With the first mover advantage in the inverter AC segment, LG India claims to have almost tripled its share by value from 19 per cent last year to 54.5 per cent.

Today, it is MNCs like LG, Samsung and Daikin which are dominating the inverter segment though it may be a matter of time before domestic players like Voltas and Godrej Appliances catch up.

“By 2018, all air-conditioner manufacturers have to adhere to the energy efficiency based ISEER ratings due to which manufacturers are shifting to the inverter models. Globally, all developed countries have migrated to inverter ACs which comprise 90 per cent of the category today. We were to the first ones to completely shift to inverter models and our value shares have gone up from 19 per cent last year to 54.5 per cent today,” said Vijay Babu, Business Head, AC, LG India.

Samsung (16 per cent share) and Daikin(10 per cent) are on LG’s heels. The inverter AC segment currently comprises more than 20 per cent of the ₹12,000-crore air-conditioner category. “LG had a smart entry entry strategy in the inverter AC segment with reduced prices but now it is back to the right level in pricing and we are ready to compete with them. We are ISEER complaint as well and while inverter ACs are the going to be there for the long term, days of fixed-speed ACs are not over. India is a large country... the growth of the inverter segment is going to be higher in the metro markets...,” said Anil George, CFO, Voltas , during the Q1 earnings call.

But LG has realised that inverter AC is going to be the future and despite its premium positioning will attract consumers since it would halve their electricity bills. “Even if consumers pay a 15 per cent premium when buying an inverter model, they will recover the premium through lower electricity bills within a year,” says Babu.

Market research firm GfK said: “One of the major players has completely shifted away... It has supplemented this shift with a 360 degree campaign which also involves educating the consumer about inverters... The share of inverter ACs has increased to around 26 per cent in January-June 2017 compared to around 10 per cent in the period last year. South zone followed by the West have been the major contributors to the inverter growth.”