The air conditioner market in India is expected to reach 9 million units by 2022, implying a robust CAGR of 15%. The growth in the Indian air conditioner market is driven by the early onset of summer, rising penetration of ACs (currently 5-7% as compared to 32-35% global average), higher disposable income, and year-round usage trend, and growing urbanization. Moreover, the growing economy and changing lifestyles have increased the need for air conditioners that offers convenience and comfort. In India, split and window air ACs dominate the air conditioners market. However, the split AC is expected to transition to inverter technology over the next few years. In the long-term, air conditioner sales through online channels are likely to gain traction against the backdrop of a surge in internet penetration across the country.
Split ACs are the most popular product among the Indian customers
India’s AC market is witnessing a rapid increase in the number of split ACs sales as compared to window ACs. As per the RationalStat Analysis, the market share of split ACs has reached over 85% penetration in 2021, reflecting an increase of 13% over the period 2011-2021. Demand for split ACs has risen significantly over the past years in India owing to various benefits provided by them. Benefits associated with the split ACs such as flexibility to install anywhere, reduced noise level, enhanced room aesthetic, availability of a wide variety of models, and flexibility in the capacity sizes have attracted the consumers, acting as pivotal growth factors for the product demand.
Moreover, with the increasing consumers’ awareness levels regarding the price, quality, and value of consumer electronics products, including ACs, there has been a general desire to move up the value chain; the same is reflected in the rising adoption of better-quality products. Regarding air conditioners, this evolution is characterized by the conception of versions that are high on energy efficiency parameters, which has facilitated the demand for split ACs with inverter technology in India in recent years. This shift is acting as a definitive step up in energy efficiency and supports the split air conditioners demand in the country.
North India to continue dominating the Indian air conditioner market space
North Indian states, including Delhi, Haryana, Uttar Pradesh, Punjab, and Rajasthan, among others, dominate the Indian air conditioner market owing to elevated temperatures and high AC penetration rates. In the coming years, temperatures to remain above average in target regions, set to support the growth of air conditioner sales. Western and Central India including states such as Maharashtra, Madhya Pradesh, and Gujarat are expected to remain the promising zones for the air conditioner markets due to soaring temperatures. Coastal states including Kerala, Tamil Nadu, etc. are poised to witness substantial growth rates due to frequent air conditioner replacements as a result of corrosion.
Market Structure and Competition Landscape
Competition in the Indian air conditioner market is expected to remain intense on account of the presence of a large number of domestic and international players. India’s air conditioner market is significantly characterized by brand recognition and thus, observes a presence of premium, popular, and economic brands. Key success factors observed in the Indian air conditioner market include branding/advertisement spend, dealer margins, type of distribution channels, service network, and R&D spending. Key stakeholders involved in manufacturing air conditioners include Voltas, Daikin, LG, Panasonic, Llyod Electric, Blue Star, Hitachi, Samsung, Carrier Midea, Videocon, Electrolux, GREE, Whirlpool, Fujitsu General, Toshiba, and Haier, among others.
Manufacturers are focusing on expanding their delivery and service centers along with launching products with innovative features, including power-saving and auto-clean features. International brands are set to foray into the Indian air conditioner market by launching products.
- In March 2022, France-based electronics brand Thomson, which operates in India through its brand licensee Super Plastronics Pvt Ltd (SPPL), announced to foray into Indian AC market.
- In 2022, RealMe launched the product line of new air conditioners in India.
Key Market Segmentation
RationalStat has segmented the Indian air conditioner market on the basis of AC type, capacity, star ratings, sales channel, end-user, and region:
- By AC Type
- Cassette (ceiling mounted)
- Floor Mounted
- By Capacity
- Less than 1 Ton
- 1 Ton
- 1-1.4 Ton
- 5 Ton
- More than 1.5 Ton
- By Star Ratings
- 1 Star
- 2 Star
- 3 Star
- 4 Star
- 5 Star
- By Sales Channel
- Modern Retail
- Online (e-commerce stores)
- Convenience Stores
- Specialty and Discount Stores
- Conventional Retail (Retail Stores)
- Modern Retail
- By End-User
- Others (Villas, etc.)
- Supermarkets/Hypermarkets/Department Stores
- Others (Shopping Centres, Concert Halls, etc.)
- By Region
- West and Central
RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.
RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:
- Defining the problem by understanding the type of market and data required by the client.
- Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
- Formulating a hypothesis to create market numbers, forecast, influencing factors, and their relevance.
- Evaluating and analyzing the data by referring to data sources utilized and leveraged.
- Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.
- Annual reports, company filings, investor presentations, product catalogs, All India Airconditioning & Refrigeration Association (AIARA), ISHRAE, Refrigeration and Air-conditioning Manufacturers Association (RAMA), Consumer Electronics and Appliances Manufacturers Association (CEAMA), Refrigeration & Air-Conditioning Trades Association Ltd. (RATA), trade fairs, and company documents
- Industry and market-related documents available in the public domain
- Paid database including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, and Thomson Reuters, among others
- Whitepapers, research papers, and industry blogs
Why Buy this Report?
The report is intended for air conditioner manufacturers, compressor manufacturers, refrigerant providers, distribution companies, logistics players, investment firms, government organizations, educational organizations, regulatory agencies, research organizations, and market research firms, among others. The report provides an in-depth analysis of market size, consumption pattern, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.
Frequently Asked Questions (FAQs)
The India Air Conditioner market is expected to grow at a CAGR of over 15% during the forecast period 2022-2028.
North India is dominating the India Air Conditioner market in 2021.
The India Air Conditioner market is estimated at around US$ 4.2 billion in 2021.
Early onset of summer coupled with increasing disposable income are the key drivers in the India Air Conditioner market.
Major companies operating in the India Air Conditioner market include Voltas, Daikin, LG, Panasonic, Llyod Electric, Blue Star, Hitachi, Samsung, Carrier Midea, Videocon, Electrolux, GREES, etc.