A rather interesting fact about the construction industry is most of the demand for building and construction raw material such as cement, bricks, and roof tiles etc is fulfilled through dealers and distributors and not retail stores. Read on to know about distributorship opportunities in the construction material business.
A good infrastructure is important for the faster economic development and as it alleviates poverty and improves standards of living for the common people of the nation. To build a huge infrastructure, the building and construction industry is of grave importance. So, regardless of the government, we can see a lot of construction work happening throughout the year. This is why building and construction industry is believed to be a recession-proof industry.
In India, building and construction industry is one of the major contributors towards the nation’s GDP and provides employment to more than 33 million people. And a rather interesting fact about the industry is most of the demand for building and construction raw material such as cement, bricks, and roof tiles etc is fulfilled through dealers and distributors and not retail stores. So, a building and construction material distribution business can be a lucrative opportunity for those who seek entrepreneurship in this segment.
The construction industry in India is quite bigger in size than other countries in the world. It is one of the largest contributors to the economic activity, after agriculture sector in India. As per recent reports, the industry expects a growth rate of 7-8% per annum till the year 2024. Recent reports also suggests that the industry remains highly fragmented but the share of the organised players is witnessing unprecedented growth, accounting for about 50% of the industry. The 12-15 largest contractors account for an estimated 15-20% of the market.
The growth catalyst of this industry can be the increasing push of government towards smart real-estate and urban infrastructure. As the present levels of urban infrastructure are not ready to meet the demands of the growing urban population that seek housing facilities, the government is largely focussing on making infrastructure like railways, roadways and housing facilities, which is further giving rise to the boom in the construction industry.
Distributorship Opportunities in Construction Material Industry
There may be different levels of distribution in the construction material industry. The levels differ as the target user differs. For instance, if the manufacturer has to sell its products to construction companies, then there is no marketing mediator and it will be a case of direct distribution. This level of distribution is the largest in cement distribution and smallest in roof tile distribution.
While talking about residential construction, most of the builders and the house owners rely upon contractors. Unless you sell direct, the distributors are incredibly important as they will be the link between the contractor and the builder/house-owners. Usually, the contractors are the gatekeeper who decides what product is used in the construction and most of the contractors approach the distributors to get the raw materials rather than approaching the brands in particular. So, the distribution chain for the construction material industry is largely dealership and distributorship based. Hence, the industry offers a lucrative business opportunity for dealers and distributors.
Here is some of the basic information about the building and construction material distributorship that might interest entrepreneurs interested in the field:
Investment Requirement: Rs 50,000 to Rs 2 lakhs
Space requirement: 200-1000 sq ft.
Distributorship Level: City Level