Expanding The Pie of Pest Control Services in India
The Basics To Increase Your Business Illustrated With Some Real-Life Examples
As we don’t have information on our industry size, we have to assume the market for pest control services in India. It has been variously estimated between INR 1500 to 1800 crores and, one challenge that exists is deciding whether this market is expanding, shrinking, or remaining stagnant. While we continue our efforts to size Indian pest control, let us explore how we can increase our own business through simple steps, but without eating into the market share of our competitors. That way, we would have contributed to expanding the market size and Indian pest control pie.
Only ways to create a new business: In our industry, the simple ways to create new revenue streams are by the increasing price of our services or catering to previously unmet service needs of the customer or by providing services to a customer not catered to. There is also the possibility of creating new services that customers avail and help expand the PCO’s business. What I have seen in Indian pest control industry is that all the PCO’s are mostly fighting for a piece of the pie that is not expanding (some may even say it is shrinking) with no company creating new customers or new services. When an employee leaves a PCO to start a new company, they bid lower than their previous employer; when this happens over time and across India, the national pie shrinks!
I have three examples from my experience on how each of the approaches to expanding business was used and helped increase the size of the pie for pest control.
Stored pest monitoring services: I started my career as a Food Safety Manager, and while working at an export-oriented food processing company, I set up what was then India’s most extensive pheromone trap monitoring program. Using pheromone traps for insect pests in spices, we would track the presence and the level of adult insects at the warehouses and also processing areas. Corrective action would be initiated when the insect count in any one trap or the average count across all traps exceeded a threshold. The traps we used were imported, and even today, all pheromone traps for stored pests in India are imported.
When I joined the pest control industry in 2000, I introduced this activity as Stored-product Insect Monitoring (SIM) service. A PCO just had to decide which stored insects were present at customer’s premises, estimate the number of traps required, deploy those, and provide weekly counts to customers. Sadly, even two decades later after I introduced a new service or revenue stream, PCO’s either don’t know this service nor do they offer it even when they are aware of it. Pheromone trap monitoring is a straightforward service that involves no pesticides. It can easily be provided as an add-on service, which can generate even more business as one of the actions when trap counts exceed the threshold is to fumigate the infested commodity.
Periodicity of fumigation: When I joined NBHC as head of pest management services in 2007, the prevailing practice in their industry for fumigation was very crude. Indian grain trading companies would have fumigation carried out pre- and post-monsoon to control insect infestation. One of the first things I did in the Warehouse Service Provider (WSP) industry was to schedule fumigation every eight weeks by which any infestation could be controlled. As a result, the number of cycles of fumigation increased, and so too the revenue to the fumigators.
Remember, WSP’s are liable for the stock quality of grain at their warehouses, and the cost of fumigation is meager compared to damage to the grain due to insects. We even used an illustration table for salespersons, which showed that even after fumigating a stack six times a year, the cost incurred would be less than even 1% of the value of the grain being protected.
The WSP segment is a significant lost opportunity for Indian PCO’s. As PCO’s were slow even to understand the opportunity, most WSP’s set up their pest control teams denying PCO’s a share of the fumigation and related pest treatments at organized private warehouses in India. Just think of the revenue from pest protection of 5 million MT of fumigable grains Indian WSP’s handle annually, and you will understand the size of the lost opportunity. My guess is it is the tune of INR 50 crores per annum.
Bird proofing: Some time ago, one of my ex-colleagues, a Key Account Manager, bagged a contract for bird proofing at a brewery. The value of the order was INR 18 lakhs, and this was for netting just one part of the factory. The customer had a nationwide presence and the factory for which we got the order was only one of many. In fact, at the same factory, more requests for netting were given out, increasing the order size from just one location. Bird control, by proofing, is staring at us practically across India. However, a lot of the business is taken away by contractors who are installing fishing nets to cater to customers’ bird proofing requirements. In other cases, no solution is offered by PCO’s with customers continuing to suffer the presence of birds. There is a range of tools that can be deployed against birds ranging from spikes, shock strips, sprays, netting, and even bird repellant gel. However, if you check with a PCO chance are they either are not aware of the options or don’t
In summary, the Indian pest control market is more substantial than what our industry makes it out to be. Even the customers we have are not catered to fully. Then, some customers have never been approached by any PCO at all. Like it is commonly said, “If we continue to do things the way we always did, we will get results that we always got.” Each PCO leader should understand that the market size limitation we perceive is of our creation. Don’t believe your sales team when they tell you opportunities are few or don’t exist. We have to create new opportunities with old customers and create new customers. The Indian pest control services market is far from saturation. It is for you to seize if you are willing.