Indian customers no longer want ordinary fans at homes. As all other appliances become ‘smarter’ with a clear focus on premiumisation, customers are aspirational and fan-makers do not want to be left out. With a cost range of Rs 2,500 to as high as Rs 40,000, consumer durables firms want to ensure the premium category caters to customers across income groups.
Indian fans go premium as buyers want an edge
All major white goods makers including Crompton Greaves Consumer Electricals, Havells, Orient Electric as well as smaller players like Atomberg Technologies (Gorilla fan) have launched fans in the higher price segment that not only come with remote controls but also have more decorative value and a powerful motor.
In January 2019, Orient Electric launched a premium ceiling fan which the company said was the world’s slimmest smart fan.
Atul Jain, Senior Vice President & Business Head (fans), Orient Electric said the company has more than 40 percent market share in premium fans and hopes to gain further dominance in the segment. Aspirational customers look for smarter purchases and their new product is expected to create interest among such buyers, he said.
Why premium fans?
Indian buyers want household appliances to not only serve the basic purpose but also add to the décor of the house. Appliance makers have acknowledged the need and are launching relevant products.
According to a new report by Emkay Global Financial Services companies are now focusing on increasing the contribution of premium and decorative fans, as the category is largely penetrated well and incremental replacement demand could drive premiumisation.
Graphics by Ritesh Presswala
Dealers said customers who are buying a second fan for the house usually go for premium models. “For households where individuals cannot afford an air-conditioner, getting a second fan is an option. Here, the key is to go for models that have a much more powerful motor and are also energy efficient even if they come in at 30-40 percent premium,” said the head of the western market at an electronics retailer.
Emkay Research also showed, given the highest penetration, the category will see the highest proportion of replacement demand. Fans should also record the highest premiumisation-linked demand, the report stated.
Customers are also slowly getting more aware of the advantages of getting energy-efficient appliances.
Manoj Meena, Co-founder & CEO, Atomberg Technologies (manufacturer of Gorilla brand of fans) said unlike traditional fans, their products are equipped with an energy-efficient motor that helps every household save up to Rs 2,000 per year on each fan.
The fan market in India today is worth Rs 10,000 crore. The organised market would be close to Rs 7,500 crores and is expected to record compounded annual growth rate (CAGR) of 15 percent over the next five years. Havells is the leader in the premium fans category, as per the Emkay report.
As of today, the market for premium fans (Selling price of Rs 2,500 and above) is Rs 1,500 crores. Meena said this segment of the market is expected to grow at a CAGR of 25 percent over the next five years.
How are premium fans different?
Compared to a regular fan that has a manual regulator, the new-age premium fans not only have remote-controlled speeds but also an LED underlight so that the product can have multi-functional uses.
Take Orient Electric’s Aeroslim fan. The company said it is enabled with Internet-of-Things (IoT) technology that enables users to manage fan speed and modes, reverse rotation and underlight with dimming options via a mobile application.
Similarly, Atomberg’s Gorilla fans not only have the feature of remote-control but also a sleep mode and timer mode that can be pre-set.
Havells, which is one of the largest players in this segment is launching a new range of fans for summer 2019. Among these, is an IoT-based smart fan that can be controlled with a remote, mobile app and Wi‐Fi connectivity, the fan would adjust its speed based on temperature and humidity in the room. The fan would also come with auto-function modes like sleep and breeze.
In the fans segment, Emkay Research stated the organised players control 75 percent and of that four to five players have ~85 percent market share. The majority of the fans demand is met through domestic production.
“Focus on improving product mix will also lead to margin accretion. Incremental competitive intensity in the premium and ultra-premium category is expected to increase from new players as well. As per our dealer checks, LG is launching a range of premium fans (price point >Rs 4,000) with latest technologies.
Meena said the thrust will also be on launching products that can be connected to smart home devices like Amazon Alexa and Google Home. Atomberg is looking to launch such fans in March 2019.