Growth of Asia Pacific Condensing Unit Market
The rapid growth of the retail and industrial sectors across the Asia Pacific region has been a major driver for increased demand of condensing units in the area. Countries like China, India, Indonesia, and Vietnam are witnessing strong economic growth which has led to rapid expansion of malls, supermarkets, warehouses and manufacturing facilities. All of these commercial establishments require efficient and reliable cooling solutions to maintain optimal indoor temperatures for customers, employees and sensitive electronic equipment and inventory. Condensing units have emerged as the preferred choice for providing both heating and cooling in such environments.
According to a recent report by XYZ Research, the Asia Pacific Condensing Unit market is projected to grow at a CAGR of over 5% during 2020-2025. Increased investments in infrastructure projects, rising disposable incomes, and expansion of real estate are some of the major macroeconomic factors propelling market growth. Various policy initiatives by governments in the region to promote industrialization through trade agreements and favorable business regulations have also supported the growth of end-use verticals requiring condensing units on a large scale.
Growing Demand from Commercial Refrigeration Sector
The commercial refrigeration industry has been one of the largest consumers of condensing units in the Asia Pacific region. Expanding organized retail sector with establishment of hypermarkets, convenience stores and quick service restaurants are driving up installations of refrigeration systems. Refrigeration equipment like display cases, walk-in coolers and freezers use remote condensing units which regulate temperatures for storing perishable foods and beverages. Rising health consciousness and changing lifestyles have increased the demand for frozen and chilled food products in developing countries, thus boosting the sales of commercial refrigeration equipment as well as condensing units.
Rapid growth of the food retail industry coupled with increasing disposable incomes have modernized shopping behavior in countries like India and Vietnam. This has encouraged retailers to enhance their product offerings by incorporating refrigerated food sections. Supermarkets and hypermarkets are investing heavily in capital-intensive refrigeration solutions to meet rising demand and assure food quality and safety standards, thereby augmenting sales of condensing units in the commercial refrigeration space.
Rising Adoption in Industrial Facilities
Condensing units are significantly gaining traction in industrial facilities for process cooling applications across various manufacturing verticals including automotive, food processing, plastic, chemical and pharmaceutical industries. Strict regulations regarding workplace safety and optimal production environment have increased the installation of condensing-based HVAC systems in factories. Industrialists are prompted to adopt energy-efficient cooling technologies for minimizing operational costs as well as complying with country-specific energy consumption norms.
Developing nations in the Asia Pacific region are witnessing rapid infrastructure growth through ambitious industrialization projects, especially in China and India. This has augmented demand for general purpose air conditioners, central AC units, package units, split AC units and condensing units across warehouses, production floors and back office administration areas. Moreover, increasing exports from developing Asian countries have expanded the scale of operations leading to larger facility areas requiring stable temperature and humidity control using condensing units.
Rise of the Data Center Industry
The deployment of 5G networks, proliferation of cloud computing services as well as widespread use of internet-connected smart devices have boosted the growth of the data center industry in the Asia Pacific region. In the past few years, meteoric rise in digitalization of business processes across industries has necessitated greater investment by colocation providers and hyperscalers in setting up new facilities or expanding the rack capacity of existing ones.
Data centers have stringent cooling requirements to ensure optimal operation of servers and networking equipment. Condensing units are critical in extracting excess heat from large computer rooms while maintaining temperature and humidity at desired set points. They are either integrated with computer room air conditioning (CRAC) units or operate independently based on the scale and criticality of the facilities. Rapid establishment of hyperscale cloud regions and edge data centers throughout Asia Pacific by tech giants has significantly driven the regional condensing unit market in this domain.
Government Push for Energy Efficiency
Many Asia Pacific countries have put effective policies and incentive schemes in place to encourage adoption of energy-efficient cooling equipment including condensing units. Rising concerns over carbon emissions and need to curb greenhouse gases have prompted governments to promote condensing technology over conventional products. For example, India has instituted BEE (Bureau of Energy Efficiency) energy standards for room air conditioners under which only 5-star rated devices can be manufactured and sold in the country from January 2023.
Similarly, ongoing initiatives like the Perform Achieve and Trade scheme and standards & labelling program in China have created awareness regarding energy performance of appliances. Consumers are inclined towards purchasing star labelled products with lower power consumption. Besides, incentives like tax exemptions and subsidies on energy-efficient AC units under Perform, Achieve and Trade in China and Standards & Labelling in India have made condensing technology more affordable in these countries, thereby expanding the customer base significantly.
Competitive Landscape
The Asia Pacific condensing unit industry comprises both international players and regional/domestic manufacturers. Some of the leading companies operating in the market space include Daikin, Mitsubishi Electric, Carrier, Trane, Johnson Controls, and Blue Star among others. Market leaders are focusing on R&D investments to develop innovative products with advanced features like variable speed control, free cooling modes and ECM (electronically commutated motor) technology for gaining competitive edge.
In Summary, mid-size and local players in developing countries are expanding their manufacturing capacities as well as distribution networks to grab greater market share. Intensifying competition has also prompted companies to boost exports from their Asia Pacific production bases to other regions to sustain growth. Mergers and acquisitions along with collaborative efforts are expected to remain mainstream business strategies among industry players to establish stronger presence across the value chain and address growing demand.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
