ASEAN Air Conditioners Market By Product Type (Splits, Windows, Ducted Systems, VRF Systems, Chillers Systems, Others), By End Use (Commercial/Industrial, Residential), By Country, Competition, Forecast & Opportunities, 2019-2029F

Market Overview

ASEAN Air Conditioners Market was valued at USD 5.58 billion in 2023 and is anticipated to grow USD 8.46 billion by 2029 with a CAGR of 7.24% during the forecast Period. The ASEAN air conditioners market is experiencing robust growth, propelled by factors such as rapid urbanization, rising disposable incomes, and the region's consistently hot and humid climate. Countries like Indonesia, Thailand, Vietnam, and the Philippines are witnessing significant demand, particularly in residential and commercial segments. The market is increasingly leaning towards energy-efficient and environmentally sustainable models, driven by both consumer awareness and government regulations.

Smart technologies, including IoT-enabled air conditioners, are gaining traction as consumers seek convenience and control over their indoor environments. Additionally, the demand for inverter technology is rising due to its energy-saving benefits. The region's growing middle class and expanding infrastructure projects are further bolstering market growth. However, challenges such as fluctuating raw material prices and the need for improved energy infrastructure in some areas could impact market dynamics.

Key Market Drivers

Rapid Urbanization and Infrastructure Development

Urbanization is one of the most significant drivers of the ASEAN air conditioners market. Southeast Asia has been undergoing rapid urbanization, with a growing number of people moving from rural areas to cities in search of better economic opportunities and living conditions. This shift has led to increased demand for housing and commercial spaces, which, in turn, drives the need for air conditioning systems. For instance, according to TCL Electronics, a Chinese consumer electronics manufacturer, high temperatures are expected to drive increased purchases of new air conditioners and prompt maintenance of existing units. The Thai market is projected to grow by 30% this year as a result.

Countries such as Indonesia, Vietnam, Thailand, and the Philippines are witnessing a surge in urban population, leading to the expansion of residential and commercial infrastructure. The construction of high-rise buildings, shopping malls, offices, and other commercial establishments is fueling the demand for air conditioning systems that can maintain comfortable indoor climates in these densely populated urban areas.

Rising Disposable Incomes and Changing Lifestyles

The economic growth experienced by many ASEAN countries has led to a rise in disposable incomes, which is another critical driver of the air conditioners market. As people’s incomes increase, they have more purchasing power to invest in comfort-enhancing appliances like air conditioners. The growing middle class in ASEAN countries is particularly noteworthy, as this demographic group is increasingly able to afford modern conveniences, including air conditioning systems.

The change in lifestyle associated with higher incomes also plays a significant role. As people earn more, they tend to prioritize comfort and convenience, which has led to an increase in the adoption of air conditioners in both residential and commercial settings. In the residential sector, the shift from traditional forms of cooling, such as fans, to air conditioning is becoming more prevalent as households seek to enhance their living conditions. For instance, according to TCL Electronics, air conditioner sales reached approximately 47 million units in 2023.

In the commercial sector, rising disposable incomes have also led to an increase in spending on leisure and entertainment, resulting in the proliferation of air-conditioned shopping malls, restaurants, hotels, and other service-oriented establishments. According to the Economics Tourism and Sports Division, Thailand welcomed over 9.3 million foreign tourists in the first quarter of 2024, a 44% increase year-on-year. The government anticipates 35-40 million foreign tourists in 2024. The hospitality industry, in particular, is a significant consumer of air conditioning systems, driven by the demand for comfort in hotels and resorts frequented by both local and international tourists. For

Increasing Adoption of Energy-Efficient Technologies

Energy efficiency is becoming a top priority for consumers, businesses, and governments across the ASEAN region. With rising electricity costs and a growing awareness of environmental issues, there is a strong demand for air conditioners that consume less energy while maintaining optimal performance. This trend is particularly pronounced in urban areas, where energy consumption is higher due to dense populations and the widespread use of electrical appliances.

One of the most significant developments in this area is the adoption of inverter technology in air conditioners. Inverter air conditioners are more energy-efficient than traditional models because they regulate the speed of the compressor motor, adjusting it to the cooling demand rather than turning it on and off repeatedly. This leads to more consistent cooling, reduced energy consumption, and lower electricity bills for consumers. Inverter technology is rapidly becoming the standard in the ASEAN air conditioners market, with manufacturers increasingly focusing on offering models equipped with this feature.

Another aspect of this trend is the emphasis on products that meet or exceed local energy efficiency standards. Governments in the ASEAN region are implementing stricter regulations to promote the use of energy-efficient appliances, including air conditioners. These regulations often involve labeling schemes that provide consumers with information about the energy efficiency of different models, helping them make informed purchasing decisions. As a result, manufacturers are investing in research and development to produce air conditioners that comply with these standards while offering enhanced performance.                                                                                       

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Key Market Challenges

Fluctuating Raw Material Prices

One of the most pressing challenges for the ASEAN air conditioners market is the volatility in raw material prices. Air conditioners rely heavily on materials like copper, aluminum, steel, and various plastics, all of which are subject to price fluctuations due to global market dynamics. The cost of these materials can be affected by several factors, including geopolitical tensions, trade policies, and supply chain disruptions.

For instance, any significant fluctuation in copper prices can directly impact the cost of manufacturing air conditioners, as copper is a critical component in the production of compressors and heat exchangers. When raw material costs rise, manufacturers may be forced to increase the prices of their products, which can lead to reduced demand, particularly in price-sensitive markets like those in ASEAN countries.

Manufacturers in the region often face difficulties in passing on these increased costs to consumers due to intense competition and the presence of low-cost alternatives. This situation can erode profit margins and create financial strain on companies, especially smaller players in the market. Additionally, the reliance on imported raw materials makes the ASEAN air conditioners market vulnerable to global supply chain disruptions, further exacerbating the challenge of maintaining stable production costs.

Inadequate Energy Infrastructure

Another significant challenge in the ASEAN air conditioners market is the inadequacy of energy infrastructure in several countries within the region. As the demand for air conditioning systems grows, so does the strain on national power grids. In some ASEAN countries, particularly those with less developed infrastructure, the existing energy supply may struggle to meet the rising demand, leading to issues such as frequent power outages and voltage fluctuations.

This inadequacy poses a challenge for both consumers and manufacturers. For consumers, unreliable power supply can affect the performance of air conditioning systems, leading to dissatisfaction and reduced usage. For manufacturers, the need to design systems that can operate efficiently under suboptimal conditions adds complexity and cost to the production process.

The energy-intensive nature of air conditioning poses a broader challenge related to sustainability. The increased use of air conditioners contributes to higher electricity consumption, which, in many ASEAN countries, is still largely dependent on fossil fuels. This not only exacerbates environmental issues but also increases the overall cost of electricity, further burdening consumers and limiting the market’s growth potential.

Key Market Trends

Rise of Smart and Connected Air Conditioners

The digitalization of everyday appliances is another major trend in the ASEAN air conditioners market. The rise of smart and connected air conditioners reflects the growing consumer demand for convenience, control, and energy management. These advanced air conditioning systems can be integrated into smart home ecosystems, allowing users to control and monitor them remotely via smartphones, tablets, or voice-activated assistants. As per the Statista, air conditioner production in Malaysia increased year-on-year in 2023, with approximately 3.34 million units produced, up from 3.16 million in 2022. This rise in production is expected to further drive market demand for smart air conditioners in the country.

Smart air conditioners offer several benefits that appeal to tech-savvy consumers. They can be programmed to adjust settings based on occupancy or time of day, optimizing energy use and ensuring comfort. For example, users can set their air conditioner to start cooling their home shortly before they arrive, or to reduce energy consumption when the space is unoccupied. Additionally, smart air conditioners often feature sensors that monitor air quality, humidity, and temperature, providing real-time feedback to help maintain a comfortable indoor environment.

The integration of the Internet of Things (IoT) into air conditioning systems is also gaining momentum. IoT-enabled air conditioners can collect and analyze data on usage patterns, energy consumption, and maintenance needs, providing valuable insights to both users and manufacturers. This data-driven approach allows for predictive maintenance, reducing the likelihood of breakdowns and extending the lifespan of the units. As IoT technology becomes more prevalent, the adoption of smart air conditioners is expected to increase, particularly in urban areas where tech adoption is higher.

Growing Demand for Eco-Friendly Refrigerants

Environmental sustainability is becoming a critical concern in the ASEAN air conditioners market, driving the shift towards eco-friendly refrigerants. Traditional refrigerants like hydrofluorocarbons (HFCs) have been widely used in air conditioners for their cooling efficiency, but they are also potent greenhouse gases that contribute significantly to global warming. In response to international agreements like the Kigali Amendment to the Montreal Protocol, ASEAN countries are moving towards phasing out HFCs and adopting refrigerants with a lower global warming potential (GWP).

Refrigerants such as hydrofluoroolefins (HFOs) and natural alternatives like propane (R290) are gaining popularity as they offer similar cooling performance with a much lower environmental impact. The adoption of these eco-friendly refrigerants is being driven by both regulatory requirements and consumer demand for greener products. Manufacturers are increasingly focusing on developing air conditioners that use these low-GWP refrigerants, which not only help in reducing the carbon footprint but also align with the growing global emphasis on sustainability.

The shift towards eco-friendly refrigerants is also influencing the design and development of air conditioning systems. Manufacturers are investing in new technologies and processes to ensure that their products are both efficient and environmentally friendly. This includes redesigning components to accommodate the unique properties of alternative refrigerants and ensuring that systems meet stringent safety and performance standards.

Segmental Insights

Product Type Insights

Window air conditioners dominate the ASEAN air conditioners market due to their affordability, ease of installation, and suitability for the region's hot and humid climate. These units are particularly popular in densely populated urban areas where space constraints make them an ideal choice for residential buildings and small commercial spaces. Their compact design and straightforward installation process appeal to consumers looking for cost-effective cooling solutions without the need for extensive modifications to their living spaces.

Window air conditioners are known for their energy efficiency, making them attractive in a market increasingly focused on reducing energy consumption and lowering electricity bills. As a result, despite the growing interest in other types of air conditioning systems, window units continue to hold a significant share of the market, particularly among middle-income households and small businesses across the ASEAN region.

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Regional Insights

Indonesia dominated the ASEAN air conditioners market, driven by its large population, rapid urbanization, and rising middle class. As the region's most populous country, Indonesia has a vast and growing consumer base, particularly in urban centers like Jakarta, Surabaya, and Bandung, where the demand for air conditioning is surging due to the hot and humid climate.

The country's economic growth has led to increased disposable incomes, enabling more households to afford air conditioning units, especially in the residential sector. The expansion of commercial and industrial infrastructure further fuels demand for air conditioning systems in office buildings, shopping malls, and factories.

Indonesia's strong focus on infrastructure development, combined with government initiatives promoting energy-efficient appliances, also contributes to the growth of the air conditioners market. As a result, Indonesia is a key player in the ASEAN market, setting trends and driving demand across the region.

Recent Developments

• In 2024, Panasonic introduces four new Inverter Air Conditioner series: the X-Deluxe Inverter Series, Smart Inverter Series, Standard Inverter Series, and Eco Inverter Series. Designed to address rising energy costs and the growing demand for comfortable, healthy living environments, these latest models exemplify Panasonic's commitment to innovation and reliability in air conditioning solutions.

• In 2023, PT. LG Electronics Indonesia (LG) unveiled two new air conditioning products, the LG Multi V i and LG Multi V5 Pro II, in Jakarta. These advanced solutions are specifically designed to meet the needs of medium and high-rise buildings, including offices, schools, shopping centers, apartments, and hotels.

• In 2023, Nagakawa Corporation officially launched a commercial air conditioner range with a capacity of up to 144HP (1,376,000 BTU/h), solidifying its leading position in the electrical refrigeration sector in the Vietnamese market.

Key Market Players

• LG Corporation
• Panasonic Corporation
• Samsung Electronics Co., Ltd.
• Sharp Corporation
• Daikin Industries, Ltd. 
• Johnson Controls International plc
• Carrier Global Corporation
• Gree Electric Appliances Inc. of Zhuhai
• Mitsubishi Electric Corporation
• Haier Group Corporation

Report Scope:

In this report, the ASEAN Air Conditioners Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• ASEAN Air Conditioners Market, By Product Type:

o   Splits

o   Windows

o   Ducted Systems

o   VRF Systems

o   Chillers Systems

o   Others

• ASEAN Air Conditioners Market, By End Use:

o   Commercial/ Industrial

o   Residential

• ASEAN Air Conditioners Market, By Country:

o   Indonesia

o   Vietnam

o   Thailand

o   Malaysia

o   Philippines

o   Singapore

o   Cambodia

o   Brunei

o   Myanmar

o   Laos

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the ASEAN Air Conditioners Market.

Available Customizations:

ASEAN Air Conditioners Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).