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“Source:- IBEF”
Godrej Appliances plans to enter into the air-cooler segment, in line with its strategy to expand its cooling product portfolio and expand the brands’ penetration in smaller towns and rural region. The company is targeting a market share of 15 per cent in this category in the next five years.

Mr Kamal Nandi, Executive Vice-President and Business Head, Godrej Appliances, said, “After prices of air-conditioners have increased due to the tightening of energy efficiency norms, a section of first-time buyers is seeking more affordable solutions and downtrading to air-coolers. We believe the air-cooler category will continue to see strong demand in the coming years.”

The prices of entry-level AC have increased by Rs 5,000-6,000 (US$ 71.54- 85.84) because of the tightening of energy efficiency norms, leading to an expensive proposition for first-time buyers.

“It is also a logical extension of our expertise in the cooling solutions space and we think we can add a lot of value to the segment,” he added. The factors supporting the growth of the segment, beside affordability are urbanisation, rising temperatures and pollution levels, said Mr Nandi.

The air-cooler segment is expected to grow at a CAGR of 20 per cent by 2022 as compared to a growth of 17 per cent in the past.

Mr Sanjeev Jain, National Sales Head, Godrej Appliances, said, “In the first year, we expect to sell about one lakh units of air- coolers and garner a market share of about 4 per cent. In the next five years, we aim to gain a market share of 15 per cent in the segment.”

The company also plans to sell its air- cooler range in small appliance stores channel, asides leveraging on its existing retail distribution network, modern trade stores and e-commerce.

The company for now, will rely on third-party manufacturer, for manufacturing this range of air-cooler, in line with the existing industry practices. “As the air-cooler business scales up, we will look at manufacturing these products on our own in the next three years,” Mr Nandi added.

The company is offering a differentiated product proposition to consumers by providing inverter technology in air- coolers and deliver cooling more efficiently with higher power savings.

Mr Nandi added, “We are witnessing early signs of demand for air-conditioners in the southern region. We anticipate the AC sector to witness a growth in excess of 20 per cent this summer season.”