Asia Pacific Commercial Air Conditioner Market Size, Share & COVID-19 Impact Analysis, By Type (Packaged AC and VRF/VRV), By Refrigerant (R-32, R-410A/R-407C, R-600A/R-290, and Others), By End-User (Healthcare, Educational/Institutional, Public/Government, Retail, Hospitality, and Manufacturing), and Country Forecast, 2022-2029

The Asia Pacific commercial air conditioner market size was valued at USD 12.18 billion in 2021. The market is projected to grow from USD 12.67 billion in 2022 to USD 17.21 billion in 2029, exhibiting a CAGR of 4.5% during the forecast period. The regional COVID-19 pandemic has been unprecedented and staggering, with experiencing higher-than-anticipated demand across all countries compared to pre-pandemic levels. Based on our analysis, the market exhibited a rise of 3.1% in 2020 compared to 2019.

Governmental plans by Indonesia, Vietnam, and others and growing Foreign Direct Investment (FDI) in several South-East Asian countries in the commercial infrastructure sector are set to increase the demand for air conditioners across healthcare facilities and offices and educational buildings during the forecast period. Moreover, in recent years, the green building concept, i.e., zero-energy consuming building, provides commercial builders opportunities across Malaysia, Thailand, Singapore, and other Southeast Asian countries to install air conditioners with low global warming effects. Therefore, the fast-tracked green building concept provides ample growth opportunities in the regional market.

COVID-19 IMPACT

COVID-19 to Hamper Manufacturing Sector’s Trading Activities and Hinder Growth

The impact of COVID-19 pandemic is unprecedented, not only in Asia Pacific but worldwide. The pandemic has placed pronounced stress on manufacturing & political sectors and eventually promoted health emergencies in South-East Asia, sparking uncertainty and vulnerability. In July 2020, the United Nations ESCAP (UN ESCAP) stated that more than half of the sub-region countries, such as Myanmar, Indonesia, Malaysia, and the Philippines, are vulnerable due to weak health systems. The United Nations Conference on Trade and Development (UNCTAD) states that the majorly impacted economies across Asia Pacific are Taiwan-Province of China (office machinery and communication equipment), the Republic of Korea (machinery equipment), Japan (machinery and automotive), and Vietnam (communication equipment).

COVID-19 has moderately affected the air conditioner business across commercial applications in the region. Air conditioning repairing activities such as fixing air conditioned units and changing the operation of Heating, Ventilation, and Air Conditioning (HVAC) systems have been halted for more than six months due to the unavailability of workers. However, the COVID-19 pandemic has exposed the fragility by interrupting cross-border trades and transport of air conditioner units, resulting in a drastic impact on the number of units sold. The UN ESCAP stated that nearly 40% of Southeast Asia’s exports rely on the global value chain. This has impacted the units sold across the region and globe.

LATEST TRENDS

Utilization of Energy-efficient Inverter Air Conditioners (AC) is Boosting the Market Growth

Energy-efficient inverter air conditioners are becoming a trend across developing countries, such as Myanmar, the Philippines, India, and others. Installing inverter ACs across commercial spaces resolves difficulties, such as severe energy shortages due to rapid economic growth, and thus, supports lowering the global warming impacts. Additionally, by utilizing the low global warming refrigerants, such as R-32 and others in inverter ACs, manufacturers can reduce the CO2 equivalent and convey the heat efficiently.

An inverter air conditioner utilizes the inverter technology for controlling the current, voltage, and frequency of the air conditioning mechanisms. As per the secondary resources, it consumes about ~30% less electricity than a non-inverter air conditioner. This factor is eventually boosting its installation across offices, laboratories, and schools.

DRIVING FACTORS

Surging Construction Projects to Boost the Market Growth

The penetration of air conditioners across Southeast Asian countries, such as Vietnam, Thailand, Indonesia, Malaysia, the Philippines, and China, is witnessing growth due to augmented construction development projects. Increasing infrastructural activities and the emerging tourism industry are also expected to boost this market. For instance, the World Economic Forum (WEF) stated that in 2019, approximately 40% of the international tourists arrived in Southeast Asia, with Vietnam and Thailand being the most visited countries.

China is one of the biggest markets for packaged air conditioners in the commercial sector. It is attributed to the presence of Chinese manufacturers that offer ACs at a much lower price than the leading manufacturers across the Southeast Asian countries, resulting in capturing a large customer base.

RESTRAINING FACTORS

Threat of Refrigerants Causing Global Warming May Obstruct Growth

Various harmful refrigerants are utilized in commercial air conditioners (CAC) such as R-410A and R-12. These have a high global warming potential (GWP), a serious concern regarding the environment. The high emission ratios and potential greenhouse impact make it even worse for India, Myanmar, Thailand, and others with warm environmental conditions throughout the year. As per the secondary resources, one kg of R-410A refrigerant has the same environmental impact as two tonnes of CO2, i.e., equivalent to a running car for almost six months. Southeast Asian economies, such as Thailand and Myanmar, have set rules to avoid/minimize utilizing R-410A refrigerant with resulting negative climatic effects. Hence, the utilization of refrigerants with high GWP is hampering the Asia Pacific commercial air conditioner market growth.

SEGMENTATION

By Type Analysis

VRF/VRV Segment to Show Highest Growth Backed by Usage in Zoning Applications

By type, this industry is bifurcated into packaged AC and VRF/VRV. Amongst these, the VRF/VRV segment is expected to grow exponentially in the Asia Pacific commercial AC market, as it can regulate the refrigerant volume provided to units of fan-coil positioned throughout the buildings. These systems are ideal for the essential requirement of zoning applications. Thus, it is anticipated to witness the highest growth in the forecast period.

The packaged AC segment is estimated to have a major portion of the market share owing to the rising trend of packaged commercial AC implementation, along with the other AC components that offer air conditioning and air handling at the same time.

By Refrigerant Analysis

R-32 Refrigerant Segment to Witness Highest Growth owing to its High Efficiency

In terms of refrigerant, the Asia Pacific commercial air conditioner market is further segmented into R-32, R-410A/R-407C, R-600A/R-290, and others (R-22 and others). The R-32 refrigerant segment is anticipated to grow at a higher rate in the commercial AC market in Asia Pacific, as it efficiently conveys the heat and minimizes electricity consumption, with the least global warming potential (GWP) rate.

The R-410A/R-407C refrigerant segment holds the largest market share in terms of the regional industry analysis, as this refrigerant has been highly used for decades across the HVAC industry. Moreover, R-600A/R-290 and other (R-22) refrigerants are likely to witness stagnant growth in the upcoming years, owing to their harmful emissions becoming a cause of rising global warming.

By End-User Analysis

Increasing Adoption of AC is Influencing the Demand Across the Healthcare Segment

In terms of end-user, the market is further segmented into healthcare, educational/institutional, public/government, retail, hospitality, and manufacturing. The healthcare segment is projected to witness exponential market growth in the near future with the rising awareness of healthcare systems in rural and underdeveloped areas. The hospitality sector is anticipated to forecast progressive growth with the surging commercial real estate sector in Indonesia, Vietnam, and Malaysia.

Moreover, the retail segment is anticipated to grow at a higher rate in the regional market due to rise in the standard of living and dependence on ready-to-eat food products. Furthermore, the educational, manufacturing, and public/government sectors are likely to observe stable growth with limited applications of commercial air conditioners.

COUNTRY INSIGHTS

This industry is fragmented and highly competitive, with the presence of many established and emerging players. The market growth is complemented by rising government incentives, surging demand for energy-efficient solutions, and an increasing trend of green building initiatives. Additionally, utilizing technologies, such as automated control systems, the Internet of Things (IoT), and remote control access, provide real-time information about the system’s condition to operators.

India to Witness Highest Growth Due to Rising Demand for Commercial AC in Healthcare & Retail Sectors

India is projected to witness the highest CAGR over the forecast period in this industry, with increasing healthcare, hospitality, and retail sectors. With unfavorable climatic conditions, commercial air conditioners have the highest demand across the country’s commercial applications. Moreover, the growing number of infrastructure projects and building professionals emphasize on reducing energy consumption by utilizing building automation systems and technological advancements across VRVs and packaged air conditioners. These include the IoT, Wi-Fi-enabled systems, smart homes, and industry 4.0.

KEY INDUSTRY PLAYERS

DAIKIN INDUSTRIES, Ltd. and Mitsubishi Electric Corporation to Opt for Innovative Sales Strategies for Business Expansion

Leading manufacturers in this industry are enhancing their after-sales service systems to strengthen the product reach across unattainable markets in the region. For instance, in January 2019, DAIKIN INDUSTRIES, Ltd. (Headquartered in Osaka, Japan) attended ‘AHR Expo 2019’ to showcase its advanced residential and commercial HVAC equipment to provide superior air quality to end-users. Similarly, in January 2019, Mitsubishi Electric Corporation’s Indian subsidiary, ‘Mitsubishi Electric India (MEI),’ inaugurated its service showroom named ‘MEQ Senmonka’ to cater to after-sales services and build long-term relationships with end-users.

Also, key players are focusing on enhancing product offerings through mergers & acquisitions and expansion of production management systems. For instance, in March 2019, LG Electronics Tianjin Appliances Co., Ltd. acquired QINGGONGLIAN ELECTRICAL INSTALLATION ENGINEERING CO., LTD. to shelter the competitiveness of installation and sales of air conditioners across applications in China.

LIST OF KEY COMPANIES PROFILED:

• Carrier (U.S.)


• DAIKIN INDUSTRIES, Ltd. (Japan)


• Johnson Controls (Ireland)


• Mitsubishi Electric Corporation (Japan)


• LG Electronics (South Korea)


• SAMSUNG (South Korea)


• Trane (Ingersoll Rand) (Ireland)


• Blue Star Limited (India)


• FUJITSU (Japan)


• AIREDALE INTERNATIONAL AIR CONDITIONING LTD. (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• August 2020: Johnson Controls introduced NexusPremier 25-50 tons commercial rooftop line. The new systems are a part of its standard efficiency models that comply with stringent Department of Energy (DOE) 2023 energy efficiency standards.


• October 2020: Blue Star Limited announced a new range of air conditioning solutions with Virus Detection Technology for commercial places such as cinemas, ATMs, malls, airports, and others.

REPORT COVERAGE

The market research report offers an in-depth analysis and further provides details on the adoption across several regions. Information on key market trends, drivers, opportunities, threats, and market restraints can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players along with their strategies.

Report Scope & Segmentation