The Indian hand tool market is estimated at around 200Mln US$, growing at around 12% p.a. Some of the highlights of this sector are;
The hand tool industry is labor and energy intensive
India’s competitive advantage is because of low labor cost and availability of raw material
There are an estimated 2500 manufacturers in India-out of which 95% are in small scale sector.
The type of products being manufactured are – General Purpose (Spanners & Wrenches, screwdrivers, Pliers , Sockets etc), Agriculture & Garden Tools (Spade, Shovels etc), Goldsmith tools & Watchmaker tools
The major manufacturing clusters are- Ludhiana in Punjab. There are a few manufacturers around Delhi and Mumbai as well.
The small scale units give a run for money to the larger players. And the unbranded segment has 50% of the market share.
Only a few industries and Original Equipment Manufacturers (OEMs) are brand conscious
End users buy tools individually and not in packs/ bundles
Imports from China are also rampant in the market
Organized manufacturers also have a parallel distribution to sell in unbranded market
The sales of tool storage devices are low as customers get them tailor made by local fabricators.
There are a few exclusive dealers. Most of them sell multiple brands (maybe not competing products- i.e. hand tools and power tools)
Some of the upcoming trends in this market are:
Technological up-gradation in the automobiles being manufactured in India requires sophisticated tools and equipment. Moreover maintenance level of these new generation vehicles is also reducing
Growing preference of power tools over hand tools by automotive garages, especially new ones.
Some of the promising sectors which need better quality products are De-fence, Railways, Automobile and Aerospace. However for tapping these sectors, one needs to have the right distributor network in place.
The larger organized players are expanding their sales team
Some companies have started doing e-selling, however the proportion of sales is still very small (2%)
Organized players have launched Home Tool kit catering to household sector
Some of the small scale manufacturers have upgraded themselves and are now competing with established organized players.
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Kuldeep Bhardwaj, Cofounder & Director-Business Development at Expand in India is an FMS-Delhi alumni having more than 20 years of experience in running businesses for Global and Indian Firms. He has been involved with the Industrial Tools Industry for the last 8 years.
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