Saudi Arabia Residential AC Market Size Analysis Report by Product Type (Split, Window), Distribution Channel (Multi-Brand Stores, Supermarkets/Hypermarkets, E-Commerce) - Industry Growth Forecast to 2030

Market Overview

The Saudi Arabian residential AC market was valued at $521.6 million in 2021, and the market size is predicted to reach $917.8 million by 2030, advancing at a CAGR of 6.5% during 2021–2030. The industry is driven by the increasing heat and humidity in the environment, the rising disposable income, the changing lifestyles, and the surging investment in the housing sector in the country.

Moreover, Saudi Arabia is one of the fastest-growing economies in the world. The noticeable rise in the national income of the Kingdom of Saudi Arabia over the last few years has resulted in an increasing number of buildings, which, in turn, drives the demand for ACs.

In addition, the residential, government, and commercial sectors witness significant growth in the country. Among these, the residential sector is growing at the highest pace, with an obvious increase in the number of small villas and relatively large apartments used by small Saudi families. These small to medium-sized houses are using central or package air conditioning systems. This resulted in about 75% of the electric energy consumption in buildings in the residential (52%), government (11%), and commercial (11%) sectors, with about 70% of that load being consumed by air conditioning systems. This means that about 52% of the electric energy produced in Saudi Arabia is consumed by air conditioners.

The high need for ACs in Saudi Arabia occurs due to extreme solar heating. It is one of the countries with much-blessed energy wealth, mainly fossil fuels, where the accessibility of energy supplies has been an essential factor in all sectors that still have and maintain low energy costs for years.

Moreover, the increasing preference for energy-efficient air conditioners is a key trend in the nation. The preference for the installation and use of air conditioners that are energy-efficient is increasing among people. Most air conditioners run on electricity in the country, and due to high temperatures, the constant use of air conditioners leads to high energy consumption. Electricity in the country is mostly produced by burning fossil fuels, and to ensure lower consumption of electricity, manufacturing, selling, purchasing, and using air conditioners with a higher energy efficiency ratio (EER) value is being promoted. Energy-saving air conditioner units are preferred to ensure the saving of resources.

Split ACs Are Mostly Used

Split ACs held the largest market share, of around 59.0%, in 2021. These can provide cooling and heating to homes and offices, and thus, they are preferred over window ACs. As a single outdoor system can control multiple indoor units, split ACs are accomplished to offer even cooling throughout the home. This also means that split ACs can offer significant savings for larger home cooling projects. In addition, split ACs are mounted high and designed for cooling larger spaces, and further, it is possible to get split ACs of a high tonnage, of above 2 tons. Moreover, split systems can provide both heating and cooling and are well-known for their uniform distribution of hot and cold air when appropriately controlled via a thermostat.

Increasing Heat and Humidity in the Environment

The increasing heat and humidity in the environment of the country have led air conditioners a necessity product from being a luxury. A significant increase in the minimum and maximum temperature of the country is being witnessed, and the temperatures are expected to rise explicitly in the next few years if sustainable measures are not implemented. This scorching temperature can impact the health and well-being of people.

Moreover, there is usually a high temperature during the day, especially during summer, the temperature ranges from 27 oC to 43 oC depending upon different parts of the country, and thus, people avoid being under direct sunlight. To combat the hot and humid conditions, people are investing in necessary equipment such as air conditioners at their residences. The rapid change in climatic conditions of the country is leading people to invest in infrastructural facilities to have comfortable conditions at their residences. Hence, this factor is an essential contributor to the growth of the market for air conditioners.

E-Commerce Generated Maximum Revenue

The e-commerce category held the largest revenue share, of more than 50%, in 2021. This channel offers products at relatively lower prices, which makes it a good option to buy ACs online. The convenience of electronic payment and doorstep delivery, extensive product lists with their features and technical specifications in detail, and the availability of a range of discounts and promotional offers lead to the popularity of online shopping.

Moreover, online stores do not have space constraints and a wide variety of products can be displayed on websites. It helps analytical buyers purchase a product after a good search. Also, e-retailers and marketers offer discounts to customers, as they have cut down on real estate and other costs.

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Western Region Held the Largest Market Share

In terms of volume, the western region accounted for the largest revenue share in 2021, and the demand for ACs in the region is projected to grow at a CAGR of around 6% during the forecast period, in the Saudi Arabian residential AC market. The growing development of housing units in the area makes it the largest shareholder among all the regions. Also, the western part of the Kingdom is home to some of the largest cities, including Jeddah, Makkah, and Medina, which are witnessing a huge influx of people from rural areas of Saudi Arabia and visitors from other countries, thus driving the residential construction boom.

Moreover, the country is also trying to promote energy-efficient residential air conditioners, to ensure the saving of resources. The air conditioners are provided with their energy efficiency ratings and the ones that have higher ratings get monetary incentives from the government. For instance, the country offers a refund of about $240 for each unit of high-efficiency split air conditioner bought, with an EER of 13.8 or more, for up to six units per household.

Top Residential AC Manufacturers in Saudi Arabia Are:

• LG Electronics Saudi Arabia LLC
• Gree Electric Appliances Inc. of Zhuhai
• Zamil Air Conditioners
• Al Salem Johnson Controls
• Samsung Electronics Saudi Arabia Ltd.
• FUJITSU GENERAL (MIDDLE EAST) FZE
• S.K.M. Air Conditioning LLC
• Daikin Air Conditioning Saudi Arabia LLC
• Carrier - Saudi Arabia
• Midea Gulf

Market Size Breakdown by Segment

The study offers a comprehensive market segmentation analysis along with market estimation for the period 2017-2030.

Based on Product Type

• Split
• Window

Based on Distribution Channel

• Multi-Brand Stores
• Supermarkets/Hypermarkets
• E-Commerce

Geographical Analysis

• Central
• Eastern
• Western
• Southern