The Indian Industrial Automation market is seeing a robust growth driven by increasing demand in the automotive, textile, pharmaceutical , material handling, water & waste water, process, and food and beverage industries. The market has been growing at a fast pace over the last two years @12-15% p.a.
The highlights of the distribution channel of this market are :
- There are around 500-600 distributors in India who sell Industrial Automation Products (PLCs, Drives, Sensors etc) in India.
- There is a strong connect with the Electrical Industry, as the companies offering Industrial Automation also offer Electrical products (adjacent/overlapping end use applications).
- 40% of these distributors are dedicated with the leading 4-5 players, and the others are either “sell all” or with other companies.
- 50-60 distributors are the main ones who would contribute almost >50% of the channel business for Industrial Automation.
- Distributors account for almost 50% of the combined Electrical + Automation market. For Industrial Automation alone, sale through distributors could be around 15-20%
- 30-35% market is unorganised.
Route to Market for Electrical + Automation Market
There are around 400 System Integrators (medium & large), with almost 70% of these working with the top 5 companies in the Indian market.
Company-wise System Integrators (Industrial Automation)
While the largest System Integrators (SIs) have been doing a business of almost US$20-25 mn, the average size of the SIs would be @ US$2 mn. In between the extremes are the firms which are doing exceedingly well and looking at further expansion (organic/inorganic), others who are happy maintaining their status quo growing at the industry rate of growth, and yet others who are looking at buyers for their business or strategic partnerships (lack of second generation to take it forward).
This last category is the one which offers good opportunities to global Industrial Automation firms eying India entry or who are already present in India but looking at inorganic expansion.
Rohit Chaturvedi is the Managing Director of Expand in India, a venture that provides business advisory and execution services to companies eyeing business expansion opportunities in India.
An alumnus of Indian Institute of Management, Lucknow, Rohit has previously worked for well-known multinational companies, including DuPont and Schneider Electric.
Note: The views expressed in this blog are the author's own expert opinions, and do not necessarily reflect the official policy or position of RCPC and its employees. RCPC cannot be held responsible for the use which may be made of the information contained therein.
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