Refrigerators are no longer merely storage devices for food, but are devices that families use together. They are a central kitchen appliance, and will soon allow people to communicate and not only store food but even purchase and manage it.
The domestic refrigerator is a common, if not ubiquitous, household device throughout much of the world. It is one of the first assets, after a television that a typical low-income household acquires as its affordability increases. Take-up of refrigerators in developing countries has been related to urbanization. Arguably, without the domestic refrigerator, the modern chilled food cold chain is not possible. They have grown to become the most essential food-storage technique.
Refrigerators are going through a revolution. They are getting connected with the aim to be a family smart home hub; some could be opened even without touch; number of doors is increasing from two- to three-doors, four-doors, and now six-doors; and adoption of (internal and external) cameras. Although consumers are replacing their single-door conventional refrigerators and buying the latest multiple-featured refrigerators, they still maintain their distinct threshold for how much they are willing to spend. However, manufacturers and retailers continue to communicate the potential monetary savings from the purchase of more advanced and more energy-efficient models.
The Indian refrigerator industry is on the cusp of a strong and sustainable long-term growth trajectory driven by factors such as higher GDP growth, rising disposable income, increased urbanization, improving rural electrification as well as rising affordability, and growing necessity of white goods. Even in the near term, over the next two to four quarters, consumer spending is likely to rise as the negative sentiment of demonetization fades away, while positive drivers such as payout of Seventh Central Pay Commission, moderate inflation, and low interest rate regime stimulate consumer demand. Impending rollout of GST is likely to be another positive trigger owing to lowering of the tax rate on white goods (currently at 25–27 percent for manufacturers across product categories) which will be passed on to consumers.
Retail volume sales within refrigeration appliances grew by 12.5 percent in 2016 to reach 13.5 million units, estimated at Rs. 21,000 crores. Compared to 2015, monsoon conditions were better in 2016, thus resulting in an increase in consumer spending in rural India and driving demand for refrigeration appliances. Overall, the market share break-up between DC and FF categories is 75:25 in volume terms and 59:41 in value terms.
LG continues to lead the market with a 34 percent market share in volume terms, with Samsung close behind at 26 percent. Whirlpool and Godrej are neck-to-neck with a 13–14 percent share each. Videocon is also aggressive in this segment.
In 2016-17, while Videocon gained momentum with its top-of-the-line Titanium series of frost-free refrigerators, which are equipped with the world’s coldest freezer, offering temperature as low as –30°C, Haier made a statement with the Product of the Year award for its revolutionary new bottom-mounted refrigerator. LG launched its dual fridge, which is capable of 100 percent faster conversion from freezer to fridge in just 3 hours and also announced its newest technology innovation, the new smart inverter compressor that saves energy up to 48 percent by adjusting the cooling power in response to the amount of food loaded into the refrigerator. Hitachi lived up to its marketing mantra Upgrade for Life, signifying addition of upgraded features in each and every product. Godrej R&D teams continued to dazzle the consumer with differentiated products to the consumers and a promise to introduce more exciting products as the season progresses. Whirlpool gained strength from its Intellifresh technology, Samsung emphasized its smart convertible 5-in-1 range and Kelvinator additionally strengthened its position with aggressive presence on Flipkart, Snapdeal, and Amazon India.
The year saw a Rs. 115 crore manufacturing plant at Jhajjar, Haryana, to locally produce refrigerators set up by Panasonic. Intex Technologies forayed into the refrigerator segment in August 2016, while Bosch Home Appliances announced its decision to enter the mass cooling segment with its double-door refrigerators range.
Performances, efficiency, perfect space management, and more man-machine interaction – this is, in short, what characterizes today the big kitchen appliance for excellence, the refrigerator. The refrigerator is a real concentrate of technology and diversified functions, coupled with essential aesthetics and contemporaneous design, implemented with high-tech materials and sophisticated finishes, making it perfectly suitable for all environments.
Innovation, energy efficiency, and incentives are the main ingredients of robust growth that is characterizing the domestic refrigerators market and laying encouraging foundation for 2017. Competition in the market has escalated from price war to technology war, with focus of competition shifting toward the medium- to high-end market. In order to make breakthroughs, many manufacturers have devoted a lot of efforts to R&D.
Players in the industry are now investing a certain percentage of sales on R&D, and are designing products of different models and functions. They are focusing on product transition owing to favorable component pricing coupled with continuous efficiency in the manufacturing process and are focusing on providing more advanced features to consumers. They are expanding their product portfolio beyond their core competencies by enhancing their product and service offerings in order to strengthen their market position. Industry consolidation, mergers, and acquisitions form a major strategic initiative adopted by the industry players. Fluctuating consumer preferences from traditional to technologically advanced equipment are enabling them to offer ground-breaking cooling equipment. Thus, the development prospects for high-efficiency products are promising.
Based on market research conducted by TV Veopar Journal in May 2017.