Power management solutions in India, unlike in the West, is a macroscopic market. There are national, regional, and local players, both in the branded and unbranded segment of power management solutions. Despite the presence of hundreds of players, the market for power management is not fully understood and hence the exact size of the market is unknown.

However, clearly, its the UPS that holds a major share in the power solutions market. Other constituents like cooling are bundled with power back up and management solutions offered by vendors. The UPS (all capacities) market is estimated at around Rs 2,500 crore. But data is available only for UPS below 5 kVA, and that market, according to IDC, was around 2,304,561 units in FY 08.

Market Dynamics
The top three all capacity power back up players are APC, Numeric and Emerson. They aim to get greater business out of the high end back up segment, starting from 5 kVA up to 5,000 kVA. Meanwhile, on the sub 5 kVA segment, in addition to these leading vendors, the market is composed of vendors like Microtek with all capacities of UPSes, and WeP and Powercom, which predominantly focus on the sub 5 kVA segments. In vendor shipments in the sub 5 KVA, in terms of units, APC and Numeric were clearly the leader with around 17.5% market share each. Interestingly, APC had a leadership position with 27% market share in FY 07, but that came down significantly in FY 08. The biggest gainer was Numeric, which increased its market share to 17.5% from 13% last year to come at par with APC.

The UPS market in India has become very unpredictable. While it is growing both in value and volume terms, there is severe pressure on end-user price points due to the increase in battery prices across the world and prices of raw materials like lead. Moreover, consolidation has also started happening in this sector. For instance, Eaton has acquired MGs below 10 kVA business last year and acquired majority stakes in Phonix Technologies, a leading Taiwanese OEM for many UPS vendors in India. However, Socomec, which forayed into India a couple of years ago through a JV with Numeric Power, has exited. This clearly shows the unpredictable nature of the UPS market in India.

Its an extremely competitive market that was growing significantly both in value and volume terms. However, there is severe pressure on end-user prices owing to global rise in battery prices and other raw materials like lead

In the vendor-wise performance, in the sub 5 kVA category, APC and Numeric dominate the market. Together they constitute close to 40% of the market in unit terms. APCs decline in the market share can be attributed to the overall increase in its pricing, and players like Numeric and Emerson getting aggressive. Given this, APC did put in efforts to tide over competition and started initiatives like rebates for channel partners, launched programs like Platinum Club Offer, and concentrated on improving upon market traction for its 500 VA and 650 VA low-end offerings.

Compared to last year, APCs UPS prices have gone up. But this is in line with the market trend, as most vendors offerings have gone up by Rs 300 and above, according to channel players. In 3 kVA and up to 5 kVA UPSes by APC, the prices start from Rs 48,000 and vary as per the backup time.

Meanwhile, for Numeric, the big achievement in the sub 5 kVA space was that it came at par with APC in terms of market share. Numeric, though having a pan India presence, is pretty strong in the south. But last year, it also got a considerable hold on the northern region, coming in direct competition with APC and Emerson. For Numeric, education and government verticals were the growth drivers. Numeric excels in channel management and hence it deepened its relations with its channels partners by means of back end rebates and a promotional scheme called Sell and Gain.

Its been a good year for Microtek tooit doubled its market share from last years 5.9% to 10.4% at the end of FY 08. Meanwhile, Emersons focus was predominantly on the higher end. Despite that, it saw its market share in the sub 5 kVA category almost doubling with capacities from entry-level to the sub 5 kVA range going to consumers and commercial segments. In the low-end range, the ITON series, Emerson has capacities from 600 to 1,000 kVA. Over the year, Emerson concentrated on gaining inroads in the corporate and SOHO segments. It also secured some deals from the government. Channel handholding exercises and channel meets in multiple cities were other activities. The company has a dual sales model: Ingram Micro caters its 3 kVA UPS range, which is its sole distributor. Capacities from 3 kVA to 60 kVA are done through its business partners. Data centers and retail did well for Emerson.

Though WeP launched some innovative range of UPSes, according to IDC data, its market share declined by half, from 11.1% in FY 07 to 5.1% in FY 08. The decline has to do with escalation of cost of UPS components leading to higher ASV. In terms of technology, WeP launched the Double Conversion Isolated High Frequency Boost (DCB) in the UPS space. DCB UPS provide the benefits of the much costlier online technology UPS at a price which is close to the more common line interactive UPS. The company targeted the DCB technology to segments like large and medium enterprises with a branch network spanning semi-urban and rural areas, banks, PSUs, government, education, manufacturing, and trading houses as well as SOHO.

In the sub 5 kVA category, though APC and Numeric were literally on an equal footing, the former was losing ground (owing to high prices) with the latter gaining at its expense especially in the South. Its virtually a cottage industry with numerous small players in pockets like NCR, Pune and Coimbatore, leading to the high proportion in the others category

Meanwhile, Powercom has the distinction of being the only vendor to launch a micro kVA product at 300 kVA capacities. This shows that within the market, vendors are trying to create a niche area. Powercom can shore up more volumes, if it can gain a larger foothold in northern India. The company, predominantly an entry-level UPS player has been strong in the east, west and south.

Regional Players
If we look at the UPS market for regional players, most of them did well by gaining a strong hold in one region. For instance, Champion is one of the leading regional players offering capacities starting form 500 kVA to 3000 kVA in the line interactive segment. Though pricing has always traditionally been an advantage for regional players, with escalation of component costs, they are forced to increase their prices. For more volume sales, Champion forayed into B and C class cities.

Another regional player that made its presence felt last year was Luminous. Despite good products, Luminous did face some problems in meeting demands. And to arrive at a better demand supply equation, Luminous launched a production unit in Himachal Pradesh. In the ongoing year it plans to significantly ramp up its production. Other players in the regional space like Intex and Proview also had good growth.

Outlook
Today, a UPS is seen as a mission critical infrastructure enabler. Hence, apart from the entry-level, the 3 kVA to 5 kVA enterprise deployments were done by most vendors through the solutions approach, where vendors provided various back-up options.

At the entry level the offline UPS technology is the most preferred technology. Typical a offline UPS powers turn on when electricity fails. But with power outages and voltage fluctuations becoming more frequent, the market, even at low-end, is shifting toward line interactive. Meanwhile, online UPS is still a forte of large enterprises, as they go for online UPS configurations. In the future, the market will be a mix of offline, line interactive and online with line interactive eating into offline market.

Shrikanth G
shrikanthg@cybermedia.com

Page(s)   1