76% consumers who own air conditioners do not get them serviced by manufacturer/company service due to reasons of high cost, complicated contact process and the time it takes

June 13, 2022, New Delhi: Once consumers purchase a white good, majority of them realise that after-sales customer service is the most important component especially when it comes to products like air conditioners (AC). It is estimated that the Indian residential AC market is expected to be around 5 million units per annum, per media reports, citing industry experts. The actual sales is likely to beat all expectations and as India struggles with an extended heat wave. Temperatures in the national capital and many north, north west and central Indian cities have ranged between 44 and 50 degree Celsius this summer.

Per independent research estimates, 24% of Indian households own air conditioner or cooler, with majority of them in Chandigarh, Delhi, Punjab, Rajasthan, Chhattisgarh, Telangana, Madhya Pradesh, Goa, Maharashtra, Puducherry, Uttarakhand among other states. Nearly 40% of households who own ACs or coolers are based in urban and 16% in rural India.

Undoubtedly, India has a huge base of middle-class consumers who buy electronic products like AC based on its utility, features, and only at times basis its after-sales customer service. However, this year, LocalCircles has received a large number of complaints against air conditioner manufacturers stating that they are extremely slow to respond when it comes to after sale service. Some consumers have gone to the extent of buying a new AC because the after-sale service and warranty process of the AC brand was non-responsive or broken.

LocalCircles has conducted a study to understand how Indian consumers have been getting their air conditioner serviced after facing technical issues or problems. It sought to know if they prefer to get their AC servicing from the manufacturer or local vendors, along with reasons and price they paid for it. The survey received responses from more than 42,000 responses from 302 districts of India. 65% respondents were men while 35% respondents were women. 42% respondents were from tier 1, 29% from tier 2, and 29% respondents were from tier 3, 4 and rural districts.

76% consumers who own air conditioners do not get them serviced by manufacturer/company service due to reasons of high cost, complicated contact process and the time it takes

The first question asked consumers, “Why do you generally not get air conditioner(s) at your home serviced via the manufacturer?” In response, only 18% of consumers said “I get them serviced via the air conditioner manufacturer’s service center/department”. However, 29% said due to “(1) High cost”, 1% said “(2) Time consuming”, and 7% said “(3) Complicated contact process”. Breaking down the poll 10% cited “1 & 2” reasons from the aforementioned options, 8% said “1 & 3”, 3% said “2 & 3”, and 18% said all “1, 2 & 3” reasons. 6% said it “Never occurred to me”. On an aggregate basis, 76% of consumers who own air conditioners do not get them serviced by manufacturer/company service due to reasons of high cost, complicated contact process and the time it takes. This question in the survey received 22,000 responses.

High cost is the #1 reason why consumers who own air conditioners do not get them serviced by manufacturer/company

If reasons given by consumers are evaluated in the order of priority, the findings indicate that 65% do not get their air conditioner serviced by manufacturer/company due to “High cost”, 36% said due to “Complicated contact process”, and 32% said it is “Time consuming”.

According to LocalCircles survey conducted in Jan 2022, consumers cited that broken after-sale service economics and warranty or service processes of brands as the main reason for buying a new device or gadgets, despite having 3 or more such products at home that are less than 5-year-old needing service or repair. The same survey suggested that the country lacks adequate standards that assure consumers that servicing and repairing of their whitegoods and devices would be checked.

2 in 3 consumers who own air conditioners say the service arm of AC manufacturer charges 50% or higher as compared to local vendors to provide service/repairs

The next question asked consumers, “How much difference do you find in cost of service/repairs between air conditioners manufacturer’s service arm versus the local vendor?” In response, 23% said their charges are higher by over 100% as compared to local vendors. 12% said it is higher by “75-100%”, 32% said “50-75%”, and 12% said “25-50%” as compared to local vendors. There were only 15% of consumers saying that it “Never occurred to me” while 6% couldn’t say. The findings suggest that 2 in 3 consumers who own air conditioners say the service arm of AC manufacturer charges 50% of higher as compared to local vendor to provide service/repairs. This question received 20,891 responses.

In summary, 76% of consumers who own air conditioners do not get them serviced by the manufacturer or company service due to reasons of high cost, complicated contact process and the time it takes. Furthermore, 2 in 3 consumers say the service arm of AC manufacturer charges 50% or higher as compared to local vendors to provide service/repairs.

The need of the hour here is for Bureau of Indian Standards (BIS) to issue standards for AC servicing. The second action that is needed here is guidelines from CCPA under the Consumer Protection Act 2019 that govern how devices must be serviced i.e. stipulated response time for complaint answering, issue resolution, resolution process and financial penalties if an AC manufacturer defaults on spare parts and service within the warranty time frame. Some consumers via LocalCircles have also demanded an end of life service date concept for such expensive whitegoods so the consumer knows upfront when buying a product as to for how long service and spares are supported on the product.

LocalCircles will be escalating these findings and collective recommendations to Central Consumer Protection Authority (CCPA), Bureau of Indian Standards (BIS) and the Ministry of Consumer Affairs so the respective rules for responsive aftersale service can be issued.

Survey Demographics

The survey received responses from more than 42,000 responses from 302 districts of India. 65% respondents were men while 35% respondents were women. 42% respondents were from tier 1, 29% from tier 2, and 29% respondents were from tier 3, 4 and rural districts. The survey was conducted via LocalCircles platform and all participants are validated citizens who had to be registered with LocalCircles to participate in this survey.