REFRIGERATOR

INDUSTRY
MADE BY

ANMOL KUMAR TRIPATHI(336/2021)

SAJAL THAKKAR(337/2021)
BHAVIKA GUPTA(338/2021)
SMRITI THAKUR(339/2021)
MEGHA GUPTA(340/2021)
I
N
As per the research study, the Indian Refrigerator Market is
D anticipated to account for growth at a CAGR 8.1% during
the forecast period 2021-2027. The revenue generated from
U the sales of refrigerators in India witnessed a growth of US
S $6900 million by the end of the year 2027. The refrigerator
market in India is increasing due to the improved living
T standards coupled with rising disposable income and
technological advancements contributing to increased
R convenience at low prices. This segment makes up 30 per
cent of the consumer appliances market. The estimated
Y market size in value for refrigerators in India is estimated to
be Rs 195 billion (US$ 3.02 billion) in 2017 and is
A expected to reach Rs 344 trillion (US$ 5.34 billion) by
2022.
N
A
L
Y
S
I
S
Smart refrigerators are highly in demand due to the rising demand for environmentally
friendly refrigerator products and power-efficient freezers in India. The market share of direct
cool and frost- free segment is 75 per cent and 25 per cent respectively.

Market Share
other
4%
Whirlpool
11% LG
LG Samsung
31%
Godrej Videocon
12% Godrej
Whirlpool
other

Videocon
16%
Samsung
26%

CHANGING FACE OF THE REFRIGERATOR MARKET

 Staying cool with going green
Refrigerators built in the past and those built today have much difference in terms of the
energy they utilize. Thus, there is a high demand for the replacement of old refrigerators with
the latest technology products. Manufacturers today are striving to meet the standards and are
thus manufacturing efficient products.
• Compressor power
Compressor efficiency is a crucial determinant of energy performance if refrigerators. The
most common type of compressor used in domestic refrigerators is the reciprocating
compressor.
• Refrigerators getting smarter with AI and IoT
The advent of AI technology has brought a new wave of innovation to create a smart
refrigerator. In addition, the integration of IoT to produce the smart refrigerator is a inevitable
result of the IoT technology and a direct reflection of consumers pursuit of higher quality and
a more convenient life. Smart refrigerators market size is estimated to grow at 16.65% CAGR
between 2019-2026.

DRAWBACK
High cost of modern technologies is a major concern as every manufacturer is focused on size
and design of equipment. Initial investment on smart refrigeration technology is high.
Additionally, day- to-day technical changes make the system complex.
Further, regular maintenance of the technical and smart equipment results in increasing the
cost. High cost of IoT enabled appliances is amidst the key factors restraining the growth of
smart refrigerators market.

PESTLE MODEL

POLITICAL ANALYSIS
Every Company or Organization must analyse the environment, that it is serving with its
products. Since, India has already moulded its ways of business by doing Globalization,
hence the domestic markets in India, or any country that is integrated globally has its effects
all over the world. The Refrigerator market in India, are having some of the major key
players that are, Samsung Electronics, LG Electronics, Godrej, Whirlpool Corporation, Haier,
and many more. But the significant noticing factor here is that Except Godrej every company
is a foreign Company. These companies do have a manufacturing plant in India, now but,
before this our Indian domestic market was majorly depended on the imports to fulfil the
existing domestic demand. Godrej is the first Indian company that has come up with the
refrigerators. Also, Since the other companies have their origins outside India, so maintaining
relations with the other countries is very important for India currently. Due to Globalisation,
we have indirectly initiated our interdependency and, to maintain that good Political relations
between the two nations is important.
According to the current news, Samsung has bagged 33.9% share in Indian domestic market
followed by LG electronics. Though they are manufacturing in India itself, but both are
Korean multinational companies. Political disruptions in these countries can create a havoc in
Indian Refrigerator Market too.
As, Samsung is a Korean company, has its regulations comes under the act of
Comprehensive Economic Cooperation Act (CEPA), which is facilitating the trade
between the two countries since 2010.The recent visit of Indian Prime minister Modi to
Korea in 2015, made, India and Korea to amend the rules., to strengthen the cooperation, on
energy and electronics. A target of bilateral trade of $50 million by 2030, has been set up
by Mr. Modi for both the countries, that will result in more production of electrical
appliances in India including Refrigerators.
Also, initiatives like “Make in India”, by the political parties, impacts society on large. As in
India, this, initiative is boosting the local manufacturers, and the Refrigerator Market can also
see some new players entering the Market, this can prove to be a threat for the existing
suppliers in the Market.
Another major thing that can affect the Refrigerator Market is the GST rates, that are
improvised by the existing political government of the country, annually. Current GST tax on
the Refrigerator is being set up at 28%. Whereas, in the past, the rates were cut down to 18%
in 2018, which in turn increased the demand of the Refrigerator of that year.
Changes in political equations between the two countries can affect their business
relations also. As, a result, extra tariffs can be imposed, subsidies can be reduced, Tax
payment regulations can also be improvised according to the political situation.
Hence Political stability in India itself is very important so that other countries have some
faith in the Indian domestic market, that their other country divisions would reap some
benefits to them. Also, if there come some rough patches between the relations of the two
trading countries than, it can also adversely affect the current domestic Indian Market, since
after all, we all are interdependent on each other for our needs.

ECONOMIC ANALYSIS
Economic Environment is considered as a significant factor in the production and
profitability of every business. Economic viewpoints regarding a country can make that
country more approached and can be the reason of disinvestment also, according to the
economic condition.
In the Refrigerator Market, if the economy of the country is in recession the consumers can
think of buying the electronics less and save more and increase their savings, whereas, if the
country is gaining growth than, there would be positive outlook among the consumers also,
and they would be ready to spend and increase their standards of living. As during the First
Lockdown period due to Covid-19, AC’s and refrigerators were locked in the Godowns that
somewhat contributed to the Rs. 2000 crore losses in the first 15 days of April 2020.Also
since most of the Refrigerator’s brands are global, hence currency fluctuations can also
affect the market of Refrigerators.
According to the Budget 2021, the Government of India proposed to increase the custom
duties on refrigerators and washing machine, to boost the local manufacturing and increase
the self-reliance of the country. This would ultimately make the imported good more priced
and people, will eventually start buying more of the domestic Refrigerators.
Moreover, as income of a certain household is also somewhat linked to the economic
growth of the country, hence if income is good than, the consumers can think of spending
more in these areas to raise their standard of living. Whereas there is no point of selling a
refrigerator costing Rs. 20000, where households have the average income of Rs. 5000 per
month. Since, customer is logical and rational, hence he/she will not buy anything that is out
of their budget.
SOCIAL ANALYSIS
Social and cultural factors also, play an important role in profitability and life of the
businesses. These factors can directly affect the consumer’s decisions to make the final
purchase. A company should keep in mind the social and cultural factors of the society that
it is serving.
For instance, if there is a country, where colour black is termed as a bad sign, or sign of
reduced income and the society has the major belief on this. Then, if any company comes up
with the refrigerators of black colour than it can directly impact the sentiments of the target
market, and in result, customers will not buy the black refrigerator. Even while advertising,
the company should keep in mind the social and cultural factors of the society and should
pitch their products according to that, otherwise this can lead to an epic failure.
Cultural beliefs are also an important part, that lead the minds of the customers. Customers
are rational beings with some beliefs and perceptions. Any business should research well
before making their products enter the market, otherwise, customers would not accept it and
the product will not have any sales.
Also, it has been observed that though the Refrigerator market is increasing in India, but its
penetration is still not that high. The first reason is that lack of uninterrupted power supply or
no power supply in many areas, another reason, of this is stated in some reports that, there is
still some stereotypes in the rural societies that Refrigerators are disproportionately
benefitting the women of the family. This is mainly in the families where, decision making
power is in the hands of the Males.
For a company it is also important to survey about the social class of the society that it is
serving, which will help it further in setting target markets and correct segmenting of their
products. By looking at this most companies set up their showrooms in the places where there
are more customers approachable and in the main markets, where most of the people
generally come up for their shopping. Apart from this, based on the social structure of the
society some additions or subtractions can be made to the product so that it can become
widely affordable.

TECHNOLOGICAL ANALYSIS
1. StayCool : StayCool is a colling technology which was firstly introduced by Godrej,
StayCool keeps the food well frozen and keep the freezer cold even when refrigerator
is off due to no electricity.
2. New LED lighting: Samsung refrigerators are equipped with New LED Lighting
which help in saving energy and increases the space in the refrigerator. LED bulbs
emits heat 10 times lesser and consumes 20 times less power as compared to ordinary
bulbs.
3. Digital Inverter Compressor: Now a days refrigerator comes with new technology
i.e. Digital Inverter Compressor which senses the temperature of the fridge and
accordingly maintains temperature of refrigerator and it also helps in reducing noise
upto 25%.
4. Convertible Feature: Refrigerator brands like Samsung and LG are offering 5
convertibility options i.e., Normal Mode, Extra Fridge Mode, Seasonal Mode,
 Vacation Mode, and Home Alone Mode in which you can convert your freezer into
fridge and vice versa or can shut down fridge or freezer.
5. Innovative knock- on feature: Recently LG conducted research in which it founded
that people open a refrigerator door for around 79 times a day which leads to wastage
of energy and the cool air. To resolve this issue LG introduces an Innovative Knock-
On feature in which consumers can see inside the refrigerator by knocking twice on
the glass of the InstaView Door- in- Door which will save energy and cool air.

LEGAL ANALYSIS
1. Environment Protection Law: Government has formed some important
Environment Protection Law to protect Flora and Fauna of the country.
2. To shift to Vacuum Panels from the Traditional Foams for Cooling : Consumer
Electronics and Appliances Manufacturers(CEAMA) has made it mandate for the
refrigerator industry to shift to vacuum panels from traditional foams for cooling for
5- star refrigerators.
3. Mandatory standards and labelling program: Mandatory standards and labelling
program is introduced by Bureau of Energy Efficiency (BEE) under the Ministry of
Power due to which price of refrigerator has gone up by 3% - 8% depending on the
model of the refrigerator.
4. Extend Producer Responsibility: Firms need to collect and recycle 30% products of
what they sold a decade ago by 2019 which will add up to 10% every year till 2023
i.e., for 2020 need to recycle 40%, for 2021 50%, for 2022 60% and for 2023 70%. To
do this refrigerator companies buy producer- responsibility organizations which will
collect the scrap from consumers and give them to the companies.
5. Indian Cooling action plan: ICAP is launched by MoEFCC whose objective is to
provide sustainable cooling and to protect the ozone layer with projection of cooling
needs of 20 years i.e., till 2037-2038. It will help us in achieving Thermal comfort and
to reduce GHG emissions.
6. Bear the Standard Mark as per order of BIS: According to DPIIT from January 1,
2022, household refrigerating appliance- refrigerators must adopt Indian Standards
provided by the Bureau of Indian Standards and should have standard mark and the
license from the Bureau.

ENVIRONMENTAL ANALYSIS
1. GWP equal to or higher than 2500 (with exceptions) will be banned from being
placed in the market after 2020: GWP is the index which measures the global
warming impact of emission of greenhouse gases to the impact of Carbon Dioxide.
According to various governmental agencies any refrigerator having GWP ≥ 2500
will be banned after 2020.
 2. Use of R600A gases: Previously many refrigerator companies were using R134A
refrigerant gases but now they start using R600A refrigerant gases in their products
which is more eco- friendly.
3. Reduce use of Hydrofluorocarbons(HFCs): Previously refrigerator companies were
using Chlorofluorocarbon’s (CFC’s) but then they start using
Hydrofluorocarbons(HFCs) thinking that it will not affect the ozone layer, but in
recent research it is founded that it is also releasing chemical reactions that are
destroying ozone molecules. So, companies need to reduce use of HFCs to protect the
environment.

4. New equipment using renewables as energy sources and using technologies with
good energy efficiency: Refrigerator Companies need to make products using
renewable energy sources and technologies and need to improve existing products to
protect the environment and energy.

PORTER’S FIVE FORCES ANALYSIS

THREAT OF NEW ENTRANTS
In all the home appliance products, the barriers for new entrants are high because of the large
requirement of capital. Also, no doubt the sector and its growth prospects are emerging at a
positive pace like, market size in value for refrigerators in India is estimated to be Rs 195
billion in 2017 and expected to reach Rs 344 billion by 2022 and India is also more focused
towards urbanization so its market will grow at a positive rate but there are already multiple
brand products in the market which are major players and have grabbed the brand loyalty
which makes it difficult for new entrants. There is a high requirement of huge expenses on
investment in technology, research, and development. Since there is brand loyalty of existing
players, there will be a need for huge expenses on advertisement for new entrants to survive
in the market. There is a high amount of investment required on production and distribution
which will be difficult for new entrants due to low experience. Existing players have already
made a bond with the distribution channel network and have made it in their favor and also
distributors would like to sell only those company's product that has a reputation in the
market. Existing players have to abide also by being energy efficient and by being
environment friendly which will require advanced technology, innovation, and also
economies of scale are to be taken into consideration. Also, most companies are having a
large product portfolio which makes their profit huge and that’s why they are capable enough
to compete by doing huge expenditures in innovation and R&D. These all things will be
difficult for new entrants to refrigerators. So, for existing players of the refrigerator industry,
the threat of new entrants is low.

BARGAINING POWER OF BUYERS

Indians are the rational consumers, also with plenty of brands available in the market with
low switching cost, the actual bargaining power of buyers are high for the following reasons:
1. Price sensitivity: With plenty of brands available in the marketing producing similar
quality refrigerators, price change could lead to the movement of consumers from one
brand to another, the buyer gains bargaining power.
2. Buyer’s information availability: Indian consumers being rational, collect all the
information available in the market before buying any product. Although with easily
available information consumers can easily compare prices online, get information
about a wide variety of products, and get access to offers from other companies
instantly.
3. Switching costs: There is hardly any switching cost incurred if a consumer switches
to some other brand.
To sum up, the consumer is rational in the Indian market and there is a wide variety of brands
in the market that leave the consumer with many choices, therefore the bargaining power of
the buyer is high.

BARGAINING POWER OF SUPPLIERS

For the raw materials of all the home appliances products, there are large number of suppliers
in the market, and the option for import is also there. Since the raw material used in the
product are large in numbers but mostly revolve around products like metal, paint, chemical,
plastics, etc. All these products are having large number of suppliers & Asian countries are
rich among these raw materials, so it is available without any hindrances and the product
differentiation is not much among the suppliers. In this case, they can’t increase the price
much and can’t decrease the quality much. So, overall due to these factors and large number
of suppliers in the market bargaining power of suppliers is low.

RIVALRY AMONG EXISTING COMPETITORS

There is a wide variety of competitors in the refrigerator industry starting from global brands
such as Samsung, LG, Bosch, Whirlpool, Haier, Hitachi, etc., and local brands such as
Voltas, Godrej, Videocon, etc. All these brands have their targeted clients and well-
established reputation. These brands are there in the market for a very long time and have
developed their loyal customers, therefore the rivalry among existing competitors is high. It
would be very difficult for any of the companies to win market share from these companies
unless a company brings a unique innovation and appeal to the customers.

Market Share
other
4%
Whirlpool
11% LG
LG Samsung
31%
Godrej Videocon
12% Godrej
Whirlpool
other

Videocon
16%
Samsung
26%
THREAT OF SUBSTITUTES
There is large number of companies that manufacture home appliances including
refrigerators. And some companies are having a good level of brand loyalty and reputation in
the market but since technology advancement is at pace since the last decades, people are
more aware nowadays about the price, criteria, offers, features, and all other important
information as well. So, there is a threat of substitutes for the existing players in the market.
Nowadays every company is focussing on innovation and R&D to make their product unique.
So, it will be a challenge to influence customers & maintain their brand loyalty. Overall, there
is a threat of substitutes for all the existing players.