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Room Air Conditioners Market in India, 2017

Room Air Conditioners Market in India, 2017

The Room Air Conditioners (RAC) Market in India, 2017 provides an outlook of the RAC industry, emerging trends in usage of technology, key regional trends and factors driving the market. The Indian economy is currently witnessing an upswing due to increased economic activities; rising household incomes and therefore enhanced purchasing power have moved products from the earlier luxury category to being essential today. Climate change has also played its part. Room Air Conditioners, an erstwhile luxury product is now becoming an essential product. Current penetration levels of RACs in India are low when compared to other major South Asian countries. This scope of growth is enticing major brands to focus on the India market. Inverter ACs with cost saving advantages are likely to grow at the highest CAGR followed by split ACs. Window ACs, on the other hand are no longer products of high focus with market size falling to 2% by 2022.

This Industry docket offers relevant competitive, regional and product insights and strategic pointers to enable informed decision-making.


  • Frost & Sullivan-Introduction
  • Scope & Limitations
  • India Economic Overview
    • One of the world's fastest growing economies, India's increased economic activities & large population size provide ample opportunities for RAC suppliers
    • Increase in individual incomes and improving purchase power will aid in higher sales of products like RACs that were once considered a luxury product
  • Global RAC Market
    • Global demand for air conditioners is rising due to rapid demand from emerging countries and focus on energy efficiency in developed economies
    • China and Japan are mature markets; companies have shifted focus toward India due to its low penetration levels and high adoption rate
    • Higher edge over its Asian counterparts with low penetration levels: high growth opportunity aided by favorable demography & macroeconomic factors
  • Indian RAC Market Analysis
    • The future remains promising: RACs to grow at an estimated double digit growth rate of 12-13%
    • However, due to expected adoption of Higher Value RACs, the value increase is pegged at about 15-16% CAGR
    • Increase in disposable income, urbanization and easy consumer financing are expected to drive growth for RACs in India
    • Due to low penetration in the country, new demand for RACs is expected to continuously increase… backed by increase in disposable incomes
    • Inverter RAC to continue to have increasing adoption due to their distinct energy efficiency advantage... 3 of every 4 RACs expected to be of this kind by 2023
    • The residential sector will continue to remain the dominant user-sector for RACs
    • Dependability on imports (components), high cost of energy efficient RACs & increasing environment regulations are key growth challenges…need to be addressed
  • Regional Analysis
    • North and South dominate with cumulative market share of 70%
    • Window ACs that were prevalent even in urban areas of Delhi and Mumbai are now gradually being replaced by Split / Inverter ACs
    • Rajasthan, Haryana, Tamil Nadu, Kerala, Maharashtra and Andhra Pradesh are key markets with combined value of INR 47,000 Mn
  • Competition Assessment
    • Highly fragmented with varied set of players - global, indigenous and importers - selling a wide range of products in the market
    • Voltas and LG front runners due to their presence in other electronics and appliances segments; also have a legacy presence in India
    • Inverter technology and eco-friendly refrigerants have been core focus over the past year; technological upgrade to continue over the forecast timeframe
  • Mega Trends and their Impact
    • Rapid urbanization rate and a growing Gen Y population will dictate consumer dynamics and purchase behavior
    • Value-for-money to remain a key factor among the middle class population who will form a dominant purchase cluster in the coming years
  • The Future
    • Evolution from a luxury product to a household need; market is ripe for technological upgrades
    • With the industry showing a higher preference for technology, companies will focus more on revamping their product portfolios and marketing strategies
    • Technology will play a vital role in product penetration, adoption and differentiation
  • Decision Marker's Spotlight-Advisory
    • Establish strong brand association through vigorous marketing and focus on growing distribution network across the country for increased penetration
    • Decision makers need to target specific locations with alternative revenue model strategies to remain profitable in the long term
  • Annexure-Our Services
    • Maximize opportunities from existing products and markets; systematically explore new products, markets, including inorganic Opportunities
    • Our Growth Consulting Canvas

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