Riding on lifestyle changes, the local air-conditioner market has been witnessing a sharp rise in sales during the pandemic-led new normal even as most other luxury products have limped along.
Local AC manufacturers and traders say AC sales have increased by 25-30% more than at any other time in the first three months of this year. And the sales are several times higher compared to last year.
In 2020, AC sales of all brands dropped due to misinformation about Covid-19 as well as a pandemic-led long factory and market closure. But the market rebounded quickly as more and more people installed air-conditioners at home as their home office hours were prolonged.
On top of this, rapid urbanization, changes in weather, an increase in per capita income, growing size of the middle class, affordable AC prices and acceptance of the air conditioning system as a utility rather than a luxury item also augmented the market growth.
Gree is a popular and renowned AC brand in Bangladesh. Gree AC's distributor Electro Mart Limited's Associate Managing Director Nurul Afsar says, global temperature is increasing along with Bangladesh. To get rid of the scorching heat, people are depending on the use of AC. Moreover, present day AC has included advanced features like energy saving and protecting the house from dust and harmful virus and bacteria. This is adding benefit to Ac sales even in the time of the Corona pandemic.
AC market in Bangladesh
Time was when air-conditioners or air-coolers were treated as luxury items in Bangladesh. But people now have accepted air conditioning as an essential as more and more upper-middle class people are having ACs installed at home.
The tendency is more visible in the capital Dhaka. Urban people now cannot think of cars, shops, cinema halls, hotels or restaurants without air-conditioning facilities. The recent inclusion to the have-an-AC-list is the residence as home office, prolonged amid the rise in mercury.
According to AC makers, 4.5 lakh units of ACs were sold in the country in 2019 with a growth of more than 15% per annum. In terms of money, annual sales amounted to more than BDT 5000 crore.
The growing market stumbled in 2020 in light of the Covid-19 outbreak in Bangladesh. Last year, fewer than 3 lakh units of ACs were sold. However, sales this year are expected to surpass 6 lakh units, riding on huge demand.
Even ten years ago, the AC market was completely dependent on imports of international brands such as Gree, General, Hitachi, Panasonic, Singer, Samsung and LG. However, many Bangladeshi manufacturers are having local production for the present market which is why foreign import has reduced to some extent.
Affordable prices are the catalyst
Nowshad Hossain works at the marketing department of ACI Group at a monthly salary of BDT 50,000. He has three family members, including a one-year-old child. He recently bought a locally manufactured AC at Tk40,000.
"The temperature in Dhaka is unbearable. I dared to install an AC as the price is low and has EMI [equated monthly installment] facility.
The air-conditioner will give relief to my child this summer," he added.
Even five years ago, the price of a one-tons AC was more than Tk1 lakh. But there are now Chinese ACs in the market at Tk30,000-35,000. Even locally manufactured one-tons ACs also sell for Tk35,000-40000. Five to six years ago this price was beyond imagination. Due to global warming and significant climate changes AC price is becoming affordable and attracting more consumers in the market.