In recent years, summer heat and heat waves in Bangladesh have intensified. According to the World Bank, between 2018 and 2022, the temperature in Bangladesh during the summer months rose by an average of 0.9 degrees Celsius compared to the 1986-2005 baseline, which is higher than the global average increase of 0.2 degrees Celsius. In April 2024, Bangladesh experienced a record-breaking heatwave lasting 24 consecutive days. As a result, the demand for air conditioners (ACs) has surged over the past few years. Once considered a luxury home appliance, ACs have now become a necessity. Currently, around 650,000 AC units are sold annually, and the market size has exceeded 6,000 crore BDT. Approximately 20 local and international brands serve this growing market, and according to Walton, the domestic electronics giant, they are leading the market in Bangladesh’s AC segment. But how did Walton, a local brand, rise to the top?
Overview
In the past, most home appliances in Bangladesh were import-dependent. In the late 1990s, Walton and several other local companies started manufacturing various electronic products domestically. Initially, these companies focused on assembling refrigerators, freezers, televisions, and mobile phones by importing electronic components and parts. This allowed them to offer products at lower prices compared to international brands, which attracted consumers to local brands. When Chinese-branded mobile phones flooded the market in 2014-15, local brands shifted their focus to refrigerators and televisions. As a result, today, 97% of refrigerators sold in Bangladesh are either manufactured or assembled locally, with Walton holding a 75% share of the refrigerator market. Similarly, local brands dominate the television market, with Walton holding a 30% market share.
During the 1980s and 90s, refrigerators and televisions were considered luxury home appliances. However, after 2000, they became essential household items across the country. Similarly, a decade ago, ACs were considered luxury electronics. In 2020, around 300,000 AC units were sold in Bangladesh, but by 2023, sales had increased to 650,000 units, bringing the market size to 6,000 crore BDT. In 2004, Electro Mart entered into a joint venture with Chinese home appliance brand Gree to begin assembling ACs in Bangladesh, although demand for ACs was limited at the time, with only 30,000 units sold annually. In 2007, Walton Hi-Tech Industries Ltd. was established, and alongside refrigerators and freezers, the company began manufacturing air conditioners. In 2011, Walton made its first export of “Made in Bangladesh” AC units. Building on this success, in 2017, Walton expanded into the production of commercial ACs, thanks to the efforts of its skilled research and innovation team. In 2020, Walton became the first company in Bangladesh and the ninth in the world to manufacture Variable Refrigerant Flow (VRF) systems.
How Walton is Getting Ahead
Before 2000, all ACs in Bangladesh were imported, with brands like General, Carrier, Daikin, Hitachi, Samsung, LG, and Panasonic dominating the market. ACs were considered luxury items at the time, and due to import dependence, only the affluent could afford them. However, after 2000, when Chinese brands began local assembly, the price of ACs gradually started to decrease.
In 2008, Bangladesh’s per capita income was just $630, and most consumers couldn’t afford luxury home appliances like ACs. By 2015, per capita income had nearly doubled to around $1,236, increasing people’s purchasing power. Walton, focusing on full-fledged manufacturing, gradually increased its manufacturing capacity. Today, Walton manufactures nearly every part of an AC locally, except for resin. On the other hand, international brands still import most components and assemble them locally, which makes Walton’s products more affordable compared to international brands.
International brands design their products with global customers in mind, which means they often include unnecessary features or lack necessary ones for Bangladeshi customers. This leads to higher product prices, and consumers often don’t use all the features. In 2019, Walton released its first AC unit with a fully local design. After identifying some shortcomings, Walton established a dedicated research and innovation team, composed of talented individuals from reputable educational institutions, to continuously research how to provide better-quality ACs with features tailored to Bangladeshi customers’ needs.
Currently, Walton’s AC research and innovation team has over 100 researchers. Thanks to their efforts, Walton is the only brand in the country offering 6-star energy-saving AC units, which are more energy-efficient than any other brand available in the Bangladeshi market. Walton designs its products and selects features based on local customer preferences and usage patterns. While some brands may offer a cooling and heating feature, others might include self-cleaning, clean indoor air, smartphone app control, or other features. Walton has incorporated all these features into its AC units. Walton also became the first company to introduce offline voice-controlled AC units in both Bangla and English. To address the negative impacts of global warming, the company uses R32 refrigerant in its ACs. Additionally, Walton has launched solar hybrid ACs, which not only help customers save on electricity bills but also support sustainability for the environment. Walton has always emphasized manufacturing products in Bangladesh to international standards, which is why their ACs now include digital displays. Despite offering more features compared to other brands, Walton still offers its products at competitive prices. In fact, Walton’s affordable pricing has compelled other brands to lower their prices.
In addition to offering affordable and quality products, Walton has focused on brand building. Foreign brands have long enjoyed customer preference due to their brand value and reliability. However, by 2011, Walton had already established trust among customers regarding the quality and service of their refrigerators. Walton built similar trust with ACs by being the first to offer a 1-year replacement warranty. One of the biggest challenges in the electronics industry is providing proper after-sales service, and because Walton was the first to begin full-fledged AC manufacturing in the country, it could offer immediate and better support to customers. Walton has already expanded its service centers across the country, with over 80 ISO-certified service centers and more than 3,000 service experts for AC servicing. Due to Walton’s affordable, quality products and reliable service, customers are increasingly preferring Walton ACs.
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