Room air conditioner (RAC) penetration in India is expected to rise from less than 10 per cent to around 50-60 per cent over the next 10-15 years, driving exponential demand, according to Mukundan Menon, Executive Director and Head of the RAC Business at Voltas.
With a 20 per cent market share in the RAC category, the company crossed the 2-million mark in the sale of RAC units in the past year and currently offers 50-60 stock keeping units (SKU) across different formats. Menon sees significant growth potential over the next decade and expects Voltas to outpace industry growth. “Over the past 3-4 years, we have consistently grown at least 5 per cent more than the industry,” he noted.
The commercial refrigeration segment, where Voltas currently holds a 30 per cent market share, is also expected to grow over the next 10 years, driven by expanding cold chain infrastructure.
Menon highlighted key drivers of RAC demand, including, rising temperatures, growing consumer affordability, and expanding finance options in the category. “Financing schemes are reducing the burden of upfront costs. You don’t need to invest ₹40,000 in one shot anymore,” he added.
Growth of online marketplaces
Online marketplaces, particularly Amazon and Flipkart, contribute around 10 per cent of Voltas’ business, Menon said. The overall RAC market in India is about 15 million units, with online sales now accounting for 8 per cent of the total market, up from 4 per cent pre-COVID. ”Online adoption of air conditioners, despite not being a plug-and-play product, has grown significantly,” he added.
Voltas is also looking to expand presence in the commercial air conditioning segment, particularly targeting data centres. Currently, its share in this segment is negligible, but the company sees strong growth potential.
“We are already involved in mechanical, electrical, and plumbing (MEP) solutions, but our presence is small. Similarly, we provide cooling equipment for data centres, and we see this market becoming increasingly important. We are now exploring partnerships to strengthen our position in this space,” Menon explained.