- Higher margins to retailers is one of the topmost reasons
- Next in line is the low maintenance cost involved
Anil Goyal, Goyal Electronics, Faridabad (A city in the National Capital Region of India), mentioned that though the inquiries for branded air coolers have increased, his shop still sells more unbranded air coolers. He said, “The price gap between branded and non-branded air coolers is still too big for many consumers here and that is why they prefer to buy non-branded ones.”
He sees rise in temperature as the primary reason behind this sharp increase in sales figures.
Higher tax slabs, lower tax slabs
While the trend in areas, where the majority of population is mostly lower middle class, is tilted towards unbranded air coolers, it is unclear in areas where the population falls under higher tax slabs. A lot of consumers in these areas either buy air conditioners or branded air coolers. But it is difficult to identify consumers’ choice as there are only a handful of shops retailing unbranded air coolers in these areas.
A visit at some of the consumer electronic stores in these areas also reveals the fact that such stores do not even put air coolers on display during the season. They are kept either at a corner in the shop, or sometimes in the storage houses.
The scene, however, is completely different in the markets that are adjacent or located in areas where the majority of population falls in the middle and lower middle class category. A lot of consumer electronics showrooms here display air coolers at the front during summer. Most of these displays give more weightage to unbranded air coolers.
Goyal, whose shop is located in a small locality in Faridabad, claims to have sold more than 150 coolers in last 15 days. The point to be noted here – there are more than 60 electronics shops in this locality alone, and there are more than 25 such localities in city. The moment of truth – All these shops sell unbranded air coolers during the summer season.
Why? Goyal explains, “A top quality unbranded air cooler for a family of four people, costs around Rs 5000 only. A branded one with similar cooling is almost double this price. Most of the consumers here either live on rent and their pockets are not that big.”
Maintenance is no fuss
Another market located in Delhi has an entire street dedicated to sales of consumer electronics, and shops there display unbranded air coolers in all shapes and sizes. Jairaj Singh who works as a sales-cum-repair executive there, told us that branded air coolers and air conditioners are made available only on advance orders. The shop he works at does not even have a single branded air cooler on display.
Another retail executive working at one of these shops told us that the maintenance costs of an unbranded air cooler is lower than the branded ones. He pointed out various examples, one is that the cost of repairing water motor equipped in branded ones is higher than simply replacing the water motor found in non-branded air coolers. Please note that water motor is known as water pump in markets like these.
Cooling pads used in unbranded air coolers cost Rs 50 to the end user, while the ones used in branded ones are available at a starting price of Rs 300. There is a difference in quality as well. The ones used in branded air coolers are made of honeycomb while the one used in unbranded air coolers are mostly made out of wood wool. (Video explaining difference in air coolers)
The game of margins
A shop owner said, “Margins in unbranded air coolers are more than branded ones. We do not have to depend upon companies to provide service for unbranded air coolers. Our workers can easily replace motors, water pads and fans as well. Many of us even get air coolers made in bulk before the season. We start selling these by the end of April and the sales continue till August.”
Out of curiosity, we asked how much getting an air cooler tailor made would cost us? His reply (translated from Hindi to English), “A plastic body will cost no more than Rs 3,000, while the cost of a metal body would depend on its weight. We will charge a fee of Rs 650 for assembling the air cooler and delivering it your house.”
In fact, he shared a list of parts along with prices used in an unbranded air cooler with us. This list read, “Exhaust Fan – Rs 2300, Water Motor – Rs 225, Medium Size Cooling Pads – Rs 55.”
It seems big companies will have to do a lot of ground research if they want to compete against local air cooler manufacturers. But what if these local manufacturers start assembling air conditioners on the same lines they get these air coolers manufactured and retailed at?