Apart from changing lifestyles, urbanization has led to a change in consumer buying behavior. As urbanization is evolving, everything including phones, watches, cars, and cities are turning smart and increasingly becoming a part of the urbanization wave. Similarly, the water heaters segment is not any different. With increasingly busy lifestyles, instant heating along with other smart features is becoming a requirement apart from other functional aspects of water heaters. Moreover, consumers are becoming more aware of energy efficiency and quality standards that may offer new avenues for the opportunities over the coming years. Another rising trend is the adoption of water heaters in industrial and commercial sectors that are surging and are no longer limited to the residential sector.
According to industry experts, the time and money spent on bathroom interiors and accessories have risen substantially over the last 5 years. The end of the 90s saw a new phase of innovations in bathroom design and accessories as the bathroom began to be seen beyond mere squared and bold lines. Bathrooms were earlier not given the importance as other rooms when it came to design and décor; however today, they are turning into experiential wellness zones. Transforming in response to the ever-changing nature of the consumer, bathrooms are an extension of people’s living spaces and personalities and have undergone a sea change. Now, the same emotion invested in designing the living room or bedroom also resonates with the bathroom.
While buying a water heater, consumers not only look at the aesthetics but also the smart features that it offers along with the impact to the environment.
With the advent of technology, everything we use today is becoming smart, even the cities we live in today. Water heaters are no different and have seen a lot of technological innovations. A combination of highly advanced technology and energy-saving features to deliver personalized hot shower are one of the latest trends in the water heaters industry. Other elements such as Wi-Fi, smart bath logic, auto diagnosis, and eco-function, among , are some of the technology trends that are redefining the water heaters category, which is rapidly moving from low to high penetration, with disposable income in Indian households going up.
Challenges and opportunities
Growth in the construction sector, paired with many households replacing their old heaters owing to surging disposable income, may catapult market growth in the near future. Additionally, improved standard of living, changing consumer preferences and upsurge in consumer awareness pertaining to water heater benefits may drive the market growth even further. Moreover, evolving trends regarding the adoption of safe water heaters coupled with energy efficiency and quality standards may offer new avenues for the opportunities over the coming years. Water heaters used in the country are no longer limited to the residential sector as demand for water heaters in industrial and commercial sectors of the country is also surging.
The penetration of this category is still very low which is ~less than 5 percent. This signifies that this category has the potential to grow immensely. However, electricity shortages and frequent outages are major constraints for higher penetration of electric water heaters, especially in Tier-II and Tier-III towns in India.
Industry outlook for 2020
According to India Water Heaters Market Forecast & Opportunities, 2020, the market for water heaters in India is expected to surpass USD 400 million through 2020. Solar water heaters are the fastest-growing segment in India water heaters market. Further, 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. Tankless category (electric instantaneous water heater) is expected to pick up in metros in the near future.
Approximately 70 percent for electric storage water heaters (ESWH), 30–35 percent for gas instantaneous water heater (GIWH) and 50 percent for solar water heaters (SWH) are organized. The water heaters market is expected to grow at 5–6 percent in next 5 years and the electric water heaters segment will remain a key category with stable growth rate.
Advertising and promotion strategies
The brand has recently bagged the prestigious Superbrands 2019 award. Racold is the only brand in the water heating category to be selected as Superbrands for 2019 after an extensive online consumer voting process. Participation in Superbrands is by invitation only, and is offered to the most outstanding brands in their field. Attaining Superbrands status strengthens a brand’s position, adds prestige, and reassures consumers and suppliers that they are buying the best brand in its category.
The overall position of the brand is to reborn every day with hot water, so basically the role that the brand plays in the consumer’s life it is not just about providing good quality hot water for bathing and cleaning your physical self. In India, bathing is highly related to cleansing rather than cleaning, because a lot of rituals are associated with bathing. As one of the market leaders in the category, the strategy we use is to make a larger connect with the consumers than talking about the features of the product like the tank quality and the heating elements or the physical appearance of the product, among others. This is the whole philosophy and strategy in which we design our communication to connect with the consumer at a more emotive level rather than giving him the physical attributes of the brand.
We will continue to invest both offline and online and connect with the millennial target audience.