COVID-19 Impact, Growth, and Trends in the Ceramic Tile Industry

The pandemic has been a hard time for everyone and it was no different for the tiling industry. The industry went through a tough time because everything, from manufacturing to delivery and installation, hit a roadblock and came to a halt.

Due to the pandemic, India, the world’s second-largest ceramic tile market, was one of the worst-affected, given the lack of finished tiles.

Furthermore, the building sector, which is a major market for ceramic tiles, was also hit hard by the COVID-19, which resulted in revenue losses for the ceramic tile industry.

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Moreover, with prices of natural gas used in the ceramic sector rising, tile prices are expected to increase.

The price of natural gas, which is used as a fuel in the ceramic sector, is being raised by gas companies regularly, making it difficult for ceramic industrialists to supply goods to traders who place orders in advance.

The rapid surge in gas costs is hitting profits for the industrialists. Since natural gas is the most significant component in the production of ceramic products, price increases have affected the ceramic sector as a whole.

Due to the obvious price shift, it is expected that roughly 30% of the tiles business would shut down production owing to financial strain.

However, ceramic tiles continue to be the preferred choice and will remain in demand because of the booming real estate market now that the effects of COVID are abating and other factors. Besides, the tile market is only expected to grow in times of come.

Why Does Ceramic Lead?

Ceramic tiles are versatile items with a wide range of uses in different geographies and industries. Various elements are propelling the global market forward.

The most visible trend is the increase in construction activity, which is being fuelled by the increased demand for housing.

Rapid urbanisation and rising disposable incomes play a crucial role in market dynamics in developing economies, such as those in the Middle East and Asia-Pacific.

The building industry in China, Japan and India is booming, thanks to strong expansion in the Asia-Pacific and global markets.

The building sector is being favourably influenced by rising disposable incomes and a large population, among other things, which is propelling the ceramic tile market.

Ceramic tiles with a wide range of design aesthetics are available thanks to improvements in digital printing technology.

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Approximately 80% of the non-resilient flooring market is made up of ceramic tiles. Due to ceramic tiles’ features such as their longevity and crack resistance, ceramic tiles are frequently used in both residential and commercial constructions.

Furthermore, protective coatings on ceramic tiles provide strong water resistance, stain resistance, and easy washing.

What’s Driving The Tile Market?

Growing Urbanisation:

India is rapidly urbanising, with the urban percentage of the population expected to reach over 35% by 2020. Furthermore, by 2030, it is predicted to reach 40%, resulting in about 600 million urban residents. The growth of cities and the movement of people are the primary causes of urbanisation in India.

Housing, road networks, urban transportation, water supply, power-related infrastructures, smart cities, and other forms of urban administration will spur demand for real estate.

The need for residential and commercial buildings in India is increasing as a result of urbanisation, which has spurred rapid expansion in the Indian ceramic tile market.

Due to rising middle-class income levels and stable democracy, India’s urban population is increasing in absolute terms.

Furthermore, every year in India, people migrate to the cities, resulting in the formation of new cities with a larger population with more housing needs.

Rising Investments:

Regardless of the economic downturn, real estate investing has always been considered beneficial, generating favourable results over time.

In March 2021, the value of foreign portfolio investment in the Indian real estate sector was estimated to be $497 million. Godrej Housing Finance (GHF), a venture into the financial services market by the Godrej Group in 2020, aims to develop a long-term and sustainable retail financial services business in India.

As of 2021, Blackstone is one of India’s top private market investors, with a market value of roughly $50 billion in the real estate sector.

India’s housing demand has risen as a result of these increased investments. Increasing housing demand accounts for 70% of the total demand for tiles in India.

Competitive Landscape:

A few big firms currently dominate the tile market share. Mid-size and smaller businesses, on the other hand, are expanding their market presence by gaining new contracts and entering new markets as a result of technology improvement and product innovation.

For example, Orientbell Tiles has been showing a rapid growth in the market with some technologically advanced products, convenient and hassle-free usage, and a user-friendly approach towards the market.

One can also order tiles directly from the website from the comfort of their homes with the help of just a few clicks. It’s good to see mid-sized and small businesses grow and hopefully, the trend doesn’t stop here.

Increased Exports:

Ceramic tile exports from India have surged five-fold since 2018. India was among the top 70 exporters in 2018.

This trend continued in 2019, with Indian exports increasing by another 21% in the first quarter. Natural gas price instability, which accounts for between 15% and 30% of production expenses, as well as ever-increasing transportation costs, hampered India’s manufacturing activity in 2020.

Increased Capex:

By December 2021, some 60 new facilities with a CAPEX of Rs 5,000 crore are scheduled to be up and running, as export demand has climbed to 35-40%, up from 20-25% pre-COVID.

Technology has started to drive the industry in every sense. As we were talking about the Orientbell Tiles earlier, the technologies that they’ve adapted to and come up with are commendable.

For example, a service that they provide, called Quick Look flips the tile buying game on its head. It is a service designed for interior designers, architects, and homeowners.

Customers can choose tiles for their preferred spaces and Quick Look will generate high-quality 3D choices.

But it’s worth noting that they don’t just generate one design; they generate at least three to four designs of each space, with tiles laid out in various patterns and styles to help you visualise, reducing the workload of architects and designers who used to make 3D models and render outputs just to have their clients visualise.

There are many such examples when it comes to technological advancements and it has not only made the tile buying experience more enjoyable, convenient, and hassle-free but has also reduced the room for error.

Technology makes tile buying more of an experience than a tedious process and it is an amazing shift from the traditional shop hopping in a tile market.