AC maker Blue Star feels 30% sales to come from e-commerce

By 2018, half of room ACs sold in country would be inverter ACs

Air conditioning and commercial refrigeration major Blue Star feels more than 30 per cent of all air conditioners in the country would be sold through the online channel in the next three to four years.

“As of now, five per cent of all room air conditioners (ACs) are sold on the e-commerce format. Our share is slightly higher than the industry average at six per cent. But in the next three to four years, the share of the e-commerce channel to total room AC sales can cross 30 per cent”, said  B Thiagarajan, joint managing director, Blue Star Ltd.

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The firm is also upbeat on the inverter AC segment. “By 2018, half of the room ACs sold in the country would be inverter ACs and by 2020, we hope that every AC sold in the country would be an inverter AC”, Thiagarajan said.

Blue Star aims to expand its room AC sales by 25 per cent in this fiscal and grab 12 per cent of the market share. Presently, the company owns 10.5 per cent share in the room AC market and trails leading brands like Voltas, LG, Samsung and Hitachi.

The company has lined up an investment of Rs 30 crore on new product development as well as its research and design initiatives in this fiscal. Also, it will spend Rs 40 crore on brand promotion through a series of television commercials, advertisements in mainstream dailies and hoardings. Blue Star would enhance its digital presence on the social media as well since most of its buyers are from the highest socio economic category and actively surf the internet.

With commercial air-conditioning segment decelerating, Blue Star would focus on the room AC segment and expand its capacity.

“In the commercial air conditioning segment, we are still the market leader with 28 per cent share. But this segment is witnessing a terrible de-growth. Office space consumption is not growing and malls across the country are not doing well. There is also lack of growth in metro rail and airports. The only bright spots are educational and healthcare institutions.”

Blue Star is setting up two new facilities at Jammu and Sri City (Andhra Pradesh) at a cost of Rs 215 crore. The two new manufacturing units are expected to be ready in 18 months. In room ACs, Blue Star has a capacity of 0.4 million units. With the commissioning of two new facilities, the capacity can go up to 1.1 million units per year.