The humble ceiling fan is undergoing a transformation in the country. Indian consumers are increasingly opting for more aesthetically appealing fans. At the same time, fans are becoming more energy efficient with the mandatory BEE norms kicking in from January 1. Fan makers are therefore betting big on a revival in growth momentum backed by stronger replacement demand and scorching summer temperatures, after the industry witnessed sluggish volume growth in the past two years.
Rakesh Khanna, MD and CEO, Orient Electric believes the fans category is expected to witness stronger growth momentum not just in this summer season but for the next few years. “There is a shift in consumer behavior as they want their fans to reflect their lifestyle. There was a time when consumers were not very involved in the buying process. Now, ceiling fans have become an integral part of the overall room decor. The new-age consumer also wants to opt for energy-efficient products. So, the mandatory star labeling for fans is expected to further boost the replacement cycle on top of the other factors driving regular demand,” he added.
Muted volume growth
The fans category, which is pegged in the ₹8,000-10,000 crore range, has seen muted volume growth in the past two years. This was due to inflationary pressures and destocking in the market due to the transition from non-star rated to star-rated fans. in.
Ravinder Singh Negi, COO, Bajaj Electricals said, “The last two years industry’s volume growth was not in line with value growth due to various factors. But this year we have already begun seeing green shoots in terms of the demand surge. February was hotter than usual and there has been good growth. Nearly 45 per cent of the annual sales happen during the April-June period. With the BEE norms coming in and expectations of a longer and harsher summer, we believe the upgrade and renovation cycle will be much stronger in this season. “
The category, which has been witnessing volume growth in mid-single digits over the years is expected to garner double-digit growth in 2023. Brands such as Orient Electric and Bajaj Electricals are aiming for even higher growth rates than industry growth levels this summer season. Players are busy launching a wider range of fans while also sharpening their focus on premium products including the BLDC fans.
“With demand for energy-efficient fans and better aesthetics expected to be on the rise, Havells in FY24, will continue to focus on growing our fans portfolio in all categories. The onus is now on the industry to communicate the benefits of energy-efficient fans vs cost, thus helping consumers make more informed decisions,” said Saurabh Sinha, Vice President, Havells India.
The average selling price has gone up due to BEE norms. “The industry has not fully passed on the higher costs entailed due to the transition to star-labelled fans and some additional price hikes will be taken as the season progresses,” a senior executive added.