Backed by product innovations, home-grown Voltas, a Tata Group company, has surpassed its Korean rivals in the domestic air conditioning market.
According to a recent market study by GFK Nielsen, Voltas has emerged as the market leader with a 20.6% market share in the air conditioning space in August 2012, followed by LG Electronics India with 15% and Samsung Electronics with a 12% market share.
Voltas, which had a 15.7% market share in first quarter of FY11, has witnessed a drop in market share in Q4 FY12 to 14.9%, but regained its position with a 21% market share in July 2012.
Interestingly, LG, which was the market leader with 28.8% market share in Q1 FY11 slipped 15% in August 2012, according to GFK Nielsen data. Samsung, on the other hand, has slipped from a 21.4% market share in the AC market in Q1FY11 to 12% in August 2012, as per the GFK Neilsen data.
“In the Cooling Products segment, we grew by 20% in volume, and almost 30% in value during the summer. This growth is attributed to a prolonged summer [though a late starter]; aggressive marketing of all-weather ACs that was introduced about six months back, consolidation of our retail footprint in North, and expansion in East and South India," said Pradeep Bakshi, chief operating officer, Voltas Unitary Products Business Group. Voltas current has about 6,000 consumer touchpoints across the country.
Bakshi targets atleast 15% volume growth in FY13, and the company will continue to bank on the all-weather ACs to maintain its leadership in the home cooling segment, said Bakshi. However, it could consider introducing new categories next fiscal, he added.
Bakshi is hopeful that tier-II and tier-III cities will become growth drivers, contributing about 50% to the company’s annual sales, as metro markets are getting saturated day by day. “The up-country market is picking up very fast," he added.
The company gets about 85% from retail and distribution sales, and the remaining 15% comes from the institutional sales.
Prices of ACs have been raised two to three times by about 15-20% last fiscal. “I don’t see any immediate price hikes. However, there could be some before the next summer," said Bakshi.