Voltas has emerged as the surprise leader in the air conditioner (AC) market, which paradoxically saw the Korean majors lose ground despite record-high temperatures.
LG’s market share dropped from 19.6 per cent in March 2012 to 14.6 per cent in July 2012, Samsung’s plunged from 17.8 per cent in Q1 of 2012 to 9.3 per cent in July 2012, according market data in the GFK Nielsen Retail Audit July 2012.
Voltas, a Tata brand, on the other hand, increased its market share to claim leadership. Its share increased from 15.7 per cent in Q1 of 2011 to 21 per cent in July 2012, according to the audit.
“In our Cooling Products business we grew by 20 per cent in volume, and almost 30 per cent in value during the summer. This growth is attributed to a prolonged summer (though a late starter); aggressive marketing around the “All Weather” proposition, consolidation of our retail footprint in North, and expansion of our footprint in East and South India,” says Pradeep Bakshi, COO, Voltas Unitary Products Business Group (UPBG). The company claims that Voltas UPBG division grew by 83 per cent in June and 20 per cent in Q1 of FY 2013.
According to industry estimates, the AC category has grown by 10 per cent in volume in Q1 of current fiscal. “Major growth drivers have been Voltas and Panasonic,” adds Bakshi.
Japanese brands
Besides the indigenous Indian brand that stood tall, Japanese brands too made hay. While Panasonic claims to have grown 100 per cent during the quarter, Daikin says it grew in excess of 41 per cent.
“We increased our market share by 2 per cent during the quarter in the room air conditioner segment,” says Kanwal Jeet Jawa, Managing Director, Daikin Airconditioning India.
Voltas has been ranked highest among ‘pure AC’ brands in its equity scores. “Brand Equity Index” according to AC Nielsen, reflects an increase from 1.9 to 3.3 for Voltas.
The brand has major leadership in the northern markets, which contribute 45 per cent of all India AC sales. In markets such as Delhi and Bihar, its market share was upwards of 39 per cent, according to the audit.
In the southern markets such as Kerala and Karnataka, where the brand claims to be making rapid inroads, the market share is upwards of 30 per cent. An industry observer notes that LG as an AC brand has drastically dipped in their reach of distribution especially in North and South India. “Further their focus on energy efficient and premium ‘inverter’ segment and their lacklustre marketing proposition around it has found very few takers in India,” he adds.
Saurabh Baisakhia, Business Head, Air Conditioners, LG India, confirmed their focus on split ACs and particularly higher star rated ACs and on value generation and not only volumes. “As a result, LG has improved per unit yield by 10-15 per cent compared with the previous year. But as part of this approach we have lost some volume share in the non-premium segments such as window ACs and low star rating. However, the numbers by GFK cannot be assumed to give a complete picture as it does not adequately represent sales from exclusive brand outlets,” he says.