David Misell, a British inventor, is credited to have built the first ever flashlight in the 1890's. This early device featured a paper tube body, a brass reflector, an incandescent bulb and was powered by three large 'D' batteries.

A gradual shift from brass torches to LED torches and change in consumption pattern from 0.1 watt flashlights to 0.5 watt and 1 watt flashlights is likely to reduce average battery life in a flashlight from 70-80 hours to 20-25 hours. This shift will also increase demand for smaller and more commonly used smaller AA batteries.

Flashlights can be categorised in terms of their body material.

ABS: Acrylonitrile butadiene styrene (ABS) is a common thermoplastic polymer. Its glass transition temperature is approximately 105 °C (221 °F). ABS provides high impact resistance, gloss, toughness and good heat resistance.

Brass: Long lasting and one of the best metal bodies for a flashlight. Brass has been used as a metal for flashlight bodies for many years and is extremely popular with flashlight manufacturers.

Battery and flashlight categories per se have a high dependence on when the monsoon sets in the country. Both these categories do get impacted due to the sentiment regarding the monsoon, as the flashlights are popular in rural areas where farmers use it to inspect their fields as well as used in homes as power supply in rural India is erratic. 

The flashlight market is dominated in India by Eveready Industries with a market share of around 70% of the organised segment, and sells around 25 million units a year. The flashlights market in India is a ~58mn units market with 60% held by the organized sector. Eveready Industries is a market leader with 75% market share of the organized sector in this segment. The industry predominantly comprises LED flashlights (95% of flashlight volumes of Eveready are those of LED flashlights). Flashlight volumes have been flat over the past two years, owing to a weak monsoon and sluggish economy. With monsoon continuing to be weak in the current year, flashlight revenue may decline for industry players.

Most of the lighting industry works on the outsourced model, with large players outsourcing to Chinese manufacturers and in some part to domestic manufacturers.

Growth in the flashlight segment is likely to be moderate due to increasing competition in the unorganized segment partially offset by increase of rural penetration in LED flashlights.

At the same time, there is also a vast unorganised segment that is estimated to be almost equivalent to the size of the organised one. Overall Eveready commands around 40-45% of the total flashlights markets.

Flashlights segment is the major consumer of batteries at around 25% in India compared to just 7% in a developed market like the US. While remote control leads in total battery consumption in India at 40% compared to Toys, games at 18% in the US.

The segments in the flashlights market were traditionally determined by the materials used for the housing segment, namely brass, plastic, and aluminum. Historically, the ‘brass' segment was the most popular among consumers, especially in the rural areas. However, in the recent past, prices of brass flashlights had to be increased manifold due to the cost push of the underlying base metals – zinc and copper until 2014. This was thoroughly resisted by consumers and brass flashlights volumes started de-growing significantly over the last five years.

The demand for flashlights is mainly rural driven which is again dependent on monsoon. As the monsoon during the last three years has been erratic, it has impacted growth of flashlight business.

In a recent development, the organized players introduced the new generation ‘LED' flashlights. The popular name was derived from their usage of LED bulbs as the light source. LED flashlights are also actively being promoted by the organized players due to its inherent advantage of lower battery consumption. Economy range of LED flashlights market is expected to be around Rs 250 to 300 crore market in India.

This development breathed new life into the business and enhanced the customer base. It also improved the prospects of battery manufacturers and led to higher consumption of batteries, bringing stability in battery volumes.

These new generation flashlights witnessed robust sales during the initial two years after their launch in the market. However, the past three years recorded a more traditional rate of growth for the organised segment. This was an expected consolidation on a higher base and also resulted from the influx of look-alike unorganised gray market products.

The LED flashlights now occupy more than 95% of the total volume of products sold by market leader and the only listed company operating in this segment Eveready Batteries. The incandescent bulb flashlights across all segments – brass, aluminum and plastics – account for the balance.

The flashlights organized industry is dominated by Eveready Industries, apart from few organized but unlisted players such as Diamond Torches, Geep, Nippo and Novino. A few other players exist, none of whom have any significant position and no new trend seems to be emerging in this respect.

Chinese imports

West India region is witnessing tough competition to organized players from low-priced Chinese rechargeable flashlights available at Rs 100-150. Low-priced flashlights launched by industry leader Eveready at Rs 150, is expected to gain traction and giving tough competition to cheap Chinese torches.

Dealers/distributors in North and Eastern region are glad with continuous new launches and innovations in the organized battery business. North and East regions continue to grow well for flashlights due to electricity shortage in the region. In Northeastern states like Assam, organized players have a strong brand recall.

An erratic monsoon caused 12% drop in flashlight sales and the battery segment for industry leader Eveready owing to less than normal monsoon coupled with dumping of poor quality products from China and Vietnam.

Opportunities and threats

A vast dormant population (almost 45 million households) of non-users represents a large opportunity for the flashlights market. The urban areas, where flashlights are seldom owned, comprise another specific area of opportunity. Vast sections of urban areas now face periodic power cuts and flashlights provide a viable alternative solution during those times. The category however, faces a continued threat in the form of gray market operations launching lookalike models, usually without payment of taxes and duties. The only way to sidestep this problem is to continue launching new and innovative models.

Consumer up trading will likely happen through innovation with the organized players tapping LED torches and Digi LED torches segment.

The battery and flashlight segments have exhibited flat volumes for the past four years, owing to a sluggish economy. However, considering the likely economic revival and product mix shift from brass to LED flashlights, volume growth should pick up in these segments.

Outlook

Considering there is a vast potential of tapping in to convert non-users to users, a key risk of first time users taking the gray market route remains. Lookalike products continue to remain a threat due to cheaper prices. That will result in organised players losing out on this growth opportunity. This problem needs to be tackled through appropriate product offerings, innovative marketing initiatives and lobbying with the Govt. on anti dumping duties on cheap Chinese imports. In early 2003, anti-dumping duty was imposed on metal torches imported from China by the Govt after an application for such imposition of duty was received from the Delhi-based Sadar Bazar Torch Manufacturers Association. However in the current scenario where brass/aluminium flashlights have been replaced by plastic body LED flashlights and suffer high Chinese imports, the anti dumping duties need to be relooked into.