Consumers take to energy-efficient durable products

Rising power rates has forced consumers to look for energy-efficient electrical appliances. This helps manufacturers, consumers and power companies. Experts say the demand for higher star-rated products are growing at a faster rate than for low-end ones. While for Blue Star, which holds a market share of about 10 per cent in the domestic room AC segment, 33 per cent of its sales come from five-star or more energy-efficient products, for Godrej, 45 per cent of the demand is for such products. Daikin, a Japanese AC major, receives 30 per cent demand for inverter ACs.

According to Kishan Sachdev, managing director of Carrier Midea India and president of the Refrigeration and Air Conditioning Manufacturers' Association (RAMA), 9 per cent of the total number of ACs sold in India are fitted with inverters, compared to four per cent in 2013. Shantanu Dasgupta, VP, corporate affairs and strategy, Asia South, Whirlpool of India, says the trend is shifting towards spilt ACs with built-in inverter. The share of five-star rated ACs now stand at 25 per cent of total 3.8-million domestic AC market, annually.

Kamal Nandi, business head and executive vice-president of Godrej Appliances, said AC prices move up by nearly 10 per cent for every higher star rating but the increased "cost of acquisition" is usually recovered in one-two years. According to Blue Star's internal analysis, the cost of an inverter AC can be recovered in five years. "Since, average life of an AC is at least 10 years, customers clearly have a saving opportunity," B Thiagarajan, executive vice-president at Blue Star Ltd, said.