The last few years have seen stiff competition for leadership in the Indian refrigerator market, especially among Whirlpool, Electrolux Kelvinator Ltd. (EKL), Godrej, LG, and Samsung.
After experiencing marginal growth for some years now, the segment is looking at a double-digit growth this year.
"The segment saw a growth of 7 to 8 percent in 2003, and this year the industry is hopeful of clocking a growth of 12 to 15 percent," an official from the Consumer Electronics and TV Manufacturers Association (CETMA) said. The market size, according to CETMA, is estimated at 4.1 million units for 2004.
Compared to the installed manufacturing capacity of the players at approximately 7 million units per annum, the refrigerator market in India is still small. This has led to too many major manufacturers operating at lower capacity, resulting in significantly higher overheads, according to ICRA's Sector Analysis in April 2004.
The total industry size during 2003 was 3.4 million units, consisting of 2.8 million direct cool (DC) units and 0.6 million frost-free (FF) units, according to ICRA. The past 3 years has seen a partial demand shift toward FF units.
"Though the FF category has seen a growth, almost 80 percent of the sales in India is from the DC category," a CETMA official told Business Line.
In the FF segment, the major players are Whirlpool, LG, Godrej, BPL, and Samsung. A look at the overall market share of the major players by ICRA reveals that Godrej lost its leadership position in 1998-1999 to Whirlpool.
Meanwhile, Whirlpool's market share has declined from 27.3 percent in 2000 calendar year to 26.7 percent in the 2003-04. After Whirlpool and Godrej, the brands owned by EKL occupy the third position.
EKL's share has also seen a dip from 23.6 percent in 1999 calendar year to 16.3 percent in 2003-04. In the past few years, the refrigerators market has seen the influx of Korean companies, which have managed to capture a sizeable portion of the market from established players using innovative product lines and aggressive promotion campaigns.
Among the Korean players, while the market share of LG increased to 14.5 percent in 2003-04 (from 5.4 percent in the 1999 calendar year), the share of Samsung increased to 5.9 percent (from 3.3 percent) during the same period.
LG and Samsung have increased their market share at the cost of older players such as BPL and Videocon in the DC category.
The market leader in FF segment, BPL, and one of the older players in the category, Godrej, have witnessed a decline in share in the last 3 years.
LG is now the leader in the FF segment, having displaced Whirlpool in 2003-2004. Its market share increased to 31.7 percent from 20 percent the previous fiscal. Whirlpool is the second largest player, with a share of 25.7 percent during 2003-04. (Hindu Business Line, Internet Edition)
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