Trends in cement marketing

Sai Prakash, Senior Vice-President, Marketing, The India Cements Ltd, Hyderabad

Taking cue from the global trends, cement marketing in India is also undergoing a gradual metamorphosis. The exponential growth in the number of cities and the emerging growth in the potential of rural markets are leading towards the change.

Urban markets
In the metropolitan cities as well as B-class cities, aspects like the space for storage of building materials, traffic constraints, ecological issues, labour, etc. have become crucial factors.

There is now a shift to usage of ready-mix concrete (RMC) and this will increase progressively. In fact, even the individual house builders (IHB) are shifting towards RMC. Due to ecological issues and other factors, there is a shift towards using artificial sand instead of natural sand. Usage of RMC is the offshoot of the above factors as well as the emphasis on quality concrete and speed of construction. In major cities, application of low cost housing precast technology is also emerging gradually, replacing the brick walls and concrete slabs.

Retail shopping has also has undergone a shift. Customers prefer to shop cement and all other building materials under one roof. In the modern age, there is a growing preference for convenient shopping in a bid to save effort and time. We are also heading towards multi- product home stores, wherein all the materials required for building a house are available under one roof.

Design mix is an emerging concept, not only among large projects but also among mid-size builders and contractors. Therefore, having the technical expertise and infrastructure in large consumption centers has become a necessity. Design mix is a concept wherein all the building materials are tested and the concrete is developed on the site through technical expertise to a specific strength.

Development hubs have become points of sale. Purchase of cement and building materials has polarised to the development areas and the market place for building materials has moved away from the city centres. Majority of the sale takes place in these development hubs. Factors driving the shift are increasing cost of transportation, space constraints for storage and the buyers preference for shopping convenience.

Rural markets
Earlier, there were centres wherein all the villages would converge and buy cement and building materials. Now, the trend is driving towards every village emerging as a self-sufficient unit in terms of availability of cement and building materials. It is very essential that one establishes a network in all the villages for effective penetration into the market. The awareness of the rural customer is very high because of the information flow through electronic and outdoor media.

With all these emerging trends, it is imperative for increasing our focus on the changing scenario. Brand building has also become important and it will continue to gain prominence as the customer will make his purchase with a clear brand preference rather than depending on the channel. E-commerce and online trading are also growing fast in India with some companies using their websites for selling cement.

Cement market
India is producing about 280 mt of cement per annum, whereas China tops the world market producing about 2,480 mtpa. This only shows the high growth potential in India being an emerging market.

Currently, the per capita consumption of cement in India is 191 kg as against 1,581 kg in China, 353 kg in Brazil and 402 kg in Russia. The global average per capital consumption is 536 kg.

With the growing thrust on infrastructure development, urbanisation and housing, potential for cement consumption is very high. In the near future, we will see a progressive growth in consumption of cement in urban and rural markets of India.

World cement production