Refrigerators nowadays have become a necessity rather than a luxury. It is because of humid and hot weather and increasing disposable incomes of people. Comparing the past times, there were only few players which operated in the Indian refrigerator industry but now there are so many players which has lead to declining cost. However, rural markets still prefer direct cool refrigerators because of their high value for money.
The hot and humid weather conditions have made consumers increasingly concerned about food spoilage and hygiene levels (for cooked food, perishable food items, beverages, and others) and have generated the demand for efficient refrigerators. Moreover penetration level in India is very low only about 27% which causes a greater demand for refrigerators in rural as well urban areas. Even globally, the refrigerator market has been experiencing sustainable growth owing to increased demand for consumer goods, rapid economic growth of countries, increasing demand for refrigerated food products, easy consumer finance, and import- export activities in food and beverage sector.
According to recently published report of Bonafide Research “India Refrigerator Market Overview, 2017-2022”, refrigerator market is divided into two product types: direct cool refrigerators and frost free refrigerators. Direct cool refrigerator segment accounts for 70% of the overall sales volume in India and the rest 30% is frost free. Direct cool segment was growing at a CAGR of more than 13% in value terms between the period FY 2011-12 to FY 2016-17. In India, the rural section covers around 650,000 villages. These villages are inhabited by about 850 million consumers, making up for about 70 percent of the total population, who cater to around half of the country’s GDP. These huge set of consumer base are those who are usually the first time buyers of refrigerator and thus demand direct cool refrigerators due to their low pricing. Also, these rural sections people have much less knowledge about the difference of direct cool and frost free refrigerators; hence they are ready to spend only on products that fulfill their basic requirements. There are still so many villages in India where electricity is not there even after 70 years of independence whereas some of the villages get electricity for some hours in a day. Even in semi-urban areas and few cities, people face frequent power cut problems. However with central government planning to invest in rural electrification, demand for refrigerators will witness a great hike. In parallel to the economic growth of the country, India’s demographic profile has also undergone characteristic evolution.
Apart from above mentioned drivers, availability is also a most important factor that affects the demand of any product in India. Innovative retail marketing initiatives such as exchange programs, bundled offers, attractive discounts, freebies and extended warranty services are fuelling consumer spending. The rapid proliferation of e-commerce and e-tail has contributed to a higher penetration of refrigerators in urban and semi-urban areas. With online buying for home appliances becoming extremely popular, this sector is looking upward. For single door and lesser capacity frost free refrigerators, companies would mainly focus on tier-II and tier-III cities through distributor channel. For bigger capacity frost-free refrigerators, companies are focusing on exclusive brand shops and P4 distribution through modern trade local chain stores in urban areas and metros.
Major companies operating in the refrigerator market of India are Samsung India Electronics Private Limited, LG Electronics India Limited, Godrej & Boyce Manufacturing Company Limited, Whirlpool of India Limited and Videocon Industries Limited.