The import of MRO services (2019-20) by airlines in India stood at USD 1.26B, sourced mainly from countries like France, Sri Lanka, Germany, Jordan, Malaysia, Singapore, Turkey, United Arab Emirates and the USA. The MRO market is estimated to reach around USD 2.8B in the next five years, with a considerable share being procured from domestic MROs.

MRO segment consists of diverse categories of products across verticals like; fastners, electricals, hand tools, safety and security, automotive, hardware, etc.

Spending across manufacturing verticals wary according to the Class of products, Class A constitutes the highest of the spends.

Key industry insights:

1. 70-80% of MRO spend in energy sector covered under service contracts– preference for local, near-site vendors against bigger companies to save costs
2. 40-50% of MRO purchase incidental in chemical companies – immediate availability most important; pricing is secondary
3. For large-size companies across verticals (turnover greater than INR 10K), sustainable sourcing and quality of vendor site essential; established during vendor onboarding
4. For pharmaceutical companies, necessary certification for products like chemicals, etc. are critical

There are 4 main channels for procurement of MRO products namely offline, online, through AMC and software-led platforms. Various customers have certain criteria for selection of the vendor like timely deliveries, financial history of the vendor, methods of sourcing, etc.

Customers come across three major pain points while procuring MRO products; Lead time delays, mismatch in product quality & lack of tools for inventory forecasting. It gets painful for customers as delays in deliveries lead to issues in inventory management because 70-80% orders are fulfilled on time. In addition to that as a lot of customers make bulk purchases, it gets difficult to judge quality through random sampling as many vendors do not have the technical expertise to understand product specifications that leads to a very high mismatch between desired products and delivered products.

In conclusion, there is a great potential of growth in the sector and majorly the pharmaceuticals segment is expected to be the fastest-growing segment during the forecast period. The rising government initiatives and investments for the development of new facilities for the treatment of various diseases related to respiratory and circulatory systems is fueling the growth of this segment across the globe.

The machinery & equipment segment dominated the market in 2020 with over 13% of the market share. The production of the machinery & equipment is among the most competitive segments. The manufacturing of large machines and equipment, which has a huge demand across various industries has fueled the growth of this segment. The developed markets like Europe and North America are among the top manufacturing regions in the globe. The rapid growth of the manufacturing industries across the globe has propelled the market growth in the past years.