Marketing Water Misting Fans in India: TPI Corporation

Industry Outlook: India's Cooling Appliance Market

The market in India for water fans — also called misting fans — is problematic at best. Without doubt, the climate (except in the northern mountains) is hot; the problem is that it is also quite humid. Still, the Indian people have been looking for ways to stay cool for centuries. It was India that gave the world the slatted shutter: when air comes in through small spaces — as in shutters, adopted in the American South before air conditioning, or in lattice-work walls as in parts of India — it is cooled. Indians did not, however, develop a cooling system like that of the ancient Romans, which used water running through channels to create condensation. The reason, of course, is the problem of water quality. While industrial pollution has now added immeasurably to water quality problems in India, the sluggish flow of its rivers had always rendered free-flowing water murky at best.

These are historical impediments to using water or misting fans in India. There is also the problem of intermittent electrical outages common to virtually all less developed countries (LDCs). There is also the price factor: in a nation just beginning to attract good-paying jobs from overseas firms, there could be a reluctance to spend on cooling for the home — both to conserve cash flow and because newly employed professionals who could afford it might conclude that air conditioning at work is sufficient.

Still, there is an air-conditioning "war" going on in India at present, with giant electrical appliance company Voltas at the center of it.

In six weeks spanning April and May 2004, Voltas sold 7,000 of its "super-cheap" 0.8-tonne and 0.6-tonne air conditioners. The price for the 0.6-tonne unit: an eye-catching Rs 9,999. In 2003, the summer was unaccountably cool and Voltas had only weak growth. In 2004, however, the company expected growth of 25%, pushing sales up from 800,000 units in 2003–04 to around the 1 million mark for 2004–05. However, it was being beaten by Korean giant LG, which took the top spot with 29% of the market.

While Voltas is working to hold its prices below the "magic" Rs 10,000 mark, some companies are competing on convenience. In a price-sensitive market where no one wants to spend an extra rupee on electricity, LG allows homeowners who purchase its top-of-the-line Whisen model to phone a number that will automatically and remotely switch on their unit — so that they can return to a cool home without running the unit while they are away at work or elsewhere. Voltas also acknowledges that "electricity consumption is more important than any other feature in the customer's mind."

That, in fact, is the main opening for truly inexpensive units such as the TPI Corporation 18-inch Self-Contained Power Mister. The opportunity is supported by a market study by Rama Bijapurkar, which concluded that "if monthly bills for air conditioners could be brought to less than Rs 1,000, the overall market would triple to 3 million annually."

While Bijapurkar was speaking of air conditioners specifically and not portable water fans, these units are designed for on-demand use and should therefore command a robust market share as well. In addition, those who choose air conditioning often want to bridge seasons with minimal cooling during parts of the year when it is wasteful to run a whole-house unit. There is also likely to be a burgeoning market for water fans among apartment dwellers and renters, particularly as the Indian economy attracts more industry employing young people living independently. Water fans could plausibly capture a share of the room air-conditioner market, which currently accounts for about 20% of total cooling sales — with the cheapest LG room unit selling for almost twice the cost of Voltas's whole-house units, at Rs 17,500.

Product Information and Description

While TPI Corporation produces a number of models, the one it plans to introduce in India is its 18-inch Self-Contained Power Mister. This unit uses a 1-speed, 1-phase, 120-volt motor. It has a simple toggle switch for fan-only or fan-and-mist operation, and a 130 psi diaphragm pump. It can be mounted in various configurations to obtain a water supply; one of the most popular arrangements is mounting it on top of a 10-gallon cooler-style container. It can also be mounted on plastic drums. While not the most elegant-looking unit, it is possibly the most versatile, and can be used in the home or at picnics and other outdoor events to provide a cooling oasis.

The U.S. price is $139 (approximately INR 6,081), but TPI expects to be able to lower the price to about INR 5,500, making it an attractive alternative especially for budget-conscious apartment dwellers.