The domestic refrigerator industry is witnessing a major transition, right from product and design innovations to giving value for money and energy-efficient solutions to consumers with a variety of choices.
According to GFK India’s refrigerator report, the estimated market size in volume of refrigerators in India was estimated to be 103 lakh units (quantity-wise) in 2017. In 2018, it has reached 105 lakh units, which was 101.3 percent of market growth whereas Hitachi’s growth during that year was of 130 percent. In case of over and above 350L capacity, which is Hitachi’s strength, 2017-18 market has increased to 108 percent, and Hitachi surpassed the overall market growth by registering an unprecedented growth of 124 percent.
The penetration of refrigerators is steadily growing in the country. There is a huge scope for brands to revolutionize this space by introducing product innovations focused at semi-urban and rural India. Majority of the demand is still being accounted for mainly by urban areas. This growth can be largely attributed to rising household incomes, improved technologies, rapid urbanization, and environmental changes. In large untapped markets like India, these factors have changed the product and purchase patterns in the last 2-3 decades.
With online retail having a meagre share of a few percentages of total sales in refrigerators, players in the market are increasing their reach in Tier-II and Tier-III cities through an increased number of SKUs in organized retail stores and mom-and-pop stores. Challenges in logistics and transportation are due to poor rural electrification and improper roadways that have slowed down the growth. But with the government’s ambition of full electrification, the demand from rural India is catching the pace.
According to India Refrigerator Market Outlook, 2022, refrigerator sales are expected to grow with a CAGR of more than 5 percent over the next 4 years. The DC (direct cool) segment is poised to grow at a slightly better pace than the FF (frost free) segment. The preference of consumers in semi-urban and rural areas is shifting toward DC models as they occupy lesser space and are available at lower price points. At Hitachi, we are projecting our range to grow more than the overall market growth.
Gradually, the consumer preference is moving toward high-capacity models. Hitachi is promoting premium refrigerator series – Made in Japan (MIJ) – and side-by-side three-door refrigerators. These high-capacity models offer the latest technologies like inverter technology with dual-fan cooling, vacuum insulation panels, intelligent controls, etc. Hitachi has a complete frost-free range with 21 models and 45 SKUs – starting from 253L gross to 722L gross capacity in 2-door, 3-door, 6-door, and bottom-freezer segments.
Indian consumers are now looking beyond cooling. Along with high capacity for a variety of food and beverage storage, the growth of connected homes is pushing the demand for more and smarter features in new-age refrigerators. In the coming future, refrigerator technology is expected to evolve immensely. Eco-friendly gas like R600a is already being used to ensure that refrigerators are low on global warming and ozone-depleting potential, thus ensuring a healthier environment. According to the current trends, consumers are no longer getting swayed by price points; they are now demanding a good-quality product with the latest technology that is worthy of its price.
With changing environmental conditions and growing awareness around sustainable eco-friendly products, refrigerators will also be seen in a new avatar.