It started out as a solution to provide pure drinking water at a low cost to the masses in India. But along the way, Swach, dubbed the Nano of the water purifier segment, has ended up becoming a cheap water purifier for urban India even though Tata Chemicals has come out with cheaper versions of Swach as well. These low-cost versions can be used in conjunction with earthen matkas commonly found in rural households.

Sabaleel Nandy, head-water purifier business at Tata Chemicals told Financial Chronicle, “Currently, around 35 per cent of our sales come from rural areas. We hope to reach out to 200 million households, which do not have access to safe drinking water.”

Launched in January 2011 across 11 states, the company plans to sell five million units of Tata Swach in the next three years and introduce the product in other developing nations across Africa, Latin America and South East Asia over the next few years.

According to Nandy the penetration of water purifiers is less than one per cent in rural India and less than 10 per cent in urban India.

There is so much latent potential in urban markets that the company needs to build distribution and outreach and generate awareness necessary to convert potential into sales in urban India first, he said.

“When penetration levels are low, there is requirement of more and more players. Creating awareness for hygiene among the rural and urban people is the biggest challenge for this segment,” said Nandy.

The company claims that the purifier delivers safe drinking water at a price of Re 1 per day for a five-member family. The household water purifier requires no electricity or running water for its operations, unlike conventional RO (reverse osmosis) based water purifiers.

“A water purifier is always perceived as a luxury in kitchens and not a necessity. A television, for instance, always has a priority over a water purifier. The higher awareness level and education has helped urban population to switch over to water purifiers. That is not the case in rural areas,” said Mahesh Gupta, chairman with Kent RO Systems.

“You do not need water purifiers in rural areas where you are already engaged with very basic needs of life,” Gupta added. In fact, even in urban markets low-cost water purifiers have limited distribution through organised retail and most consumer durable stores don’t sell these units.

Some feel prices need to be tweaked for rural markets. Harish Bijoor, CEO at Harish Bijoor Consults, said, “In rural areas, water is always considered as a natural resource which is meant to be free. Rural folks tend to be a little chary about paying even Rs 500 for a water purifier. Companies like Tata Chemicals need to break the price barrier to tap the rural market.”

Eureka Forbes, which is one of the pioneers in the water purification space in India, is trying a different model for tapping the rural opportunity. This is based on extremely low price points as low as 25 paise for a pouch.

“A person in rural India is used to paying on a daily basis. For this, we need to work towards a rural community model. We have just started our rural business with this model where people can buy drinking water for price points like 25 paise and a rupee," said Marzin R Shroff, senior vice-president at Eureka Forbes.