Refrigeration equipment: prospects for the development of the Russian market
Over the past almost two years, the Russian refrigeration equipment market has undergone a number of significant changes. This applies not only to product lines or brands, but also to certain trends in its development. Looking ahead, we note that in the coming years it has good prospects for exceeding pre-pandemic indicators.
Current Market State
The volume of the Russian refrigeration equipment market is estimated at 500 billion rubles by the end of 2022 - beginning of 2023. Its peculiarity is a significant share of imported components: more than 70% of the equipment on the market is assembled from foreign components. Another 20% of products are imported, while Russian products account for no more than 10%.
Over the past 3 years, Chinese manufacturers have taken the leading positions in the import of refrigeration equipment on the Russian market. They account for more than 70% of the total supply. They are followed with a significant lag by Turkey and Belarus. The total volume of imports exceeded $1.5 billion by the end of 2022.
One of the main problems of the Russian refrigeration equipment market is the insufficient localization of production of both the products themselves and components. After the collapse of the USSR, the production base is at the initial stage of development and does not fully meet the needs of the market. This applies not only to the production of refrigeration equipment, but also to components, consumables, and lubricants.
What will the market be like?
The departure of European, Japanese and American suppliers of equipment and components has given players from other countries a chance. First of all, these are Turkey and China, but the emergence of Iranian, Indian and South African manufacturers is quite likely. Moreover, some Italian and Spanish companies are seeking to enter the recovering Russian market. It is interesting that among these players there are also those who once worked in Russia, but left the market, unable to withstand the competition with larger players. By retaining part of their client base, they have a good chance to occupy their niche. In total, new players may well gain a foothold in 10-15% of the renewed Russian market due to a developed technological base and investments in the development of a partner and client network.
The share of Russian refrigeration equipment in recent years is unlikely to exceed 12-15%. The fact is that some companies are still engaged in “badge engineering”, while another part produces equipment from imported components. The launch of new enterprises for the production of components can hardly be expected in 6-10 months: the construction of a plant requires approximately a year and a half, plus 2-3 months for installation and commissioning of equipment. At the same time, there was no mass start of work on new facilities in the second and third quarters of last year.
The main driver for the development of refrigeration equipment for trade will be the further penetration of network technologies into the regions. Due to this, we can expect the emergence of new products, primarily Chinese and local production. The commercial refrigeration segment is not going to see major changes anytime soon. The trend towards Chinese manufacturers displacing products from European and American companies has been observed over the past 3-4 years. However, there is intensification of processes: if at the end of the 2010s it took several years to form a positive reputation, now it takes several months.
The household refrigerator segment was least affected by the sanctions. Undoubtedly, manufacturers of premium products from Europe and Asia have left Russia, but their products can also be introduced through parallel imports. More than 85% of household refrigerators imported to Russia are made in China and Belarus. The situation with the component base has also normalized: there are no problems with the supply of heat exchangers, housings and compressors. Moreover, Panasonic’s compressor production capacity was recently purchased by a Chinese company.
AIRVent 2024 – an opportunity to represent your company and find new partners
The transformation of the Russian refrigeration equipment market opens up vast opportunities for both consumers and suppliers. The former have the opportunity to find new equipment from new players and thus save money, while the latter have the opportunity to enter and gain a foothold in a new market. All that’s left to do is help suppliers and consumers find each other. The solution would be to participate in industry events, for example, at the AIRVent exhibition.
This event is a unique B2B platform, within which market participants and buyers can not only get acquainted with the latest trends and industry insiders, but also solve key business problems. Representatives of companies (both manufacturers and buyers) who are highly motivated to cooperate take part in the exhibition, which ensures the effectiveness of negotiations.
In 2023, the AIRVent exhibition was held for the first time, but has already aroused significant interest among the industry community. It was visited by 5,068 specialists, and the goals of 95% of them were to search for potential partners and obtain information about market trends.