A recent article in the Harvard Business Review reports that India and China need more toilets. The market there is large because both countries have huge populations and many still live in rural or very low-income areas.
Improved toilets are important to fight disease and improve quality of life. Right now there are about 2.8 billion people without access to sanitary toilet systems. Bill Gates knew this, and sponsored a ‘Reinvent the Toilet’ challenge. The winner was a team from the California Institute of Technology who designed a solar-powered toilet. This toilet even generates electricity!
But how much of a boom are we talking about? India, for instance, expects to see some 350-400 million people moving to urban areas in the next three decades. If you presume that 4 people would share one toilet, this could mean that as many as 100 million new toilets are needed, far more if people living in slums are supplied with acceptable, sanitary toilets.
But the demand well exceeds supply. The largest supplier of toilets is Roca (Spain), with Kohler as a distant runner-up. Together they sell 52 million toilets – only about half what India and China will need. HBR notes that many of these toilets are unsuitable for low-income markets, so only about a quarter of the 52 million can be sold to emerging markets. That is a shortfall of about 85 million toilets.
More innovation, more production, and decreased costs are necessary. Advances also need to be made in water usage and toilet paper – both considered to be a waste by environmentalists. Global suppliers must and will step up to take advantage of this huge market opportunity.
There is also a huge shift in demand in emerging countries for other associated industries like plumbing, construction materials, cleaning supplies, and carpeting. Toilets represent the biggest spike in demand currently, but over the next handful of years, the other materials will follow. The demand for these things as well will surely surpass the supply coming out of more advanced economies, demanding that more manufacturers think more globally about product sales and distribution.
What other unexpected indicators of globalization can you think of?