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Bringing Innovation

Bringing Innovation

Water heaters continue to be a niche requirement, with the country’s climate being more tropical and hot for most months of the year.

Water heaters are emerging as technologically advanced and innovative products, and stylishly designed globally. Though the global market is almost saturated, continuous innovation on the part of manufacturers is making a difference. While traditional water heaters were huge in size and consumed high energy, their modern counterparts are compact, energy efficient, and more consumer savvy. As consumers’ preferences on finish, design, energy consumption, and technology are shifting, manufacturers and their design teams are responding with equal alacrity.

Indian Market

The Indian electric water heaters market in 2016–17 is estimated at Rs. 1630 crore, and by volume as 2.97 million in numbers, a 10 percent increase since 2015–16. The electric storage heaters dominate the segment. According to the India Water Heaters Market Outlook 2021, though electric water heaters are currently dominating the market, solar water heaters have also gained prominence among Indian consumers over the past few years and are expected to grab a share of 40 percent by 2021, currently estimated at Rs. 245 crore, and 15 percent of the value of electric water heaters market. Growth in this segment is expected on account of rising awareness among consumers, pertaining to the benefits of solar water heaters both in terms of energy-efficiency and being
eco-friendly. The demand for water heaters has been increasing over the last few years on account of growth in the construction sector and increasing disposable incomes and is expected to reach
Rs. 2880 crore by 2022, which translates to a mere annual increase of 12 percent.

Roughly 30 percent of the household electricity consumption is accounted for by water heaters. Consumers are becoming more aware and conscious of this, hence they look for products that have a good BEE star rating. This trend has ensured that manufacturers invest in R&D and bring out products that are beneficial to the end consumers.

In the solar segment of the water heaters market, the story takes a turn where the market is firmly in the hands of unorganized manufacturers or local manufacturers, thanks to the cheaper Chinese imports. The unorganized players target the price sensitive customers as the basic models they have to offer in the solar segment cost roughly around Rs. 8500 which is almost half the price as compared to the branded ones that go up to Rs. 15000. The established players in the segment are Emmvve, Anu Solar, Tata BP, and V-Guard which has minimal share in the market as compared to the local manufacturers.

Water heaters are strongly affected by seasonality, and are dependent on the weather. They continue to be a niche requirement, with the country’s climate being more tropical and hot for most months of the year. But with winter season setting in, particularly in the Northern and Northeastern regions, the demand for heating appliances is considerably high, resulting in a strong focus on the product by retailers and manufacturers.

As manufacturers look forward to better sales over the next couple of months and gaining market share, they are ramping up their production capacity, devising aggressive marketing strategies, and introducing new products. Online retailing has become an important channel for the sale of retail goods and services. It offers water heaters at relatively low prices, with safe and secure online ordering facilities and 24×7 customer service centers. Heavy discounts and end-of-season sales also contribute largely to the online retail market.

Smart Innovations

Virtually every appliance and solution within the home is being outfitted with a series of connected features, so smart water heaters comes as a logical next step in the shift toward the fully connected home. A water heater can now have Bluetooth and Internet connectivity and interact with smartphones, allowing homeowners more control and contractors easier diagnostic capabilities and some also offer touchscreen operation. The controller works with electric water radiators and gas models equipped with electronic control valves. It is also designed to report energy utilization and other data. Smart water heaters now come equipped with various sensors and options, such as remote temperature adjustment, pattern learning, mechanical self-diagnosis, leak detection, and self-cleaning. Many major manufacturers are joining the smart water heaters market with the latest innovations. There are even smart devices that can be retrofit to an existing water heater to add some smart technology features until it is time to replace the unit.

In Conclusion

Developments in new energy saving technologies, enhanced comfort algorithms, and improved display technology will drive growth. Demographic shifts such as numerous small households and surging disposable income will prove beneficial for replacement demand on a global scale. The consumer is doing more research and engaging more in the selection process. Water heating remains one of the top energy expenses in the home, and homeowners and businesses are looking for smart investments that create value by reducing monthly bills. Consumer preferences have shifted toward demand for high-end devices as a direct result of higher purchasing power and evolving lifestyle. To find those savings, they are asking for more innovative products. With reduced models offered, physically larger tanks, and added cost of units, tankless water heaters have become more attractive. For residential hot water systems, high-efficiency alternate technologies will continue to gain traction. Vendor focus lies on ensuring quality control, improving lead time and productivity, employing eco-friendly materials, and maintaining customer satisfaction. They also focus on M&As to offer innovations and better technologies in their products. Manufacturers are still diligently working to further improve their product lines.

Based on market research conducted by TV Veopar Journal in September 2017.

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