LG reducing prices of its 5-Star AC models for the upcoming summer season


LG refers to Life’s Good and it strives towards making its users’ lives good through their superior quality appliances and electronics. It is one of the highly regarded home appliances and consumer electronics companies in India.

The summer season in India is quite brutal as temperatures soar above 40 degree Celsius on average. The central, western and some parts of north India experiences extremely dry summers whereas, the south, east and remaining parts of north India experiences sultry humid summers. In both these situations, people find it very difficult to cope with the weather and tend to purchase an Air Conditioner to relax.

ACs have started taking the place of the age-old coolers and fans in several Indian households. A rising income level has resulted in more people buying ACs instead of coolers in the country. Since the summer is around the corner, people are looking forward to purchasing new ACs. This is the time LG wants to bank upon for good business.

Energy is crucial for humanity to survive. For the past several centuries humans have been extracting fuels for meeting its energy needs. This has created pollution to the level that it is affecting our well-being and putting the future of our future generations in danger. Home appliances manufactures need to keep in mind that their appliances should be efficient in using energy and wastage is less. The Indian government has categorized the energy efficiency of the appliances through BEE star rating. A 5-star rating represents the highest energy efficiency and 1 star represents the least. One must also know that the higher the star rating, the higher the price of the appliance.

LG being one of the largest home appliance manufacturers in the country strives to offer as many energy efficient stars as possible. It already has a huge market in India but there is always a race going on between the top players and in this case, it is with fellow Korean electronics giant Samsung. Apart from LG, Samsung is also a huge player in the home appliance and consumer electronics market in India. Both the companies deal in similar product categories, which make them each other’s biggest competitors.

According to a GadgetsNow report, the price difference between the 5star models and 3-star models of LG’s ACs were around 8000 Rupees last year. According to LG India’s Vice President Vijay Babu, the company registered around 20% sales through 5 stars rated ACs but this year they estimate that the percentage will go to 70%. This indicates a steep increase in the sale of 5stars rated ACs in the country. The Indian population is becoming aware of the climate change threats and this can be seen in the shopping preference changes.

Another reason for more than double sales of the 5stars rated ACs in India is the price difference and value for money. If the difference between the price of a 5star and 3star rated AC reduces by 50% then it will be a significant drop. Users can then pay another 4000 Rupees for a more efficient appliance that will save more money in its entire life than in the present.

The entire AC market is growing and LG looks forward to benefiting from the general rise in demand for ACs. Last year LG recorded a 28% rise in AC sales whereas this year they are targeting a 40% rise. The revenue from the AC business alone will rise from last year’s 2700 crores to 3500 crores. This is a huge jump in the revenue considering it is of just one company.

However, LG still sees avenues for growth where it feels it has made fewer efforts. An online market is a place the company wants to expand rapidly as the consumers have started preferring the online more gradually. LG has planned to launch specific models for the online market that meets the demand of the consumers who purchase from online channels only. The online market is huge n India and will grow even bigger in future.

LG’s quality products and strive for a better user experience has led them to fame in the electronics market. ACs are a season wise product and it is a good decision to make the best use of the upcoming summer season in India.

-Soumya De

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