The cool, cool business

In recent times, the electronics market in Nepal has expanded vastly. So much so that what once used to be considered as luxurious products like air conditioners have also witnessed a boom, particularly over the last two years.
A greater momentum in the business environment following market liberalisation introduced post-1991, rise in spending capacity of Nepali consumers and availability of easy finance and instalment schemes have attributed to this market phenomenon.
“Two years ago, our clients were only big hotels and projects. But now the market has expanded and domestic use of air conditioners is slowly growing,” says Navin Bansali, MD of Air Tech Industries that sells McQuay brands of air conditioners in Nepal. “Even today, 80 per cent of our client base comes from projects, private offices and hotels,” he concedes.
Market watchers also attribute the increase in the sale of air conditioners to the erratic monsoon patterns, increasing heat and reduction in electricity consumption by air conditioners by over 65 per cent due to enhanced technology.
Besides, the fact that air conditioners make a home more comfortable, often cutting down pollution level inside the house, the role of air conditioners as a status symbol can not altogether be ignored.
“Use of air conditioners in homes is an increasing trend,” says Bijay Kumar Chaudhary, chairman of Himal refrigeration & Electrical Industires that sells Himal, the first indigenous brand and Fuji Air, Blue Star and Daikin brands of air conditioners in Nepal.
“The market for air conditioners is upbeat. Unlike TV and refrigerators, personal use of air conditioners is not yet very encouraging,” says Anil Sharma of Ashoka Electronics. “But it is catching up slowly,” he adds.
Bansali agrees that air conditioner is no more a mere symbol of luxury but an accessory to comfort. It can also be asserted from the fact that top global brands are opening their shops in Nepal. They are shifting their attention to the emerging Nepali market and a new, wider range of clientele.
One can find a wide range of air conditioners in the market today at a price range of Rs 32,000, to 85,000, for an air conditioner with one tonne capacity, which is mostly used for domestic purposes.
“Japanese brands are expensive. But there is a choice for consumers as the market is flooded with Chinese, Malaysian, and a local brand too,” says Purushottam Kafle of Triveni Group that sells Panasonic brands of air conditioners.
On one hand, the entry of top brands like Samsung and LG into Nepali market has opened a new vista for consumers. On the other hand, sellers are facing cutthroat competition with a finite market and huge choice of products.
“The growth will come from grabbing market shares from competitors,” says Sharma.
To be a successful brand, manufacturers should make a consumer feel pampered and unique, because post-1990 liberal-economy has made a Nepali consumer star of the show. Today’s consumers cannot be fooled. As more products become easily available in the market, the pressure increases on the brands to offer something truly special to its consumers.
“If I am going to spend my hard earned money on something like an air conditioner, I want guarantee that I get proper after sales services and prompt client service” says Mahesh Pandit, a consumer (in Anam Nagar. Kathmandu).
“Our strength is our quality,” says Bhansali. “We offer our consumers a brand that has a global reputation.”
“We offer prompt after sales service,” boosts Chaudhary. “Besides, every brand is unique in its own way, as successful companies today spend millions on consumer research. We are aware of the growing trends of consumer-oriented economy,” he adds.
“Few years back it was considered a luxury, but recently consumers perception of air conditioners have changed. Now it is a completely affordable luxury, due to the wide range of brands and low pricing,” says Chaudhary.