GCC Air Conditioner Market Research Report: Forecast (2024-2030)

Market Definition

Air Conditioners are a necessity in the countries of the GCC group due to the above-average temperatures. They maintain a standard air temperature inside the building providing a comfortable environment to the occupants. Additionally, the demand for air conditioners has increased in the GCC countries as the standard of living has risen and customers are spending more on luxury goods to improve their lifestyle and comfort. Moreover, infrastructure development has increased the requirement for various efficient cooling solutions.

Market Insights & Analysis: GCC Air Conditioner Market (2024-30):

The GCC Air Conditioner Market was valued at around USD 3.9 billion in 2023 and is estimated to grow at a CAGR of around 5.0% during the forecast period, 2024-30. The countries in the GCC group have harsh climate conditions, with temperatures rising above normal. This is the primary factor behind the growth & expansion of the GCC Air Conditioner Market. However, there are other factors, fueling the growth of the GCC Air Conditioner Market other than the rising temperature. The countries in the GCC group have taken various initiatives to diversify and grow their economy at a rapid rate.

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The economic growth of the countries resulted in increased per capita income of their citizens. Consequently, the disposable income increased and the standard of living rose, changing the purchasing pattern of the customer. Spending on luxurious consumer durables increased which boosted the demand for air conditioners. Moreover, the increased construction of houses, commercial spaces, and infrastructure such as metros and public buildings given the rising urbanization and the government's plans of diversification and development. This increased the demand for air conditioners to provide efficient and effective cooling systems for these newly constructed buildings.

Additionally, the growing environmental concerns and the GCC Countries’ goal to reduce their carbon emissions has led to the purchase of new more efficient, and nature-friendly air conditioners and replacement of older units that use gases that are harmful to the ozone layer. Health consciousness has also increased in recent years and the effects of bad air quality on human health are being discussed. It has led to an increased demand for advanced air conditioners with air purifiers to maintain better indoor air quality.

GCC Air Conditioner Market Driver:

Increased Construction Activities Driving Market Growth – GCC countries have launched multiple mega projects that will require efficient cooling solutions of different types. These mega projects include hotels, resorts, theatres, sports arenas, skyscrapers, museums, art galleries, and much more. These places will accommodate large crowds and will require efficient and powerful cooling solutions, which will significantly increase the demand for air conditioning systems.

The governments of GCC countries have also invested significantly in the development of the infrastructure in their respective countries. This development includes metro lines, large power plants, and new gas and oil fields among others. This will further increase the demand for cooling systems and augment the size & volume of the GCC Air Conditioner Market.

Moreover, according to the plans of GCC countries, there are over 700,000 houses to be built across the six countries of the GCC group to solve the housing problems and increase the ownership rate for houses. These newly built houses will contribute to the growth of the air conditioner industry. Additionally, the housing project and other mega projects will be carried out in phases which will ensure a constant demand for the air conditioner market players.

GCC Air Conditioner Market Opportunity:

Increasing Focus on Mega Projects to Boost Market Demand – Countries in the GCC group have formed various strategies to diversify their economy and increase their revenue through various new streams. This initiative is expected to reduce their reliance on oil. The core objective is to increase tourism and development of various industries including manufacturing, IT, and technology. To achieve these objectives, the GCC countries are constructing various mega projects such as UAE’s Dubai Creek Tower, which is expected to be the world's tallest building upon completion in 2025. Saudi Arabia’s NEOM, a large urban development project that will feature advanced research labs, luxurious residences, hotels & resorts, and many entertainment zones & commercial spaces. These projects are expected to attract a large number of tourists and attract more foreign investments and MNCs. These mega structures will require robust and efficient cooling systems that may require some innovation on leading market players’ side. This will present the market players with ample growth opportunities.

GCC Air Conditioner Market Challenge:

Growing Environmental Concerns to Hinder Market Growth – Environmental concerns are increasing globally, and many countries have announced their sustainability goals. GCC countries have announced to reduce their carbon emissions or reach net zero emissions by 2030 as part of their Vision 2030 strategy. This has prompted the adoption of environmentally responsible practices by governments, citizens, and other groups and organizations alike. This will affect the air conditioner industry as demand for eco-friendly air conditioning systems will rise and might also include the introduction of new regulations surrounding the air conditioner market. This is primarily due to the use of refrigerants with high global warming potential being used in air conditioners. Changing the technology and adoption of new gas will be challenging and might increase upfront costs. Overall, this will adversely affect the growth potential of the GCC Air Conditioner Market.

GCC Air Conditioner Market Trend:

Increasing Popularity of Smart Air Conditioners – Smart air conditioners are gaining popularity among customers as they provide features that make them more efficient and practical. These smart air conditioners use IoT technologies to provide features such as schedule on and off, real-time energy consumption monitoring, remote control, filter health indicator, maintenance indicator, and many more. These features can be accessed via a mobile app or tablet and in some models even a voice assistant. With the growing popularity of creating a smart appliance network at homes, smart air conditioners are becoming more popular. These features enhance their efficiency and usability. Thus, the increasing popularity of such air conditioners is creating a solid foundation for growth & expansion of the air conditioner industry during the forecast period.

GCC Air Conditioner Market (2024-30): Segmentation Analysis

The GCC Air Conditioner Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the regional level. Based on the analysis, the market has been further classified as:

Based on Type:

• Window AC
  • Upto 1 Ton
  • 1.1 to 2 Ton
  • Above 2 Ton
• Split AC
  • Upto 1 Ton
  • 1.1 to1.5 Ton
  • 1.6 to 2 Ton
• Floor Standing AC
  • Upto 2 Ton
  • Above 2 Ton
• Cassette AC
• Packaged AC
• Ducted Split AC
• Centralized AC
  • FCU/AHU
  •  Chillers
  •  VRF

Out of all these, Split Air Conditioner holds the largest market share. Split air conditioners have an indoor unit connected to an outdoor unit via pipes, its silent functioning is what makes split air conditioners desirable. They are in high demand by the hospitality sector, which expanding rapidly. To give their customers a comfortable stay, hotels, resorts, and homestays prefer to equip the rooms with split air conditioners as they are more silent.

Moreover, split air conditioners are a popular choice for homes, with the growing residential sector the demand is constantly rising and more people are spending on luxurious goods owing to their increased disposable income, and rising standard of living. They are popular in commercial spaces as a wide area can be cooled using a multi-split type air conditioner. A multi-split air conditioner uses multiple indoor units, connected to a large single outdoor unit.

Based on End User:

• Residential
• Commercial
• Industrial
• Hospitality

In the end-user segment, the commercial sector is expected to dominate the market. GCC countries are making efforts to decrease their oil dependency, therefore, they are making significant investments in other sectors. With other industries growing, infrastructural development has sped up. Additionally, governments have launched various projects in the region. These new spaces will require an efficient cooling system, owing to the harsh climate. This will fuel the air conditioner industry growth in the GCC region during the forecast period.

GCC Air Conditioner Market (2024-30): Regional Projections

Geographically, the GCC Air Conditioner Market expands across:

• The UAE
• Saudi Arabia
• Oman
• Qatar
• Bahrain
• Kuwait

Among these countries, Saudi Arabia dominated the market for air conditioners.  Saudi Arabia is the biggest country in the GCC group and the richest with a significant per capita income. Saudi Arabia is promoted as one of the most luxurious and exotic destinations. With increasing public and private investment, the Saudi economy has been on the rise. Increased tourism and the growth of various industries further motivated the government of Saudi Arabia. Thus, the launch of mega projects with a roughly estimated cost of over USD 3 trillion to finish the aspirational project. The projects will feature clinics, hospitals, luxurious resorts and hotels, commercial and corporate spaces, luxury residencies, and laboratories among others. This has significantly increased the sales of air conditioners as all these new structures require air conditioning which is robust and efficient. Moreover, Saudi Arabia plans to build around 400,000 houses which will boost the demand further.

GCC Air Conditioner Industry Recent Development:

• 2023: LG Electronics (LG), as a part of its 'Life is Cool with DUALCOOL' campaign, announced the launch of its latest air conditioner line-up for 2023 in the UAE. Equipped with the most advanced cooling system, these ACs endure the hot & humid weather conditions in Gulf countries while providing maximum comfort, even at temperatures up to 65°C.
• 2023: Mitsubishi Electric Corporation and MOVENSYS Inc. unveiled a new business partnership aimed at enhancing their collaboration within the AC servo and motion control sectors. As a significant aspect of this strategic agreement, Mitsubishi Electric has initiated the process of acquiring an equity stake in Movensys.

Gain a Competitive Edge with Our GCC Air Conditioner Market Report

1. GCC Air Conditioner Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. GCC Air Conditioner Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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