Summer trend: Spike in AC demand triggers inventory concerns

Bengaluru: As the mercury soars, white goods makers and the tourism industry are already experiencing a matching scale up in their sales. And the summer has only begun. 

While South India has typically preceded the northern parts of the country into the searing season, the sale volume of cooling products have their vendors worried as they face up to possibilities of inventory shortage.

“The sales we saw in the last 7-10 days of March cut into our inventory level. With the prediction of a strong summer by the Indian Meteorological Department, we feel there will be a shortage of air conditioners as we enter the second or third week of May,” said Nilesh Gupta, Director, Vijay Sales, the retailing chain with pan-India presence. 

Gupta said that year-on-year growth in AC sales was between 8-9% in the January-March quarter and the overall growth during financial year 2024-25 is expected to range around 20%.  

Likewise, manufacturers are preparing for a long summer season. Onida saw a whopping 283% year-on-year jump in air conditioner sales across Karnataka in the March quarter, company General Manager Sheel Kashyap, told DH. The state has been weathering heatwaves in certain parts and Bengaluru too saw some unprecedented highs in its March-April temperatures. ACs are no longer a luxury & improved purchasing power and cheaper options are keeping the markets busy

“Price points of air conditioners have fallen (owing to innovation), therefore a lot more people are able to afford them and hence the category’s relevance is much higher in terms of the number of customers,” said Anand Ramanathan, Partner at Deloitte India.

Cooler climes are hotspots

In their bid to escape the heat Indians are either heading for the hills in the country or foreign shores.

“We can see, especially on the domestic front, there is an inclination towards cooler locations,” Prahlad Krishnamurthi, Chief Business Officer, Cleartrip, said.

This month, Toronto and London featured among popular international destinations for bookings on Cleartrip.com. At home, Srinagar, Bagdogra, and Dehradun saw an increase in searches and bookings.

According to a survey by Booking.com, 50% of Indian travellers stated that they would like to take a trip to the hills this year. Additionally, 57% of Indians are looking at a long domestic trip while 43% want to take a long international trip (5+ nights) this year, and most top destinations are ones with a colder climate. 

Within India, the top 4 destinations included Ooty, Srinagar, Manali, and Darjeeling. Apart from this, Kodaikanal, Rishikesh, Munnar and Mussoorie are also faring as crowd pullers this year, as per the survey. 

“As summer unfolds, mountain destinations are currently the top choice for leisure travellers, with Manali being the preferred destination followed by Nainital, Kashmir, and Mussoorie,” said a spokesperson from hospitality chain OYO. 

This summer, 40% of India’s international  travellers are seeking destinations in North America and Europe, while another 40% are looking at the Asia Pacific region and 20% at the Middle East. London, Paris, New York and Amsterdam are leading choices this year.

Water woes are adding to the Bengalurians’ urge to head out of town, even if just to neighbouring areas. “We are observing a higher-than-usual demand for travel from Bangalore, which extends beyond major leisure destinations. While leisure spots remain popular, people are also booking trips to nearby small towns and villages for a much-needed getaway,” as per OYO.