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Voltas topples LG to be No. 1 in AC biz 06 Dec 2014

Voltas topples LG to be No. 1 in AC biz

Tatas-owned Voltas has taken the top slot in the Indian airconditioner (AC) market, overtaking Korean white goods giant LG that has dominated the business for over a decade.

Latest data from market research firm GfK Nielsen Retail Audit showed that Voltas had a shade over 20% of the pie in September, based on sales at multi-brand and exclusive brand outlets. This was marginally ahead of LG's market share of 19.9%.

This is perhaps the first time in recent years Voltas has taken the pole position across the AC segment.

However, for the first half of the financial year (AprilSeptember 2014-15), LG continues to lead with a share of 20.5%. Voltas follows with a share of 18.9%.

Samsung, the other big player in the AC market, is a distant third. The brand, which has exited the windows AC category , had a share of 12.8% in September and finished the first half with a share of 13.7%, the data showed. This would perhaps be one of the few consumer categories where either of the Korean chaebols are not at the top, considering their popularity among Indian buyers.

The AC market accounts for sales of 3.2 million units annually but has been witnessing tepid growth over the last two years. The penetration of ACs stands at 3-4% in the Indian market. LG said it is working towards protecting its market share leadership.

"Today there are more than 50 brands trying to sell their ACs (more than 70 brands are registered for star-rating labelling at Bureau of Energy Efficiency).With multiple players joining the product categories, our primary objective remains to sustain our leadership position and strengthen our business share across chan nels," said Saurabh Baisakhia, business head for ACs at LG India.

The worrying part for the Korean MNCs is also the fact that Voltas already leads in the big-volume multi-brand outlet, which is believed to account for 80-85% of AC industry volumes. Pradeep Bakshi, president and COO of Voltas, said the company's increased penetration in the country has helped the brand capture higher volumes and presence. "This has been an outcome of our ever-increasing reach in distribution, a dis tinct brand positioning based on consumer insights... and investments in after-sales service."

Samsung said its exit from the window AC category may have brought down its overall share in the segment."Samsung exited the window AC category around the end of 2011 and decided to operate only in the split AC segment as that was a growing market.Since then, our market share in the split AC segment has only been growing," a company spokesperson said.

Apart from increasing its reach across the country, Voltas has also been aggressive in attracting top talent and poaching from rivals.

Those brought on board include Deba Ghoshal (exLG) who heads marketing and sales (modern trade, commercial), Jogesh Jaitly (ex-Samsung and LG) who heads sales (general trade), Rahul Jain (ex-LG) who heads service, and M K Sharma (ex-LG and Samsung) who heads manufacturing.