The Indian air-conditioner (AC) market is undergoing a metamorphosis. The market is now moving towards split ACs.
Five years ago, window ACs dominated the market with a share of 70 per cent. With the changing market dynamics and consumer requirements, however, the demand for split ACs has increased. The share of split portion of the AC pie has gone up to 70 per cent now. The share of window ACs has slid to 30 per cent.
During 2011, nearly 31 lakh units were sold. Out of which, eight lakh units were window ACs and the balance split ACs. “The demand for window ACs is clearly coming down,” according to C. P. Mukundan Menon, Vice-President (Room Air-conditioners Division), Blue Star Ltd.
The price difference between split and window ACs is narrowing down. Even though a split AC is costly at least by Rs.7,000, customers still preferred it for its aesthetic look, colour choice, low noise, multiple filters and the quality of air-conditioning.
Interestingly, Blue Star, too, is slowly reducing its R&D (research and development) expenditure on the window AC, says Mr. Menon. Since the demand for window ACs are coming down, the company prefers to improve the quality and aesthetic look of split ACs and increase the R&D spend on this segment, he adds.
“Many rural customers are also averse to go in for window ACs in their homes,” Mr. Mukundan points out. Their aversion stems from worries over the safety aspects in fixing an air-conditioner in a window. “They fear that widow ACs could lead to thefts. Window ACs could prove an easy access point for burglars gain access to their homes,” he says. Nevertheless, demand for window ACs is still coming in from consumers living in apartments in urban areas, where the builders provide separate opening on the wall of the building.
Anticipating de-growth in the window AC segment, Samsung had announced it decision to completely phase out window ACs from its portfolio.
According to Mahesh Krishnan, Vice-President (Home Appliance), Samsung India, it is a matter of time before window ACs made a total exit from the Indian market. In 2011, split ACs accounted for 85 per cent of Samsung's AC sales.
