Blue Star has recently launched 100 new air conditioners including 40 highly energy efficient inverter split air conditioners. At their Goa launch, VIKANT SAHAY met with the Joint Managing Director of Blue Star Limited, B Thiagarajan to find out more about the air conditioner market.
HERALD: How is the growth in the air conditioner market in India?
B THIAGARAJAN: The AC market in India continues to grow every year and even the issue of demonetisation and GST transition did not make much of an effect on this market. I would put the Compounded Annual Growth Rate (CAGR) at 15 per cent for next five years. This particular year I expect the market to grow at 20 per cent.
HERALD: What could be the reason for this growth?
BT: It is basically because the average annual temperature is going up. Also, it is one of the categories which people would like to buy at the end. People start by buying the mixer grinder then the colour television followed by refrigerator (watch here, people buy the television ahead of the refrigerator). Then they go ahead to buy the washing machine, two wheeler, a car and then finally an air conditioner. This is the pattern of buying we have observed in the market. Air conditioner comes last in the category primarily because of the fear of electricity bills or power consumption charges.
HERALD: What measures have you taken to make an air conditioner power efficient?
BT: In the past ten years and thanks to the energy labeling programme, every two year the energy standards are upgraded and today Indian air conditioners in global standards has reached the highest level in the world in terms of energy efficiency compared with any other country. Therefore, power consumption by air conditioners is almost negligible today. In the year 2000 if you bought an air conditioner and if you are using a five star labeled air conditioner today, the energy consumption compared to that time has come down by 95 per cent. Hence hardly 5 per cent energy is consumed as compared to the year 2000 due to developing technology.
HERALD: What new technology has Blue Star implemented to make a mark in the market?
BT: We have the inverter technology which converts the AC current into DC and is modulating the same for driving the compressor through a micro processor. So compressor is no longer the heart of the system. It is the micro processor now. We have worked with Japanese universities and have employed number of R&D experts from all over the world to develop such technologies. The inverter technology will replace the entire market and it is like an LED television. As of now in India only 30 per cent of air conditioners are equipped with inverter technology and is likely to grow in a big way. We have refrigerants which are green and ozone friendly.
HERALD: How do you see Blue Star growth in the market?
BT: The air conditioner market is likely to grow by 20 per cent in the coming year and our plan is to grow by 30 per cent. We are now ranked number five in India in all ACs put together and if you take inverter technology then we are the number three in the country. We should be able to reach the market share of 12.5 to a current level of 11.5 per cent.
HERALD: How do you see the Goa market?
BT: In Goa about 60,000 air conditioners are sold annually. As against all India market share of Blue Star at 11.5 per cent, in Goa our market share is about eight per cent. Goa is a three star market and since the rate of power is low, people do not buy five star labeled air conditioners. It is a temporary disadvantage. However, this year our team is confident that from 8 per cent we will get at least 10 per cent market share in Goa. We have also kept in mind about making air conditioners which are salinity proof, especially for coastal belt consumers.
