Fan Industry revives amidst rising demand and energy efficiency transition

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Fan Industry revives amidst rising demand and energy efficiency transition

Fan Industry revives amidst rising demand and energy efficiency transition

Industry News
Sep 06,23

The Indian fan industry boasts an estimated worth of approximately Rs 10,500 crore, with approximately 200 entities operating in the segment, including 14 well-known brands.

Fan Industry revives amidst rising demand and energy efficiency transition

The fan industry is experiencing a resurgence in demand, driven by a surge in housing renovation activities in both urban and rural areas. Anticipating even stronger momentum as the festive season approaches, the industry, which had previously seen sluggish growth over the last two fiscal years, is currently in the midst of a transition towards greater energy efficiency and star labelling, as outlined by the Indian Fan Manufacturers Association (IFMA).

Anuj Poddar, Chairman of IFMA, emphasized that this transition is benefiting all stakeholders, including customers, by encouraging them to invest in more energy-efficient products. The Return on Investment (ROI) for consumers opting for highly energy-efficient fans ranges from 18 to 24 months, but the adoption of new technology always takes time.

Poddar noted, "The past few months have marked a transitional period for the industry. We smoothly transitioned from non-star to star ratings, with a few expected hiccups. Now, with numerous Indian homes undergoing renovations in the next two to three months, creating a demand for replacement ceiling fans, we anticipate a surge in demand."

He added, "These next two months, akin to a mini-season for us, will witness a flurry of renovation-related activities, and we are already seeing early signs of recovery. We are hopeful that consumers will become more aware of star ratings, further boosting demand."

The Indian fan industry boasts an estimated worth of approximately Rs 10,500 crore, with approximately 200 entities operating in the segment, including 14 well-known brands.

The shift towards energy ratings has cost implications that need to be passed on to consumers. Poddar acknowledged, "From a margin perspective, the industry has felt an impact. However, we believe that the full cost of this transition has yet to be fully transferred to consumers at the product level, and this should be addressed sooner rather than later."

Furthermore, IFMA is urging the government to reclassify fans under a lower GST bracket, ideally at 12 per cent instead of the current 18 per cent, considering their mass appeal.

Poddar emphasised, "We have been advocating for this change for the past two years. If not the lowest GST rate of 5 per cent, at the very least, fans should fall under the 12 per cent bracket."

Since January of this year, fan manufacturers have been required to display star ratings ranging from 1 to 5 stars on their products, with ratings based on service value (air delivery in cubic meters per minute divided by energy consumption in wattage), following Bureau of Energy Efficiency (BEE) guidelines.

Notable brands in this segment include Orient Electric, Havells, Crompton Greaves Consumer Electricals, Usha International, and Luminous Power. The report from IFMA highlights a growing presence in rural markets, driven by increased electrification, and a shortening replacement cycle in urban markets due to premiumisation.

The demand for premium fans with enhanced aesthetics has been steadily increasing over the past 3-5 years, reflecting consumers' preferences for more appealing interiors.

Source: Business Standard