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Frost & Sullivan: Consumer Focus on Water Safety Transforms the Water Treatment Equipment Market

Mega Trends such as the increased importance of health, wellness and wellbeing are highlighting water safety issues and supporting strong growth in the global residential and light commercial water treatment equipment (WTE) market. The strict enforcement of water quality standards as well as regulations supporting upcoming innovative water treatment procedures is also driving the market. Currently, the Americas hold the biggest market share. WhileEurope presents the most environment-conscious and minimally cost-conscious market for WTE solutions,Asia-Pacific offers higher scope due to escalating demand from the region's burgeoning population and public health concerns.

New analysis from Frost & Sullivan, Global Residential and Light Commercial Water Treatment Equipment Market, finds that the market earned revenues of $11.03 billion in 2013 and estimates this to reach $18.80 billion in 2020. The residential sector is expected to account for 67.4 percent of the total market, fuelled by stringent regulations for household water treatment in some environment-conscious countries such asthe United States, Singapore, the United Kingdom, Germany, India and China. Nevertheless, light commercial WTE is catching up and is forecast to witness a compound annual growth rate of 8.9 percent.

"Premium products will see better market penetration in developed countries," said Frost & Sullivan Energy and Environmental Research AnalystVandhana Ravi. "Preference for counter top systems will increase inAsia-Pacific, while under-the-sink and point-of-entry systems will gain traction in the Americas andEurope."

However, pricing issues and a fragmented market structure that faces stiff competition from the bottled water market will create a highly challenging business environment in the short term. Bottled water provides additional customisation by catering to the physical fitness and wellness sector and is marketed with supplemental rich minerals and ionisers. Nevertheless, this segment will gradually lose out owing to environmental concerns on the use of plastics.

As awareness spreads, end-user preference will turn towards suppliers offering holistic WTE solutions. Reducing intermediary channels will bring the supplier closer to customers, in turn shortening the value chain, allowing suppliers to act as one-stop solution providers, and curbing costs.

"Hence, direct sales channels will remain the most profitable route of distribution, with technological advancements through Web sales catching up in the developed countries ofEurope and Americas and certain regions of Asia-Pacific," stated Ravi. "To that end, the market is undergoing consolidation with companies acquiring distributors, especially in the light commercial space."

Meanwhile, the rental business will continue to boost market revenues due to the added advantages of reliable after-sales service for customers and recurring monthly income for equipment suppliers
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