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Market analysis of cleaning services in India

Release date 02.06.2022

Number of pages 44

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The relevance of research

The services of cleaning companies are used not only by organizations - large shopping centers, office buildings and educational institutions, but also by owners of private houses and apartments, often cleaning companies act as contractors and perform maintenance and cleaning of residential buildings and adjacent areas.

Purpose of the study

Analysis of the state of the cleaning services market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the cleaning services market)

Content

Part 1. Overview of the Indian cleaning services market

1.1. Definition and Characteristics of the Indian Cleaning Market

1.2. Dynamics of the volume of the Indian cleaning services market, 2017-2021

1.3. Market structure by type of service provided in India

1.4. Structure of the cleaning services market by 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 cleaning services market in India

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 the consumption of cleaning services

3.1. Estimated consumption of cleaning services 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 cleaning services market until 2026

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 cleaning services market

1.1. Definition and Characteristics of the Indian Cleaning Market

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In India, more than 12 thousand companies are currently operating in the field of cleaning services. Such companies can be conditionally divided by the number of employees in the state:

largest operators (more than 500 employees)
large operators (staff from 200 to 500 people)
medium operators (staff from 50 to 200 people)
small operators (staff up to 50 people)

The number of staff, in this case, refers to the number of employees directly involved in cleaning. The fourth group is the most numerous in quantitative terms: there are a lot of similar enterprises in India. Among them, firms with 5-20 employees predominate.

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The criteria for choosing a cleaning company are: authority in the market, the cost and range of services provided, the level of equipment, technologies and chemicals used in the work, the qualifications of the staff, the system for monitoring cleaning performance.

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1.2. Dynamics of the volume of the Indian cleaning services market, 2017-2021

Consider the dynamics of the volume of the cleaning services market in India in 2017-2021.

Diagram 1. Dynamics of the volume of the cleaning services market, 2017-2021

The market of cleaning services in India during the study period shows stable growth, the average annual growth rate is …%. The maximum growth was recorded at the end of 2017 – the market volume increased by …% against the indicators of 2016, in 2018-2019. the market grew by …% and …%, in 2020 an increase was recorded close to the maximum indicator – …%, in 2021 the growth rate of the market volume slowed down and amounted to …% compared to the indicators of 2021.

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1.3. Market structure by type of service provided in India

The Indian cleaning services market can be divided into three segments according to the types of work carried out by the market operators:

general cleaning activities of buildings;
other cleaning and cleaning activities of residential buildings and non-residential premises;
other cleaning and tidying activities.

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1.4. Structure of the cleaning services market by Union Territories

In the structure of revenue from the provision of cleaning services in the union territories, the largest share during the study period remains with the Central Federal District …%, since this federal district has a high concentration of enterprises and organizations of various levels, a high demand for cleaning services, and the largest operators of the industry are registered, often having production facilities in other federal districts.

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Diagram 3. The structure of the provision of cleaning services in India by Union Territories, %

1.5. Assessment of current trends and development prospects of the studied market

In 2020, the situation on the cleaning services market was also complicated due to restrictions related to the coronavirus pandemic. For a long time, shopping and entertainment centers were closed, offices transferred employees to remote work, and the income of customers of cleaning services fell. In 2021, the situation in adjacent markets where there are cleaning services consumer companies has improved, as has the economic situation in the country as a whole.

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Experts and analysts note an increase in demand for apartment cleaning services in 2021: according to Avito Services, in January-August 2021, the number of orders doubled, and the supply increased by …%. ""Profi"" reported that from January to August the demand for cleaning increased by ...%, and the main peak of orders fell on the end of April, which can be associated with cleaning before Easter. YouDo noted that in 2021 the demand for cleaning services increased by … %, in particular, they began to look for window cleaning contractors twice as often, the demand for general cleaning increased by almost a third, for supporting cleaning by … %, by garbage removal - by ... %, for work in the garden and vegetable garden - by ... %.

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The volume of the cleaning services market in monetary terms is growing annually and this growth will continue due to several factors: the recovery in demand for cleaning services in the corporate segment, the stable demand for cleaning services in the apartment cleaning segment, the increase in the cost of services for the above reasons, as well as the exit of companies who have carried out measures for internal preparation and optimization of processes, to the ""white"" market.

1.6. Assessment of factors affecting the market

Let's consider the main factors influencing the market and, accordingly, the demand in the cleaning services market in India.

Economic forces:

Gross domestic product (GDP) is one of the most important macroeconomic indicators.

It reflects the market value of all final goods and services intended for direct consumption, which were produced for a certain period (quarter, year) in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used.

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According to Rosstat, as of February 21.02.2022, 2022, the growth rate of the Indian economy in the st quarter of will accelerate to ... % in annual terms compared to ... % in the th quarter of last year. Such a forecast is contained in the February report of the Central Bank on monetary policy.

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Table 1. STEP analysis of factors influencing the cleaning services market

Based on the analysis of factors affecting the cleaning services market in India, in 2021, there is a predominant influence of positive factors on the market, and, accordingly, on demand.

Restraining factors are the negative dynamics of population growth, the unstable exchange rate of the national currency, the increase in the cost of consumables and equipment, and changes in consumer behavior.

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1.7. Analysis of sectoral indicators of financial and economic activity

Gross margin is an economic indicator that characterizes the ratio of gross profit to revenue and allows you to evaluate the efficiency of an industry or enterprise.

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Profitability before tax is an economic indicator that characterizes the ratio of gross profit to revenue, in other words, how much profit is in each ruble from services sold.

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A decrease in the maturity of receivables is positively assessed, and vice versa. However, too tight control of the repayment of receivables can lead to the loss of customers, too soft - to the emergence of a shortage of working capital and weakening the payment discipline of debtors, many of whom, according to the old Indian tradition, are delaying payment ""to the last"".

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The equity ratio characterizes the availability of own working capital of the enterprises of the industry, necessary for financial stability. Lack of own working capital, i.e. the negative value of the coefficient indicates that all the current assets of the organization and, possibly, part of the non-current assets are formed from borrowed sources.

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Part 2. Competitive analysis in the cleaning services market in India

2.1. Major players in the market

Table 4. Main companies participating in the cleaning services market in 2021

There are currently over 12 companies in the cleaning services industry in India. In every state of the Indian Federation, there are companies providing cleaning services in various formats, from municipal street cleaning companies to private cleaning companies providing cleaning and cleaning services to businesses and organizations, as well as individuals.

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2.2. Market shares of the largest competitors

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Diagram 12. Shares of the largest competitors in the cleaning services market in 2021

2.3. Profiles of major players

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Diagram 13 shows the dynamics of the total revenue of the largest market players for all types of activities of these organizations. It should be noted that the revenue dynamics of the TOP-5 companies in 2021 is different than in 2020, since the composition of the market leaders has changed.

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Part 3. Analysis of the consumption of cleaning services

3.1. Estimated consumption of cleaning services per capita

Consider the dynamics of the volume of consumption of cleaning services per capita in India in 2017-2021.

The volume of consumption of cleaning services per capita in India as a whole correlates with the dynamics of the market volume, since the dynamics of the population over the study period, although it has a negative trend, is declining slightly.

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The maximum increase in consumption per capita falls on 2017 and amounts to … %, while the maximum value of consumption volume was recorded in 2021 and amounts to … Rs./person. Overall, per capita consumption of cleaning services in India almost doubled during the study period.

3.2. Market Saturation and Estimated Market Potential in India

Cleaning services are in demand and the market has good potential for development. The attractiveness of the business is ensured by the high demand for services - cleaning is required not only for enterprises, shopping centers and offices, but also for individuals.

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The market potential is also quite high in terms of consumption per capita per year, which is growing every year due to rising prices, but not with an increase in the consumption of the services themselves. According to GidMarket analysts, by 2026 the market will grow by … times and this growth will continue.

3.3. Description of consumer preferences

Experts and market operators, as before, highlight the following main consumer expectations:

stability of service quality indicators;
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When choosing a service provider, consumers pay attention to the following factors:

terms of payment;
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3.4. Price analysis

Prices for cleaning services in the Indian market are presented in a wide range and may differ several times within the same region. The cost depends on many factors: the size and passability of the object, the composition of the area, the frequency of cleaning, the type of coatings, special customer requirements, the season, etc. Depending on the region, prices differ slightly - within ...%: the higher the market wage of line personnel in region, the higher the cost of cleaning services.

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Part 4. Assessment of factors of investment attractiveness of the market

The positive factors of the investment climate in the cleaning services market prevail over the negative ones in the assessment. A comprehensive assessment of investment unattractiveness factors is ... points - a neutral investment climate.

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Part 5. Forecast for the development of the cleaning services market until 2026

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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators

The Indian cleaning services market shows consistently positive annual growth rates, has the potential to develop due to a neutral investment climate and relatively low entry barriers.

List of diagrams

Diagram 1. Dynamics of the volume of the cleaning services market, 2017-2021

Diagram 2. Structure of the cleaning services market by types, %

Diagram 3. The structure of the provision of cleaning services in India by Union Territories, %

Chart 5. Monthly dynamics of the US dollar against the rupee, 2017-2021, Rs. for 1 US dollar

Diagram 6. Population dynamics in India, as of 01 Jan. 2014-2022

Chart 7. Dynamics of real incomes of the population of India, 2014-2021

Diagram 8. Profitability of profit before tax (profit of the reporting period) in the field of cleaning services in comparison with all sectors of the Indian economy, 2017-2021, %

Diagram 9. Current liquidity (total coverage) in the field of cleaning services for 2017-2021, times

Diagram 10. Business activity (average receivables turnover period) in the field of cleaning services, for 2017-2021, days days

Diagram 11. Financial stability (security of own working capital) in the field of cleaning services, in comparison with all sectors of the Indian economy, 2017-2021, %

Diagram 12. Shares of the largest competitors in the cleaning services market in 2021

Diagram 13. Dynamics of the total revenue of the largest operators of the cleaning services market (TOP-5) in India, 2017-2021

Diagram 14. The volume of consumption of cleaning services per capita, 2017-2021, Rs./person

Diagram 15. Forecast of the volume of the cleaning services market in 2022-2026

List of tables

Table 1. STEP analysis of factors influencing the cleaning services market

Table 2. Gross margin of the cleaning services industry in comparison with all sectors of the Indian economy, 2017-2021, %

Table 3. Absolute liquidity in the cleaning services industry compared to all sectors of the Indian economy, 2017-2021, times

Table 4. Main companies participating in the cleaning services market in 2021

Table 5. Basic information about participant No. 1 of the cleaning services market

Table 6. Basic information about participant No. 2 of the cleaning services market

Table 7. Basic information about participant No. 3 of the cleaning services market

Table 8. Basic information about participant No. 4 of the cleaning services market

Table 9. Basic information about participant No. 5 of the cleaning services market

Table 10. Consumer price indices in the cleaning services market in India in 2017-2022 (available period), %

Table 11. Average prices in the market of cleaning services in the Union Territories

Table 12. Assessment of factors of investment attractiveness of the cleaning services market

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