The Indian UPS market was worth $528.5 million in 2010-11 and is projected to reach $828.2 million by 2017-18, according to a new analysis from research firm Frost & Sullivan.
The firm said that the competitiveness in the market is intensifying, with barriers to the entry of new participants, especially in the up to 20kVA power range, becoming lower. The biggest challenges faced by UPS manufacturers will be cheap imports from China and Taiwan as well as rising raw material prices.
According to Frost & Sullivan’s Energy and Power Systems analyst, the UPS industry is advancing towards providing various value added services such as power quality audit, thermograph survey and remote monitoring services due to the increasing demand from IT/ ITeS, manufacturing as well as government and infrastructure end users. “The industry is also moving towards an efficient battery management environment and proper monitoring of batteries, thus extending battery life,” the analyst said
The penetration of the IT/ITeS sector in tier 2 and tier 3 cities and the computerization initiatives of the government in various departments will be key drivers.
Customers are increasingly seeking a single-point solution for their total power protection needs. Hence, another trend in the market is that of UPS suppliers upgrading themselves to become total power solutions providers, the findings revealed.
The analyst cautioned that cheap imports from China and Taiwan, paralleled by mounting raw material prices, will pose significant challenges to Indian UPS manufacturers. Increase in battery prices, coupled with rising manpower costs, has resulted in UPS suppliers struggling to maintain their margins.
“There is a considerable amount of price pressure in the UPS market,” the analyst said. “Presence of a large number of unorganized suppliers with lower priced product offerings has resulted in stiff competition in the domestic/SOHO segments, especially in the less-than-1 kVA and 1-5 kVA segments.”
Different end users of UPS have specific applications and, hence, they expect product customization to suit their requirements.
The report revealed that it will be important for suppliers to offer customized solutions to end-user groups as it will help them survive and sustain higher growth rates in this fiercely competitive market.