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Blue Star to target commercial refrigeration products, water purifiers

Blue Star commercial refrigeration

Blue Star is focusing on commercial refrigeration products and water purifiers as the next growth driver. The company is planning to double both the business in the next two years. The company plans to venture in the Rs 9,000-15,000 segment of water purifiers.

India: Blue Star, India’s second largest domestic air-conditioner maker is focusing on commercial refrigeration products and water purifiers segment as the next growth driver as it is aims to double both the business in the next two years.

Blue Star is all set to venture into water purifiers in the Rs 9,000-15,000 segment which makes up for 65% of the total market and expand its reach in the commercial refrigeration products.

The Joint MD of Blue Star, in an interview claimed that the company plans to foray in the UV segment, which has the largest market share and launch commercial water purifiers by the next three months. The company currently operates in premium RO water purifiers and is among the largest brand sold online. He further added that the market for commercial refrigeration will show robust growth owning to the increasing demand for processed food and ice cream. Moreover, the general stores are modernizing themselves, which is a major driver for the market.  

The current worth of Blue Star’s commercial refrigeration business is Rs 600 crore. It is aiming for the 10% of the Rs 2800 crore electric water purifier market by 2020. The room air-conditioner market accounts for over one-third share of total revenue. The company has also recently forayed into air-purifiers and air-coolers.

However, Voltas, a Tata-owned air-conditioner maker, is planning to foray into refrigerator, washing machine and microwave oven market. Blue Star on the other hand, has no plans for further diversification. The company plans to focus on establishing its presence in water purifiers and commercial refrigeration before expanding its product portfolio.

In the room air-conditioners segment, Blue Star is planning on growing its market share from 11.5% to 12.5% by the end of 2018 and will invest around Rs 55 crore on advertising and marketing as compared. It also plans to increase the number of stores from 150 to 200 stores in the next fiscal year.

According to TechSci Research, In India, more than 85% of the people living in rural areas consume groundwater for drinking purposes, as per the Central Ground Water Board of India. However, water in various regions of India is contaminated with different impurities, which makes it unsafe for consumption. Consequently, demand for water purifiers across the country is witnessing an increase, and this trend is expected to continue over the course of next decade. Deteriorating municipal water quality, increasing health consciousness among consumers coupled with expanding middle class are boosting demand for water purifiers in the country. Increasing urbanization and industrialization is resulting in uncontrolled pollution of water bodies across the country, thereby generating huge demand for water purifiers in the residential segment. In addition, rapidly dwindling water supply, especially in various Tier-I and Tier-ii cities, due to mismanagement of water resources including over-pumping and pollution is further contributing to the market growth.

According to the recently published report by TechSci Research, India Water Purifiers Market By Technology (UV, RO & Gravity), By Sales Channel (Direct Vs. Retail), By Region, Competition Forecast and Opportunities, 2012 – 2026”, the air conditioners market in India is anticipated to cross US$ 6 Billion by the end of 2021. Light commercial air conditioners segment dominated the country’s air conditioners market in 2015, and the segment is anticipated to maintain its dominance over the next five years as well, owing to their various advantages such as energy efficiency, lower running cost, easy availability and integration of latest technologies. Southern states in India generates the highest revenue from air conditioners in the country, followed by northern states. Few of the leading players operating in India air conditioners market includes Voltas, LG, Daikin, Samsung, Blue Star and Hitachi, among others.

According to TechSci Research, with a population of over a billion, India is one of the major developing countries with huge middle-class population base and rising per capita income. On the back of expanding fleet size of passenger cars and commercial vehicles, market for automotive air conditioning & refrigeration in India registered growth at a CAGR of 5.36%, during 2011-2015. In addition, rapidly growing demand for processed fruits & vegetables, meat & fish, dairy products and beverages in the country, in conjugation with rising urban population and changing consumption habits of consumers are few of the major factors expected to fuel demand for automotive air conditioning and refrigeration units in India during the forecast period. On the back of extensive use of air conditioners in automobiles, especially in passenger cars, automotive air conditioning segment emerged as a major contributor to India automotive air conditioning & refrigeration market in 2015, followed by automotive refrigeration segment.

According to the recently published report by TechSci Research, “India Automotive Air Conditioning & Refrigeration Market, By Vehicle Type (PC, LCV, Bus & HCV), By Tonnage Capacity (<18K Btu, 18K-40K Btu & >40K Btu), By Application (Dairy Products, Meat & Fish, etc.), Competition Forecast & Opportunities, 2011-2021”, market for automotive air conditioning and refrigeration in India is anticipated to grow at a CAGR of 9.98%, during 2016–2021. This growth in the market can be attributed to increasing foreign direct investments in automotive sector and growing production of medium & heavy commercial vehicles in the country. Moreover, government has allowed 100% FDI (Foreign Direct Investment) through automatic route to develop its cold chain sector, which also includes automotive refrigeration. Subros Ltd., a leading supplier of automotive air conditioners to Maruti Udyog Ltd (MUL) and Tata Motors, dominated India automotive air conditioning market, in 2015.

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