South Korean consumer electronics major Samsung is embarking on an aggressive expansion in the air conditioner market in India with an eye to become number one player in the segment over the next three years, according to a senior company official.
The company, which has been selling only select inverter air-conditioners (AC) in India, is widening its product offerings with plans to enter window AC and re-enter non-inverter split AC segment as part of the programme.
Currently, a distant follower behind the likes of Voltas, LG, Hitachi, Blue Star and Haier, Samsung India has created a separate vertical for AC -- heating, ventilation, and air conditioning (HVAC) -- by clubbing together residential AC (RAC) and system AC (B2B) in order to achieve its 2022 target.
"Our objective is to become number one in the RAC segment. By 2022, we will achieve that by doubling our sales every year. Every year, we are targeting 100 per cent growth in 2020 and 2021 to reach our objective of number one by 2022," said Samsung India Senior Vice-President, HVAC division, Consumer Electronics Business, Rajeev Bhutani.
He, however, did not share the company's current volume but as per an industry estimate, Samsung's annual AC sales in India stand at around 3 lakh units.
In order to achieve the target, he said, "We will be launching new product categories in the inverter segment. We will re-enter into the on-off segment, which is a non-inverter in the split AC category. Also, we will enter window ACs. That will complete our product portfolio from a consumer perspective."
Bhutani said after the creation of the AC-focussed "organisation" in the second half of this year between August and September, "we have started to work towards increasing our product addressability to 100 per cent".
He further said the company will also "increase our addressability in the mass inverter segment with different specs" to add to Samsung's existing premium inverter ACs.
Besides, Samsung India is also working to expand the reach of its ACs across the country by leveraging on the channel for its consumer electronics business and creating new exclusive outlets for the HVAC division.
"We will also create a new channel, which will be HVAC exclusive channel in the market. The target for 2020 is to open up 300 new outlets to provide right experience and offer right cooling solutions to consumers," Bhutani said.
The company's consumer electronics goods are currently available across 30,000-35,000 retail outlets, he added.
"Currently, we (HVAC) are operating with 9,000 retailers and with our retail strength, we will be reaching to 14,000 retail outlets as we start in the first quarter of 2020. We will be having complete product line-up to meet consumer and trade requirements across India," Bhutani said.
Moreover, the company will increase field force for installation, after sales service and branded service engineers by "almost 50 per cent and majority of these will be in tier-I and II on account of higher growth expected from these cities", he added.
Bullish on the Indian AC market, Bhutani said the RAC segment is currently a USD 2.6 billion revenue business for the industry and is currently growing by 15 per cent.
"India provides huge opportunity for the room AC business on account of huge lower penetration, which is currently at 5 per cent. In the past four-five years, sales of AC have been growing on account of urbanisation, electrification of more homes, change in living standards and rising temperatures," he said.
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