Air conditioners: India
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Sales, 2004-14; 2014: Voltas is no. 1
Pankaj Doval, December 06 2014
Voltas topples LG to be No. 1 in AC market
As per 2014, Tatas-owned Voltas has taken the top slot in the Indian air conditioner (AC) market, overtaking Korean white goods giant LG that has dominated the business for over a decade. Latest data from market research firm GfK Nielsen Retail Audit showed that Voltas had a shade over 20% of the pie in September, based on sales at multi-brand and exclusive brand outlets. This was marginally ahead of LG's market share of 19.9%. This is perhaps the first time in recent years Voltas has taken the pole position across the AC segment. However, for the first half of the financial year (AprilSeptember 2014-15), LG continues to lead with a share of 20.5%. Voltas follows with a share of 18.9%. Samsung, the other big player in the AC market, is a distant third. The brand, which has exited the windows AC category , had a share of 12.8% in September and finished the first half with a share of 13.7%, the data showed. This would perhaps be one of the few consumer categories where either of the Korean chaebols are not at the top, considering their popularity among Indian buyers.
The AC market accounts for sales of 3.2 million units annually but has been witnessing tepid growth over the last two years. The penetration of ACs stands at 3-4% in the Indian market. LG said it is working towards protecting its market share leadership.
“Today there are more than 50 brands trying to sell their ACs (more than 70 brands are registered for star-rating labelling at Bureau of Energy Efficiency).With multiple players joining the product categories, our primary objective remains to sustain our leadership position and strengthen our business share across chan nels,“ said Saurabh Baisakhia, business head for ACs at LG India.
The worrying part for the Korean MNCs is also the fact that Voltas already leads in the big-volume multi-brand outlet, which is believed to account for 80-85% of AC industry volumes. Pradeep Bakshi, president and COO of Voltas, said the company's increased penetration in the country has helped the brand capture higher volumes and presence. “This has been an outcome of our ever-increasing reach in distribution, a distinct brand positioning based on consumer insights... and investments in after-sales service.“
Samsung said its exit from the window AC category may have brought down its overall share in the segment.“Samsung exited the window AC category around the end of 2011 and decided to operate only in the split AC segment as that was a growing market.Since then, our market share in the split AC segment has only been growing,“ a company spokesperson said.
Apart from increasing its reach across the country, Voltas has also been aggressive in attracting top talent and poaching from rivals.
2015-17: rise in sales; 2018: mild- summer depresses sales
Pankaj Doval, Freak weather shrinks AC sales in some states, May 22, 2018: The Times of India
From: Pankaj Doval, Freak weather shrinks AC sales in some states, May 22, 2018: The Times of India
AC makers are sweating it out as freak weather conditions and frequent thunderstorms across several states have kept searing temperatures at bay, leading to lower footfall at showrooms and sluggish sales.
Demand in March-May — peak season for AC sales — has remained weak. According to industry officials, sales are 10-15% lower than last year and a revival looks tough, considering monsoon is set to arrive before time .
The uncharacteristic weather has made the situation tough, said Rahul Tayal, director (strategic business and marketing) at LG India. “Industry volumes have been impacted. The heat wave is missing in north India and in parts of south India.”
Gaurav Sah, business head for ACs at Panasonic India, said, “A weak summer has been the primary reason for low offtake in AC market. Pre-season stocking due to change in energy efficiency rating further impacted the inventory.” He, however, added that Panasonic has registered growth in value terms.
Around 55 lakh ACs were sold in India in 2017, which was 18% higher than 2016. An industry executive said, “AC companies get nearly 60% of sales during this time, which is usually a bumper period.”
States such as Delhi, Rajasthan and Uttar Pradesh have seen frequent bouts of thunderstorms and light rains.
Another executive said, “There has not been a continuous summer because of frequent thunderstorms and other weather phenomenon. States such as Punjab, Delhi-NCR region, UP, Madhya Pradesh, Chhattisgarh and Rajasthan are impacted. In south, there have been intermittent rains in Tamil Nadu and Kerala. This is not good for sales.”
Voltas, which leads the AC market, said companies are shifting focus to other regions that are not touched by adverse weather conditions. “Brands having an extensive national footprint are focusing on markets like central and western India, where the heat now seems to be picking up,” a spokesperson at the Tata-group company said. The slow offtake has triggered discounts, offers and freebies.
