Consumer Durables major LG India sold as many as one million inverter air-conditioners in the January-June period this year clocking a growth of nearly 50 per cent compared to last year. This was driven by unprecedented pent-up demand after two consecutive washed out summer seasons due to the pandemic waves.
The South Korean major was one of the first companies to bet big on the segment by making a complete transition to manufacturing inverter air-conditioners in 2016 in India.
Deepak Bansal, VP, Home Appliances & Air-Conditioner, LG Electronics India told BusinessLine, that the company garnered revenues of about ₹4,000 crore from the air-conditioner segment this year. “ We saw unprecedented growth and saw good traction for air-conditioners this year. We have seen a significant first-mover advantage due to our strategy back in 2016 to completely switch to inverter ACs. We have sold one million inverter air-conditioners in the first half of 2022 clocking a growth of 50 per cent over last year,” Bansal explained. Last year, the company sold about 7.5 lakh units of air-conditioners.
In 2016, share of the inverter AC s in the overall market was a mere 12 per cent but it has grown to about 80 per cent. “ We have also strengthened our market leadership and now have a share of about 21 per cent in the overall AC segment and about 26 per cent in the inverter AC segment,” he added.
Growth up despite supply chain issues
The overall AC industry witnessed a growth of about 30 per cent this summer season despite challenges of inflationary pressures as well global supply-chain issues. “ In anticipation of this demand, we ensured to secure raw-materials much in advance to manage our supplies for the season. We also saw strong offtake of 5 star and 4 star inverter ACs with growing consumer awareness around energy efficiency,” Bansal stated.
Responding to the impact of inflationary pressures on the overall home appliance segment, Bansal said, “ Just like the industry, we also felt the heat of inflationary pressures in terms of the low-end segment such as direct-cool refrigerators and semi-automatic washing machines. However, we have overcome these challenges through our premiumisation strategy. The less price-sensitive consumers are upgrading to premium products. We remain cautiously optimistic and expect to continue to see growth in the second half of the year for the overall home appliance segment.”
Asked if further price hikes are on the anvil, Bansal said that the company is in a wait and watch mode. “ We have seen some softening of raw material costs in the past few weeks. However, there are pressures of dollar appreciation too. We are assessing the situation every fortnight,” he added.
Recently, LG India was among 15 companies that have been selected as beneficiaries under the government’s production-linked incentive scheme in the white goods sector.