Samsung India makes strategic bets to strengthen position in the AC segment

In a bid to strengthen its presence in the AC segment, Samsung India is implementing a slew of strategic measures including setting up a separate HVAC (Heating, Ventilation and AC) division, which will house both its residential and commercial AC businesses.

It has also decided to re-enter the non-inverter split AC and Window AC segments to widen its product range while setting up a new unified sales channel for the HVAC division.

The South Korean major is hoping these measures will help the company solidify its position to become one of the top three players in the residential air-conditioner segment in the next two years

Rajeev Bhutani, Senior Vice-President, HVAC Division, Consumer Electronics Business at Samsung India, said: “ The penetration of AC segment in India is very low but the segment has been growing at a CAGR of 15 per cent over the past few years. Growing disposable income, urbanisation, government’s electrification push and rising temperatures are some of the factors that will be driving the growth of this segment especially in the tier-2 and tier-3 markets.”

He added, “We want to become the No.1 player in the Residential AC segment by 2022 and expect to double our sales every year to achieve this goal. We are targeting 100 per cent growth in 2020 and 2021 to reach our objective of becoming number one by 2022.” Bhutani added that while the contribution of the inverter AC has been growing to the overall AC segment, window AC and non-inverter split AC segments will be relevant especially in the tier-1 and tier-2 markets due to the steep price differential between the segments.

Currently, while inverter AC’s now contribute about 60 per cent to the overall residential AC industry, fixed speed AC and Window AC segment command the balance share.

The company’s move to have an integrated business division for commercial and residential air-conditioner will also reflect in its channel strategy. “ We will create a new channel for the HVAC division. Under this strategy, we will open up 300 outlets in 2020 that will serve as expierence centers and offer both residential air conditioners products as well as commercial air-conditioning solutions,” he added.