Current situation and prospects of the Russian market of air conditioning equipment

The 2023 results were unexpected in some segments of the air conditioning market. In this article, you will learn what to expect in 2024

The transformation of the Russian market for climatic equipment continued last year. Despite a relatively cool summer in central Russia and the south of the country, demand for household air conditioners increased. The market is gradually being reshaped by new players, with established brands gradually being replaced. Let's consider the outlook for the Russian market for climate equipment in 2024.

2023 Results And Current Situation On The Russian Climate Equipment Market

According to expert estimates, the total size of the climate equipment market in 2023 exceeded 3 million units, a 15% increase compared to 2022. This represents a record sales figure. Interestingly, Russia accounted for a greater number of split-system purchases in 2023 than any other European country, including Turkey, Spain, and Italy. Russia is currently the third largest market in Europe for VRF systems, with over 26,000 units sold in 2023. One of the reasons for this trend is the active construction of housing, including the high-budget segment, where such solutions are in demand.

Even the cool summer did not hinder the growth of the Russian climate equipment market: the heat wave arrived in the European part of Russia and the southern regions only in August, while June and July were quite cool. A few years ago, this factor would have led to market shrinkage or, in case of an optimistic development of events, to its gradual stagnation. The reason for this trend is understandable. In the current climate of uncertainty and volatility of the Russian currency, whose exchange rate fluctuations have a direct impact on the cost of imported devices, a number of customers (both individuals and legal entities) are opting to purchase "here and now," without postponing their decision for the future. In light of the evolving landscape of the domestic climate systems market, it is evident that sales of chillers have witnessed a notable surge. In 2023, sales of these products increased by 40% compared to 2022.

In addition to sales growth, the replacement of obsolete equipment also increased in 2023. In 2023, many customers seized the opportunity to upgrade their climate systems. A significant proportion of these purchases were made between 2005 and 2011, a period of rapid growth in this segment. It is important to note that in 2023, the climate equipment market will continue to be segmented. In the most affordable and mass-priced category, Chinese and Russian brands maintained their market share, while European, Japanese, and Korean manufacturers shifted their focus to the premium or luxury segment.

The upward trend in demand for climate equipment continued into 2024. According to the research conducted by M.Video-Eldorado, the demand for air conditioners and split-systems increased by 25% in March 2024 compared to the same month last year. In turn, demand for these devices increased by 20% in the first three months of 2024 compared to the same period in 2023.

Main Trends Of 2024 In The Russian Market Of Climate Systems

In light of the current market conditions, it is notable that market participants have generally adapted to prevailing market conditions in the Russian climate equipment market in 2024. However, there remain opportunities for growth in the middle and high price segments, where there is currently less competition.

Among the most in demand solutions on the market of climate systems, we can distinguish the following product categories: First and foremost, these are what are commonly referred to as "smart" systems. These systems are fully integrated into a smart home and controlled by a special application on a gadget with an intuitive interface. This ensures the coordinated operation of all engineering systems, allowing the owner of the house or apartment to monitor their work in real time and plan their maintenance. Furthermore, "smart" systems are capable of self-learning and flexible adjustment to the varying preferences of the property owner. Energy saving and energy efficiency are crucial. These solutions are not just about being responsible to the environment; they also save resources.

The coronavirus pandemic has led to a surge in demand for devices that can improve indoor air quality. This is especially relevant in the conditions of megacities. Earlier, such options were presented mainly in the high-budget segment. However, as technology develops, they are appearing in devices of the middle price range as well.

It is currently premature to discuss the possibility of a significant increase in the price of climate control equipment. While inflation and the continued high volatility of the Russian currency are contributing factors, it is unlikely that prices will rise above the rate of inflation by the end of the year.

AIRVent Exhibition — An Opportunity to Make a Name for Yourself on The Russian Market

The Russian market offers promising growth opportunities, with segments exhibiting low levels of competition. This presents an attractive entry point for new foreign players seeking to expand into the Russian market. However, it is crucial to understand the market's key trends and identify reliable partners to ensure a successful entry.

The 3rd International Exhibition of Equipment, Technologies and Services for Ventilation, Air Conditioning and Refrigeration of Domestic, Commercial and Industrial Facilities, AIRVent, will assist in the resolution of critical business issues. This is an effective platform for communication between climate market players, including manufacturers and suppliers of climate equipment, and interested specialists.

In 2024, 120 companies participated in the exhibition, with 70% of them making their debut appearance. The exhibition attracted a total of 7,500 attendees, representing a 48% increase compared to last year's figure. The survey of participants also confirmed the efficiency of the exhibition. Ninety percent of them were satisfied with their participation in AIRVent 2024.