The Asia-Pacific (APAC) water meter market is at an important crossroads. The market has seen a fall in unit prices and meter replacement rates in recent years due to improvements in meter manufacturing and maintenance processes. However, negative pricing trends have failed to elicit a commensurate increase in metering adoption by utilities in the region. The limited greenfield opportunities and falling replacement revenues have resulted in a sluggish market that is expected to see a modest compound annual growth rate (CAGR) of 3.5% between 2016 and 2022.
The reason traditional bulk sales models haven’t found traction is in large part due to the weak financial status of the region’s water utilities. Water utilities in the region, especially those in Southeast Asia, have been chronically underfunded by government bodies and private investors, making them unable to foot the upfront capital costs of large metering rollouts. The situation is further worsened by the fact that many countries have more pressing developmental needs, and most countries in the region lack the expertise and trained human capital necessary to implement advanced metering projects.
The growth focus in the region can best be described as disjointed. While the region, as a whole, has acknowledged the need to reduce non-revenue water (NRW) and labor costs, and improve customer engagement in water management, there is a lack of consensus among countries and utilities regarding the way forward towards this goal. Given these circumstances, market participants will have to devise new strategies and business models that will enable them to increase market penetration and improve revenue.
Despite the less-than-ideal market outlook, Frost & Sullivan finds that there’s more to the APAC water meter market than meets the eye. Frost & Sullivans, in its recent research study ‘Water Meter Market in Asia-Pacific, Forecast to 2022,’ reveals that high-growth opportunities still exist in this market.
The APAC market is very complex and is influenced by a wide variety of country-scale macroeconomic factors, and utility- and consumer-scale microeconomic factors. Success in this market will, therefore, hinge on the ability of market participants to identify critical markets in the region and create targeted strategies for market capitalization. For example, Frost & Sullivan predicts that a switch from a product model to a service model will be essential to penetrate developing markets, such as Vietnam and the Philippines. This will take the form of a metering-as-a-service (MaaS) or Meter Data-as-a-Service model and is expected to enable cash-strapped utilities to kick start new metering projects by lowering the cost ceiling.
Finally, the market’s lethargy is also expected to tide over in the long term, as the pace of smartening increases in the region. The smartening of electric utilities is already a reality in developed countries such as Japan, Australia, and Singapore. The process of smartening is expected to create robust IOT infrastructure in these countries, enabling water utilities to derive significant costs saving and achieve quicker start-up times for smart meter networks. The completion and validation of pioneering projects in Singapore and Japan are expected to be the turning point for the market.
Overall, market participants in the APAC water meter market should engage in careful scrutiny and even more cautious planning. The region has very low levels of metering penetration and offers companies immense growth potential in the long term. Innovation in metering technologies, marketing strategies, and business models will distinguish market participants from market leaders.
