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The water heater market is estimated to grow at a CAGR of 5.5% between 2022 and 2027. The size of the market is forecast to increase by USD 6,981.04 million. The growth of the market depends on several factors, including increasing demand for tankless water heaters, increasing demand from commercial end-user segment, and government initiatives promoting energy-efficient heating solutions.
This report extensively covers market segmentation by end-user (residential, commercial, and industrial), distribution channel (specialty stores, department stores hypermarkets and supermarkets, online retailers, and others), type (electric, gas, and solar), and geography (APAC, North America, Europe, South America, and Middle East and Africa). 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 tankless water heaters is notably driving the market growth, although factors such as high installation and maintenance costs may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Water Heater Market Driver
The increasing demand for tankless water heaters is a key factor driving the growth of the global water heater market. End-users are shifting toward energy-efficient models of water heaters, which help reduce maintenance and utility costs. Vendors in the market are launching electric versions of instantons or tankless water heaters, which can achieve higher energy efficiency than gas water heaters and provide heated water in a shorter duration than conventional water heaters. Major global and regional manufacturers are focusing on differentiating their products by developing energy-efficient water heaters. Heavy burners are used to quickly heat water that flows through a heat exchanger in tankless water heaters.
These water heaters are found to be 22% more energy-efficient than gas-powered storage tank models. They do not produce standby energy losses like storage water heaters, which aids in reducing overall energy consumption and provides high savings for end-users. All these benefits have increased the demand for tankless water heaters, which require 40 gallons or less of hot water every day. Thus, the demand for energy-efficient models is expected to boost the growth of the market during the forecast period.
Significant Water Heater Market Trend
The increasing focus on e-commerce platforms is the primary trend in the global water heater market growth. Distribution channels play a major role in driving the demand for water heaters. Advances in technology, coupled with high Internet penetration, have increased online purchases and sales of goods and services across the world. The introduction of information and communication technologies, artificial intelligence, and other technologies has expanded the customer base and created lucrative growth prospects for key vendors. Moreover, increasing Internet penetration has provided end-users with reliable access to a wide range of products. The increasing preference for e-commerce platforms for purchasing kitchen and bathroom equipment is expected to encourage a large number of vendors to adopt online sales channels.
Moreover, the rising prevalence of COVID-19 has drastically impacted the sales of water heaters in physical stores. Most of the trade fairs and product launches have been delayed due to the rising number of COVID-19 cases in Europe. Hence, to increase product reach, most vendors are offering their products on e-commerce platforms. Therefore, the sales of water heaters from the online platform are expected to increase drastically during the forecast period.
Major Water Heater Market Challenge
The high installation and maintenance costs are a major challenge to the growth of the global water heater market. Tankless water heaters are used across the commercial and residential sectors and are more effective than conventional water heating systems (tank water heaters). However, the overall high installation and maintenance costs challenge their adoption. In addition, the increasing incidence of tank leakage and improper operation of pressure relief valves can result in damage to the equipment. Therefore, these water heaters need timely and periodic maintenance to ensure optimum use of water heaters.
The shortage of skilled labor in the HVAC industry has also increased the overall cost of maintenance. The need for HVAC professionals in the country is expected to increase drastically by 2022. This increment is due to a shortage of HVAC professionals, as most of the HVAC professionals in the US are set to retire by 2030. With the shortage of skilled personnel, HVAC companies are facing challenges in filling up HVAC technician job openings. All these factors increase the operational cost of water heaters during their overall life cycle, thus hindering the growth of the global market in focus during the forecast period.
Key Water Heater Market Customer Landscape
The 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 Water Heater 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.
aristongroup.com - The company offers water heaters such as Aures Slim Multi, an electric instantaneous water heater. Also, the company offers a line of thermal comfort products such as heating and water heating, burners, and components through its brands, Ariston, Elco, Chaffoteaux, Racold, Calorex, NTI, HTP, ATAG, and Thermowatt, among others.
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 share growth by the residential segment will be significant during the forecast period. The residential segment of the market generates the highest revenue due to the relatively high scope of the application when compared to other end-user segments. The growth of the residential end-user segment is attributed to the increased preference for tankless water heaters over conventional or storage water heaters. Such factors will increase the segment growth during the forecast period.
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The residential segment was valued at USD 13,768.03 million in 2017 and continue to grow by 2021. The residential segment uses water heaters for domestic purposes such as cleaning, bathing, and washing. The aforementioned benefits have contributed to the increased adoption of tankless water heaters by residential users globally. Countries with cold weather conditions, such as the US, Germany, Russia, the UK, and Canada, are driving the growth of the segment. In addition, in developing countries such as China, India, and Brazil, the high demand for hot water for cleaning and bathing has been a major factor driving the growth of the segment in 2022.
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APAC is estimated to contribute 48% 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. APAC was the largest contributing region in the market and is expected to maintain its position during the forecast period. The increase in infrastructure spending on commercial projects drives the demand for water heaters in APAC. Vendors in the market focus on product innovation and launch to cater to the rising demand for energy-efficient products. The population in various countries of APAC is growing, which is leading to an increase in demand for new houses in the region. In addition, population growth and urbanization in this region have increased the need for smart and sustainable infrastructure solutions. As a result, various enterprises in this region are investing in the construction of residential buildings. Such new infrastructural development projects are likely to fuel the demand for water heaters, which will subsequently drive the growth of the market in the region during the forecast period.
The market in the region is witnessing certain challenges during the COVID-19 period. However, in H1 2021, due to the availability of vaccines, the COVID-19-related restrictions in the region were lifted. This led to the reopening of retail stores offering water heaters. The demand for water heaters rebounded in the region in 2021. Thus, with rising residential construction activities, the market in APAC is expected to continue to witness rapid growth during the forecast period.
The 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 water heater 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 research report has extensively covered external factors influencing the parent market growth during the forecast period.
Water Heater Market Scope |
|
Report Coverage |
Details |
Page number |
191 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.5% |
Market growth 2023-2027 |
USD 6,981.04 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
5.3 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 48% |
Key countries |
US, China, Japan, India, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
A. O. Smith Corp., AB Electrolux, Ariston Holding NV, Bradford White Corp., Ferroli Spa, Guangdong Vanward New Electric Co. Ltd., Haier Smart Home Co. Ltd., Havells India Ltd., Jaquar India, Hangzhou Kangquan Water Heater Co. Ltd., Lennox International Inc., Midea India Pvt. Ltd., Noritz Corp., Rheem Manufacturing Co., Rinnai Corp., Robert Bosch GmbH, STIEBEL ELTRON GmbH and Co. KG, Transform Holdco LLC, Vaillant Group, Viessmann Climate Solutions SE, 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 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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