of consumption of apartment renovation per capita
The volume of consumption of services for the repair of apartments per capita increased ...
The dynamics of consumption per capita is related to the dynamics of the market volume as a whole.
3.2. Market Saturation and Estimated Market Potential in India
The need for renovation of premises can be divided into 2 categories: the need for renovation of new apartments and the need for renovation of the existing stock.
...
Thus, the potential capacity of the apartment renovation market in India is estimated at... . In other words, the repair market potential is limited only by the purchasing power of the population (real disposable income).
3.3. Description of consumer preferences
An analysis of consumer preferences based on reviews of construction companies given on the specialized resource top-remont-kvartir.com allows us to conclude that the main reviews (both positive and negative) relate to the quality of communication and compliance with technology by the team that repairs the apartment , issues of timing are also highlighted (compliance with deadlines, speed of repairs).
Diagram 20. Consumer preferences in the repair market, in % of the total number of recalls
It should be noted the emergence of such a preference as the possibility of receiving a report on the repair by messengers (especially in the case of a long departure of the owner of the apartment).
In general, preferences in the apartment renovation market correspond to the preferences of most segments of the service market: quality and terms of work.
3.4. Price analysis
Average apartment renovation prices for 2015-2020 (January-June) increased by ...%.
Table 13. Consumer price indices in the apartment renovation market in India in 2015-2020 (available period), %
On average in India, the cost of repairing 1 sq. m of housing (based on an analysis of current offers for September 2020).
Part 4. Assessment of factors of investment attractiveness of the market
The investment attractiveness of the market is assessed based on an analysis of a combination of factors: sales potential, demand potential, barriers, main trends, competitiveness
...
The positive factors of the investment climate in the apartment renovation industry dominate over the negative ones. A comprehensive assessment of investment attractiveness factors is 1,82 points - a favorable investment climate.
None of the groups of factors has a negative impact on the assessment of the investment attractiveness of the apartment renovation market.
The most significant positive factors. The group of factors associated with the competitiveness of products has the greatest positive impact.
Part 5. Forecast for the development of the apartment renovation market until 2024
Market forecast for the period 2021-2024 were based on an analysis of the impact of previous crises on the market, actual data on market growth rates in 1-4 years after the crisis in value terms.
...
The analysis carried out allows us to conclude that the dynamics of the apartment market in value terms weakly correlates with the dynamics of GDP during crises.
...
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
The situation in the market
...
Macroeconomic factors affecting the considered market
...
Conclusions on the prospects for the development of enterprises
The outlook for apartment renovation companies in India is due to the influence of the following trends:
...
Go-to-Market Recommendations
For successful development / entry into the apartment renovation market, it is recommended:
...
Diagrams
Diagram 1. Dynamics of the market volume of services for the repair and construction of housing and other buildings in India, 2015-2019 in value terms
Diagram 2. The structure of the market for the repair and construction of housing and other premises in India in 2020
Diagram 3. The structure of the market for apartment renovation services by type of performer in India in 2020
Diagram 4. Dynamics of the volume of the apartment renovation market, 2015-2019, billion Rs.
Diagram 5. The structure of the apartment renovation market by type in India in 2020,%
Diagram 6. The structure of the provision of apartment renovation in India by Union Territories in 2019 in value terms, %
Chart 7. Dynamics of India's GDP, 2007-2019, Q1 2020, % to the previous year
Chart 8. Monthly dynamics of the US dollar against the rupee, 2015-2020 (Jan.-June), Rs. for 1 US dollar
Diagram 9. Population dynamics in India as of January 1, 2010-2020, million people, %
Diagram 10. Population forecast in India for the period 2021-2024, million people
Diagram 11. Dynamics of real incomes of the population of India, 2014 - Q1 2020, % to the previous year
Diagram 12. Dynamics of commissioning of residential premises in India in 2015-2019, million cubic meters m
Diagram 13. Profitability of profit before tax (profit of the reporting period) in the field of apartment renovation in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 14. Current liquidity (total coverage) in the field of apartment renovation for 2015-2019, times
Diagram 15. Business activity (average period of receivables turnover) in the field of apartment renovation, for 2015-2019, days
Diagram 16. Financial sustainability (security of own working capital) in the field of apartment renovation, in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 17. Shares of the largest competitors in the apartment renovation market in 2019
Diagram 18. Dynamics of the total revenue of the largest apartment renovation market operators (TOP-5) in India, 2015-2019
Diagram 19. Volume of apartment renovation consumption per capita, 2015-2019, Rs./person
Diagram 20. Consumer preferences in the repair market, in % of the total number of reviews.
Diagram 21. Forecast of the volume of the apartment renovation market in 2020-2024
Tables
Table 1. Expert forecasts for the decline in real GDP in India in 2020, %
Table 2. STEP analysis of factors influencing the apartment renovation market
Table 3. Profit (loss) before tax for the apartment renovation industry in the Union Territories of India, 2015-2019, thousand Rs.
Table 4. Gross margin of the apartment renovation industry in comparison with all sectors of the Indian economy, 2015-2019, %
Table 5. Absolute liquidity in the area of apartment renovation in comparison with all sectors of the Indian economy, 2015-2019, times
Table 6. Main companies participating in the apartment renovation market in 2019
Table 7. Basic information about participant No. 1 in the apartment renovation market
Table 8. Basic information about participant No. 2 in the apartment renovation market
Table 9. Basic information about participant No. 3 in the apartment renovation market
Table 10. Basic information about participant No. 4 in the apartment renovation market
Table 11. Basic information about participant No. 5 in the apartment renovation market
Table 12 Potential Size and Saturation of the Apartment Renovation Market in India (2019 Estimate)
Table 13. Consumer price indices in the apartment renovation market in India in 2015-2020 (available period), %
Table 14. Average prices in the apartment renovation market in the Union Territories
Table 15. Assessment of factors of investment attractiveness of the apartment renovation market
Table 16. Analysis of the output of the apartment renovation market industry from the crises of previous years, market growth rates in value terms
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