The penetration rate of refrigerators in India is still very low when compared to other emerging markets or developed countries.  

The refrigerator has over the years transitioned from a luxury item to an indispensable appliance, and yet one which needs to make a statement in the modern home. 

The Indian refrigerator market in H1 2016 has shown excellent sales. The market saw an upswing in February, and in most areas March 2016 saw phenomenal sales. The April-May-June 2016 quarter is poised to record the highest sales in a quarter in the last five years. 

In 2015-16, the refrigerator market grew by 14 percent in volume terms, and by 26 percent in value terms in 2015 to reach 11.5 million units and Rs.21,500 crore respectively. 

The longer summers in most parts of the country are leading to volume growth, whereas increased disposable incomes are resulting in consumers purchasing higher-value products, which positively influences higher value growth as well. The southern region of India leads the refrigerator market in sales volume followed by the northern, western, and eastern regions. 

The frost-free segment is gaining massive popularity and momentum over the direct-cool. However, the direct-cool segment continues to dominate with 76 percent market share.

The penetration rate of refrigerators in India is still very low when compared to other emerging markets or developed countries. The demand for refrigerators in India is mainly in urban areas, which account for a 75 percent share. Available features, energy star rating, warranty, quality, space, price, cleaning-ease functionality, and styling are currently major influential factors while purchasing a refrigerator. 

The number of imported offerings in the premium-end across all categories has seen steady increase. The enabling factor is Free Trade Agreements that India has entered with Thailand, South Korea, and ASEAN, and brands with manufacturing base there are able to bring in such products with relative ease.

Global Scenario

Growth in the number of environmentally conscious consumers, in addition to technical upgradation and innovations for more energy-efficient appliances, is driving the growth of the global refrigerator market. The demand for refrigerators in most of the developing countries is growing in double digits. The increasing disposable income is one of the major factors driving the growth of white goods industry in the developing countries. 

The improvement in energy efficiencies, along with environment-friendly and clean technological developments in white goods products, is driving the growth of the refrigerator market in the developed countries of North America and Europe. The energy cost in western European countries has increased over the years. This has resulted in the replacement of old and conventional home appliances with energy-efficient and environment-friendly ones. The new grade of domestic refrigerators with energy label is driving the market growth. Moreover, the supportive government regulation and funding for the adoption of clean and energy-efficient domestic appliances in the member countries of European Union is further expected to increase the growth of the market.

Technology Trends

Refrigerators

Technology today is empowering consumers more than ever before. Manufacturers are constantly developing innovative and futuristic products. Simplicity and ease-of-use trump technological innovation – and today’s consumers want products that solve real, everyday problems with ease. What has always been a tall insulated box with one or several doors, the refrigerator has become one of the most indispensable appliances in the kitchen.

Consumer demand for fresher and safer food is driving manufacturers to invest in automatic, non-invasive refrigeration units. Rising household income, improving living standards, rapid urbanization, increasing number of nuclear families, large untapped market, and environmental changes are major growth drivers for the refrigerator industry. Manufacturers are launching models with advanced features and innovative designs. With the rising per capita income levels and easy consumer finance the refrigerator market is expected to grow in future. 

Refrigerators have undergone significant technological innovations in the past few years. Along with numerous optional amenities, refrigerators are also available in many styles, for example, a built-in all refrigerator is typically paired with a built-in all freezer. This option allows maximum fresh-food storage and offers up to 38 cubic-feet of combined refrigerator and freezer space; the side-by-side refrigerator model is manufactured with the fresh-food compartment on the right and the frozen-food compartment next to it; the bottom-freezer style is configured with a drawer or door for frozen food beneath the fresh-food compartment. Bottom-mounted refrigerators offer more space and adapt quickly in storing large items. As the condenser is placed near the ground, the temperature is comparatively cooler than in top-mounted refrigerators.

Consumers expect food to taste its best. So manufacturers are offering customizable settings to keep food stored at the ideal temperature. Refrigerators can include a dual evaporator that keeps fresh-food and freezer-food in completely separate environments, with drier air circulating through the freezer compartment and more humidity in the fresh-food compartment. This keeps food fresher for long. There is a whole new genre of refrigerators that are available in the form of refrigerated cabinets and drawers. These can look a lot like drawer dishwashers and are designed to go under the counter.

Smart refrigerators. Manufacturers are already shifting focus from low-profit, low-growth traditional (non-smart) products toward the emerging high-margin, revenue-oriented smart connected appliances. Strong growth is expected for the smart connected home appliances market in the next five years, according to IHS Inc. 

There are three critical factors that will affect smart appliances adoption – energy management initiatives such as dynamic pricing, government initiatives, and structure of utilities; standards for interoperability; and other marketplace dynamics covering product pricing, retail environment, competitive landscape, the approaches adopted by suppliers, and overall interest in smart home technology. In the next two to three years, the smart home technology market is expected to consolidate, and by 2018 there will be just a couple of connectivity platforms, operating systems, and a small number of technology-oriented appliances companies dominating the market. 

Smart technology makes it possible to sync a refrigerator to a call-center through a smart phone to help diagnose and solve any problem the refrigerator may have, quickly and correctly.

The energy requirement per household has continually increased due to the aggrandized use of home appliances, creating a demand-supply gap for power companies. In this scenario, various products under smart appliances category would facilitate real-time communication, enabling the user to operate the appliance at lower frequencies or shift the operating time to off-peak period. Smart home appliances offer revolutionary features to consumers such as convenience, enhanced security, and improved energy efficiency. Smart home appliances are next-generation home appliances that can receive, process, and transmit information and communicate with devices such as smartphones, tablets, and laptops to enable the user get real-time information on the appliances along with remote access and control.

IoT as a Key Enabler

Refrigerators

Internet of Things (IoT) will be a massive investment trend in near future. Doors, windows, thermostats, and refrigerators will soon connect to the Internet. They will be able to send and receive data and communicate with the consumer. Consumers want their devices to use data, analytics, and sensors to work on their own. However, if the devices are unable to automate themselves, voice-controlled settings and the ability to give instructions via text message are next best scenarios from a consumer point of view.

IoT is a rapidly evolving wave of technology. More and more technologies are integrated with it and it is fast developing into a network where absolutely everything is connected. It is becoming a force that is driving innovation and new opportunities by bringing every object, consumer, and activity into the digital realm.

An important sign of the fundamental significance of the IoT concept is that major information and communication technology vendors are now strategically developing IoT offerings. Companies that sit at the heart of the telecom, networking, industrial infrastructure, enterprise system, and cloud computing sectors are now offering platforms to facilitate the broader economy’s transformation to pervasive connectivity. Over the past five years, fragmented efforts to connect machines and sensors in industry-specific ways are now coalescing into a comprehensive vision of connectivity permeating the global physical environment.

Imagine the smart refrigerator that keeps track of what one buys and eats and when it is time to order new groceries. As soon as the consumer runs out of food, it will order a fresh supply from the supermarket – after having checked with the electronic pill, so that the refrigerator knows which products promote optimal health.

Managing the quality and inventory of perishable goods – a significant way to reduce costs – has been one of the biggest challenges in the industry for decades. The modern smart refrigerators are managed through a secure wireless connection to the end-point, allowing retailers to easily add real-time temperature monitoring. 

By building smart refrigerators that can track consumption, deliver offers, and manage purchasing and replenishment, manufacturers can extract subsidies from companies in order to tap into data and the revenue stream of each consumer. With a connected refrigerator, advertisers will pay to promote products to the consumer on the refrigerator’s screen, who will then use a related subscription-based service to buy the products. What makes promotion like this appealing to advertisers is that it is data-driven, personalized, and proactive. Some refrigerators have a standard phone app that connects to the refrigerators via Wi-Fi and can alert consumer to a power outage or let her know when the water filter needs changing.

While the smart refrigerator brings convenience and new features to consumers, it is also interesting to consider what consumers could provide to brands, retailers, and each other through machine learning and artificial intelligence. In future, appliances that will succeed for sure include those that adapt green technologies, are energy efficient, cost effective, and make a lifestyle statement.

Based on market research conducted by TV Veopar Journal in May 2016.

 

 


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