In categories, such as air conditioners, that pick up during summers, the last year witnessed high growth in value due to premiumisation but volume growth was subdued because of the mass segment. In 2023, the expectation is to have growth across mass and premium segments, which is seen as an indication of balanced prosperity. Daikin India’s Chairman and Managing Director, K.J. Jawa, and Member of the Board, DIL, Japan firmly believes this.
“With ACs gaining the reputation of a productivity enhancer instead of a luxury purchase, it is important that we develop and market products for every section of society. At Daikin, we identify ourselves as the ‘affordable-premium’ brand,” states Jawa, explaining that owing to localisation and better supply chain merits, Daikin has been able to lift its AC’s quality and performance without increasing prices.
Not Just About Cooling
Jawa asserts that ACs today are linked to well-being, comfort and convenience. “It also impacts sleep, emotions and performance and Daikin ACs can help people remain active and productive. We have products available at every price point and for every customer need,” he says.
With ambient temperature rising across the Indian sub-continent, ACs have begun to play a larger role than just cooling. “It also dons the role of ventilation, filtration and heating. There may be seasonal blips but they will not be strong enough to dent the explosive growth phase we are about to enter,” explains Jawa.
As per the Indian Air Conditioner Market Outlook 2027-2028 report, AC penetration in India is still at around 8 per cent in comparison to the 90 per cent mark in developed countries, indicating massive headroom for growth. “By tapping into India’s powerful manufacturing ability and combining it with the ingenuity of Daikin’s Japanese designs, Daikin broke through. We designed a product range to suit India’s extreme temperature range, as high as 56°C, by following Japanese processes adapted to Indian requirements,” explains Jawa.
A Five-pronged Approach
Daikin anticipated the early onset of summer and planned its production to support the early consumer demand with a five-tiered strategy.
The company is product ready as per the current Bureau of Energy Efficiency Rating’s standards and its products are ready to meet all AC requirements on the likes of watt-hour from a child’s bedroom to the boardroom, across the country. “Our products are tailor-made in India to suit the country’s weather patterns and power availability,” Jawa informs.
In the second aspect, distribution, Daikin has revitalised over 12,500 sales points with various schemes, ensuring that its stocks remain at the forefront of consumer demand. Each store and every in-shop demonstrator is trained and equipped with knowledge about the new products and features and how people can get better returns from Daikin ACs as the ‘air specialist’.
In its factory, the third area of focus, localisation has helped the company reduce the time-to-delivery gap, increasing its product availability for discerning domestic consumers. “With demand
increasing manifold, Daikin powered by ‘Made In India’ products, is the most preferred AC brand in the country that offers cutting-edge technology coupled with affordability,” the chairman asserts.
On research and development, with a focus on artificial intelligence and the internet of things, continuous investment has helped it create models for Indian conditions.
Classifying after-sales service as the final component, the company has service technicians trained at Daikin’s skill factory, Daikin Japanese Institute of Manufacturing Excellence at Neemrana as part of its training philosophy to engage and employ Indian youth through skill enhancement.
With technology at arm’s reach these days, consumers are clear about their expectations from every brand. Daikin India’s CMD informs that the company is continuously researching global trends and customer anticipations in every geography. Its 2023 AC line-up boasts of patented streamer discharge for clean and pure air, swing compressor for higher compressor efficiency, dew clean technology for cleaning, triple display for consumer convenience and smart operations through Alexa, Google Home and the like that make the AC app controlled.
“To target the Indian diaspora and drive sales, Daikin India has reinvented itself every year to become the fastest-growing AC company and it is no different this year. We have revitalised the Daikin brand for stronger consumer recall pan India with high-decibel campaigns across print, outdoor, online, radio and in-store. A mass media campaign is currently underway, reaching out to more than a billion Indian households,” says Jawa.
The India Opportunity
The repurposing of ‘product’ and ‘price’ for optimal growth would continue to take place and there is no correct formula for addressing this. “Balancing price improvement and higher inventory pile-up is a cat-and-mouse game, that we need to master as we go along,” Jawa says.
Consumers would want to pay a little extra for a future-ready product that can add value to their lives. “I have seen no exceptions to this in my career of over 40 years. India as a country is moving from a service economy to a quality-of-life economy. Future generations are looking at branded, superior and eco-friendly choices to surround themselves, but at an affordable price,” he adds.
With India now being regarded as the most populous country, the growth opportunities are aplenty but the trick remains in understanding consumer expectations.