Expanding Interest Develops the Latin Am...
Posted in Electronics by Adolf on Dec 14,2021 1595
Once upon a time, air conditioners were considered as a luxury appliance. However, now with each passing year, the earth is becoming warmer, which is only making the living conditions in hot and humid areas all the more unbearable. While looking at the overall climate conditions, the need for cooling has not only become a necessity, but also a means for survival.
The merciless effects of climate change in India have broken all records, where the temperatures during summer especially in the northern region have easily crossed the 50 degree Celsius mark. With no signs of stopping, the hot-spells of the season are making the air conditioner an essential feature in almost every Indian home.
Besides the hot climatic season that stands dominant for most part of the year, there are several other reasons that are favourably pushing the market growth, such as rise in disposable incomes, changing lifestyles, affordability and easy accessibility of the cooling appliances. The air conditioner market in India is evolving in leaps and bounds.
Air conditioning systems are becoming prevalent everywhere, from homes, work spaces, shopping and entertainment complexes to private and public transportation too. People are also becoming conscious about cleanliness and uncontaminated air. Moreover, the growing tendency towards comfort and ease of living is expected to keep the air conditioner market in India budding.
Air Conditioner Market Size in India
Technical advancements such as cost-effective equipment and decrease in prices of components have fuelled the growth of the air conditioner (AC) market. High energy consumption and fall in electricity prices are the major challenges. The market was valued at INR293.37 billion in FY 2021. It is expected to reach INR 991.57 billion in FY 2027, expanding at a CAGR of ~24.30% during the FY 2022 – FY 2027 period.
The Air Conditioner market in India is categorized into four segments – split-type (wall mounted), window-type, cassette (ceiling-mounted), and tower (floor-mounted) air conditioners. The split-type AC segment was valued at INR124.24 billion in FY 2021. It is anticipated to reach INR473.47 billion in FY 2027, expanding at a CAGR of ~26.79% during the FY 2022 – FY 2027 period. Owing to increased income and rapid urbanization, the demand for split ACs has picked up. In FY 2021, the window-type AC segment was valued at INR112.51 billion. It is expected to reach INR142.79 billion in FY 2027, expanding at a CAGR of ~4.43% during the forecast period. Following the second wave, the preference for window AC increased among the middle class because of its affordability.
In FY 2021, the cassette (ceiling-mounted) AC segment was valued at INR 18.34 billion. It is estimated to reach INR154.19 billion in FY 2027, expanding at a CAGR of ~42.69% during the forecast period. Although these ACs are energy- and space-efficient, they are not ideal for multi-storey households. The tower AC segment held revenue of INR38.29 billion in FY 2021. It is expected to reach INR221.12 billion FY 2027, expanding at a CAGR of ~35.38% during the forecast period. The demand for tower ACs from the household sector is limited. They sell in the commercial sector because of their portability and also large area is required for its installation.
Owing to evolving customer preferences, major players such as Voltas Limited, Havells India Limited, and Blue Star Limited made huge strides in technological advancements. Innovations such as ubiquitous sensor networks and copper condensers with anti-corrosive hydrophilic blue fins will improve the efficiency of ACs.
Impact of COVID-19
Due to the global outbreak of COVID-19 in 2020 followed by nationwide lockdown, the air conditioner market was highly affected travel restrictions, workforce shortages, disruptions in world trade, and bottleneck in logistics impacted the supply chains of companies. Top players such as Voltas, Daikin, Blue Star, Panasonic, and Haier registered a drop of almost 75% in sales volumes between April and May, 2021 collectively.
Almost 70% of sales take place between March and June. This year, sales plummeted because nearly all stores were closed due to lockdowns imposed across states in view of the second wave. The market gained momentum in October during the festive season because of market players’ collaborations with major online and offline retail partners such as Amazon and Reliance Digital. They helped to attracts customers through attractive offers.