Blue Star makes deep inroads in the residential segment; targets 25% growth in Room AC sales in FY15

Blue Star makes deep inroads in the residential segment; targets 25% growth in Room AC sales in FY15

Airconditioning and commercial refrigeration major, Blue Star Limited, has announced the launch of a new range of stylish, smart, eco-friendly and modern room airconditioners for the residential segment. These airconditioners, apart from contemporary features, choice of colours and sophisticated technology, offer high energy efficiency resulting in significant power savings.

Blue Star, which has seven decades of experience in providing expert cooling solutions, has been traditionally strong in the corporate and commercial segment such as offices, restaurants, showrooms, boutiques and ATMs for its room airconditioners. However, three years ago, the Company forayed into the retail channel to cater to the residential segment and made significant changes to its marketing mix. This initiative met with resounding success and Blue Star's room airconditioner sales have grown considerably, outperforming the market year on year. In fact, in the current year, the residential segment now contributes to over half of its overall room airconditioner sales signifying the tremendous response that the Company has received from the home segment. The Company plans to continue its thrust in this segment with its new line-up for 2014.


New Line-Up Of Energy-Efficient Products


Blue Star's new line-up of room airconditioners comprising over 60 models adheres to the new energy standards prescribed by the Bureau of Energy Efficiency (BEE). With effect from January 2014, BEE has upgraded the energy standards of room airconditioners to a higher level, in line with the Energy Conservation programme. All the star-rated units this year will have a higher Energy Efficiency Ratio (EER) as compared to the same star units last year, translating to savings in power bills. Further, within the range of EER specified for each star-rating, Blue Star has opted for a higher EER within each band, in order to maximize energy efficiency.

Apart from being super efficient, the new range of split airconditioners have a contemporary and stylish look with multi-colour options in the 3-star and 5-star models such as pearl white, two-tone silver, champagne gold and wine red to appeal to home consumers. Several markets in the country have shown their preference for coloured models rather than the traditional white ones, and colour models now comprise about 15% of Blue Star's split airconditioner sales. In addition, the new range boasts of several features including i-feel for comfort where one sits, seven filters for ultra-pure air, turbo operation, hidden display, long distance piping, auto mode, dry mode, sleep mode, blow/self clean function, elegant remote control, rust-resistant construction, self diagnosis, scroll compressor and acoustic insulation on compressor, amongst others.

The HCFC ozone-depleting refrigerant phase-out plan is being implemented by the industry and the Company has taken steps to comply with the programme. This year, the Company has launched a range of 16 models with R410A eco-friendly refrigerant and plans to further enhance this range in the future.

Also being launched is a unique 0.75 ton 5-star split airconditioner, which consumes just 740 W of power when the compressor is on, making it perhaps the lowest power consuming airconditioner in the country.

The Company also plans to aggressively promote its inverter range of residential split airconditioners for the benefit of upwardly mobile customers. The inverter compressor in these units varies its speed depending on the ambient load, resulting in perfect cooling, apart from significant energy savings. Inverters save upto 30% power over the 5-star rated split airconditioners. Considering the technological advantages that inverters offer and the fact that the price difference between the 5-star rated split airconditioners and inverter-based airconditioners has reduced significantly, inverters are anticipated to grow exponentially over the next few years. Though inverters comprise over half the market in countries such as China, inverters are only about 3% of the Indian market and this share is likely to triple over the next couple of years.

The Company also plans to enhance investments on new product development and research and design initiatives in order to continue to develop modern and sophisticated products competing with the best in the world.




As regards to distribution, in 2014, Blue Star's room airconditioners will be available in 3000 outlets in around 500 locations spread across the length and breadth of the country, vide exclusive and multi-brand sales and service airconditioning dealers, retail showrooms and modern trade. The Company has also built up a strong installation and service franchise network to support the retailers. The expansion of the Company's presence in Tier 3, 4 and 5 markets has contributed immensely to its growth. Around 50% of the Company's sales are from smaller towns since consumers in these markets are aspirational and prefer premium brands.


Advertising And Brand Communication


In terms of advertising and brand communication, the Company has plans to invest about Rs 25 crores in the forthcoming summer season with a set of TV commercials supported by ads in mainline dailies, cinema and hoardings. It also intends to enhance its digital marketing efforts in social media as well as the internet, considering that most Blue Star buyers belong to the highest socio-economic category (SEC A), who are active on the internet. The differentiated value proposition to the residential audience will continue to be 'Get office-like cooling at home' which leverages Blue Star's expertise in cooling offices and communicates that one can get the very same expertise at home.

Blue Star has also been recognized as a 'Consumer and Industrial Superbrand' by Superbrands, a global agency which selects strong and powerful brands from across the world. It acknowledges that the brands to win this laurel are those with high product integrity and brand development, thus succeeding to win consumer trust. Blue Star is one of the very few brands to be accorded the Superbrands status in both, the business as well as the consumer segments.


Targeted Growth For FY15


Speaking to the Press at a conference held at Chennai, B Thiagarajan, Executive Director & President – AC&R Products Business, Blue Star Limited said, "The room airconditioners market in India grew by about 9% during 2013, while Blue Star outperformed the market growing 18%. We find that the room airconditioner segment is becoming more brand-conscious preferring specialist airconditioning players. This trend is helping us since Blue Star is perceived to be a premium and aspirational brand and our pedigree, product range as well as pricing is in conjunction with this image. Blue Star is a strong contender in the consideration set of the discerning consumer, and several home consumers have instilled their faith in us. In addition, Blue Star continues to be a strong player in the corporate and commercial segment which comprises 25% of the overall size. The market for room airconditioners is expected to grow by around 15% in FY15 and considering our 3-year track record of outperforming the market coupled with our impressive new energy-efficient product range, we hope to achieve growth of 25% from the residential segment."


For additional information, please contact: B Thiagarajan, Executive Director & President, AC&R Products Business, Blue Star Limited, Bandbox House, 254D, Dr Annie Besant Road, Worli, Mumbai – 400 030 email: Telephone: 09821078098.

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