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The air conditioning (AC) market size is estimated to grow at a CAGR of 2.87% between 2022 and 2027. The market size is forecast to increase by USD 19.65 billion. The growth of the market depends on several factors, including rising in residential construction activity, product innovation leading to portfolio extension and product premiumization, and increasing demand for inverter air conditioners.
This air conditioning (AC) market report extensively covers market segmentation by product (splits, chillers, airside, and others), distribution channel (offline and online), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing demand for inverter air conditioners is notably driving the market growth, although factors such as rising energy consumption may impede the market growth. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing demand for inverter air conditioners is notably driving market growth. The newest technology available for air conditioners is inverter technology. When compared to other conventional air conditioners, the technology is intended to save over 35–45% of electricity. The technology was created in Japan and is highly sought after by the refrigeration and air conditioning industries. Based on the temperature of the room, the system modifies the refrigerant's flow rate. When the heat is lower, the technology decreases the flow rate and vice versa. Moreover, the compressor is also not shut off by this technology.
Traditional air conditioners' regular motors require up to four times more energy to start up. However, the variable-speed motors used in these inverter technologies require less power to start up. Solar PV air conditioners work best with inverter technology. PV panels and the inverter used with them are both small in size. Vendors have also added additional features, such as sleep state technology, which uses a sensor to detect when users are about to fall asleep and adjusts the temperature for their comfort. Thus, the increasing demand for inverter air conditioners to save energy will drive the growth of the global air conditioning (AC) market during the forecast period.
Increased adoption of omnichannel distribution and multichannel marketing is an emerging trend in market growth. Residential users' preference for online shopping for home goods, including air conditioning products, has grown significantly over the past few years. The market has been stimulated by the expansion of the online retail sales channel and the use of multichannel business models. Several suppliers, including Midea, sell their goods both offline and online. Moreover, the products also have greater visibility due to the online channel. This, along with the accessibility of a broad product selection, helps to fuel the expansion of the online retail sector.
The success of online retailing can be attributed to expanding the customer base and reducing the cost of inventory management. Despite having a smaller share of the global market, the online segment is predicted to grow more quickly than the offline segment. Home appliance sales online are expanding as a result of improved Internet connectivity, expanding use of mobile Internet devices, and growing consumer awareness. Additionally, due to quicker doorstep delivery and 24/7 secure e-transactions, online shopping is also convenient. This shortens the lineup for billing and the point of sale (POS) in physical retail stores. Furthermore, it makes getting from the POS to one's house less difficult. Thus, these factors will boost the growth of the global air conditioning (AC) industry during the forecast period.
The rising energy consumption is a major challenge impeding the market growth. Among all the appliances used in residential apartments, air conditioners are the ones that use the most energy. The appliance's rising energy consumption in homes makes it harder to use the product throughout the day. For optimal performance and temperature control, air conditioners also need regular maintenance. However, because maintenance agreements have been broken and services have been prolonged unreasonably, there has been widespread customer dissatisfaction in the market.
Furthermore, market vendors do not closely monitor indirect service providers, which can seriously damage the vendor's reputation as a brand. In order to combat this, manufacturers must choose suppliers who offer ongoing customer support, which will help them achieve operational excellence. Thus, these factors will hinder the growth of the global air conditioning (AC) industry during the forecast period.
The air conditioning (AC) industry analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Air Conditioning Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
LG Electronics Inc. - The company offers technology and consumer electronics such as home appliance and air solutions, home entertainment, vehicle component solutions, and business solutions. The company's key offerings include air conditioning, such as AI dual inverter air conditioners.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market size growth by the splits segment will be significant during the forecast period. The segment is growing as energy-efficient and stylish split air conditioners are replacing window units. To meet the rising demand from customers, suppliers like Samsung have stopped making window air conditioners in favor of split air conditioners. Due to their effectiveness, inverter-based splits are also becoming more popular.
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The splits segment was valued at USD 97.04 billion in 2017 and continued to grow until 2021. Due to their ease of installation, simultaneous heating and cooling effects, accurate temperature control, and energy efficiency, split air conditioners are preferred by most people over traditional window air conditioners. On a wooden frame in the window or on the wall, window air conditioners are mounted. As a result, installing window ACs requires a large workforce, including carpenters, masons, and AC technicians. However, split air conditioners are simple to maintain and don't require a wooden frame to be installed. These advantages are driving up demand for split air conditioners. Additionally, split air conditioners are quieter than window air conditioners because the compressor and fan are built into the outdoor unit. While split air conditioners' outdoor units are usually positioned in a shaded, airy area, which facilitates good airflow in the room, window air conditioners are occasionally exposed to direct sunlight. Thus, due to the abovementioned factors, the demand for split ACs is increasing, which in turn will drive the growth of the global air conditioning (AC) market during the forecast period.
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APAC is estimated to contribute 44% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The demand for pricey home appliances like refrigerators and air conditioners is rising as disposable income rises in nations like Vietnam, China, and India. The demand for comfort is also growing along with income, which is fueling the demand for air conditioners. The primary factor behind the rise in household air conditioner sales is the migration of air conditioners from bedrooms to living rooms. Vendors are expanding their product lines to include more efficient air conditioners in response to the region's price-conscious consumers. Nearly 80% of the APAC market is made up of China and Japan. Furthermore, India is also anticipated to grow rapidly due to urbanization and rising disposable incomes in the nation during the forecast period.
In 2020, the outbreak of COVID-19 adversely impacted regional market growth. However, mass vaccination drives and the resumption of supply chain operations of air conditioning products helped the market gain momentum in 2021 and 2022. Digitization of business processes and adoption of online distribution channels by vendors will further help the market grow during the forecast period. Moreover, governments across the region are expected to invest in smart cities, which is expected to drive the growth of the regional market during the forecast period. All such factors will fuel the air conditioning (AC) market growth over the anticipated period.
The air conditioning (AC) market analysis report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the global air conditioning market as a part of the global household appliances market within the global household durables industry. The parent global household appliances market covers revenue generated by manufacturers of electric household appliances and related products. Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
Air Conditioning Market Scope |
|
Report Coverage |
Details |
Page number |
182 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 2.87% |
Market growth 2023-2027 |
USD 19.65 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
1.64 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 44% |
Key countries |
US, China, Japan, South Korea, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
AB Electrolux, Blue Star Ltd., Daikin Industries Ltd., DeLonghi Appliances S.r.l., Emerson Electric Co., Fujitsu Ltd., Haier Smart Home Co. Ltd., Hitachi Ltd., Honeywell International Inc., Johnson Controls International Plc, LG Electronics Inc., MIDEA Group, Mitsubishi Electric Corp., Panasonic Holdings Corp., Samsung Electronics Co. Ltd., Trane Technologies Plc, Transform Holdco LLC, Toshiba Corp., Voltas Ltd., and Whirlpool Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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