Blue Star is targeting the sale of 100,000 smart AC (air-conditioner) units in FY25, a big jump over the 5,000 it sold last year. With this, the company hopes to grow its market share to 15% in FY25 from its current market share of around 13.7%.
B Thiagarajan, managing director, Blue Star, said increasing disposable income of the middle-income group and the low penetration of air conditioners at the household level in India are expected to drive the demand growth of ACs in the Indian market. “The penetration level of ACs among Indian households is below 7%. Additionally, 90% of those who buy ACs are first-time buyers. Meanwhile, 65% to 68% of the fresh demand is coming from tier-3, 4 and 5 towns. Over 50% of the buyers are buying using consumer finance,” he said.
Thiagarajan said Blue Star is expected to cross the Rs 10,000-crore revenue mark in FY24.
While launching a new range of air conditioners in premium, flagship and classic (affordable) range, he said, “Around 70% of the air conditioners sold in India are 3-star ACs, which is why we expect the major growth coming from the affordable range, as a majority of our customers are first-time customers from the cities and towns other than tier-1 and tier-2.”
Commenting on the commercial and residential demand, Thiagarajan said, “The residential segment of the AC market in India is around 2.5X of the commercial segment and the commercial demand is coming through metro stations, infrastructure projects and other commercial buildings like restaurants and coffee shops. Both of the segments are growing in India and demand will come from both segments in the coming years.”
“India is the fastest-growing market for air conditioners. By 2040, India will surpass China, which captures more than 50% of the global market. Currently, the global market size for ACs is at around 200 million units, with India standing at 10 million units, compared to China, which is manufacturing around 110 million units ( including domestic market size of around 80 million units).”
He added, “The use of ACs in the Indian market is very different from other markets like the US and European countries. Unlike western countries, in India, the air conditioning is not necessary throughout the year. This is why the majority of the residential customers go for 3-star ACs while the commercial customers go for more premium products with better power usage and more technological advancements as they need year-long usage.”