The water heater market involves manufacturing and sales of devices used for heating water for various applications at homes as well as in industries and commercial establishments. Water heaters work on electric or gas and are used for bathing, cleaning, space heating, and other activities. Electric water heaters use energy from electricity to heat water with the help of one or more heating elements, while gas water heaters use natural gas or liquid propane gas to heat water and deliver it for use. Gas water heaters are generally more affordable to operate as compared to electric ones.
water heater market is estimated to account for US$ 33.94 Billion in terms of value in 2023 and is expected to grow at a CAGR of 12.4% during the forecast period from 2023-2030.
Key Takeaways
Key players operating in the water heater market are A.O. Smith Corporation, Ariston Thermo SpA, Bosch Thermotechnology, Racold (India) Pvt. Ltd., Haier Electronics Group Co., Ltd. Key players are focusing on launching innovative and energy efficient water heating solutions to gain higher market share.
The rising Water Heater Market Growth for hot water in residential and commercial sectors is a major factor driving the growth of the global water heater market. Additionally, the launch of energy efficient heaters, growing disposable income, and increasing spending on bathing facilities are further fueling the market growth.
Technological advancements such as integration of IoT and adoption of renewable energy sources for powering water heaters are creating new opportunities for manufacturers in the water heater market. Key players are investing in developing smart water heaters that can be controlled through smartphones and other smart devices.
Market Trends
The growing popularity of solar water heaters owing to cost effectiveness and eco-friendly nature is a key trend in the market. Major players are developing innovative solar water heating solutions to capitalize on the growing demand. Another trend is the increasing preference for tankless water heaters due to smaller size and continuous supply of hot water.
Market Opportunities
The rising focus on energy efficiency and conservation globally is creating demand for heat pump water heaters. Heat pump technology offers energy savings of around 50% compared to conventional electric heaters.
Governments in various countries are offering subsidies and tax credits to promote adoption of solar water heating systems, thereby presenting lucrative growth opportunities.
The COVID-19 pandemic has posed massive challenges for the global water heater market. The lockdowns and supply chain disruptions caused a major decline in residential construction activities across major world economies in 2020. This resulted in a steep drop in demand for water heaters used in households. The economic slowdown also reduced disposable incomes of consumers, further negatively impacting their spending on replacement of existing water heaters. However, with mass vaccination drives and reopening of economies, the market is slowly recovering since 2021. Various government stimulus packages aimed at reviving the real estate sector are also propelling demand. Nonetheless, emerging new variants of the virus continue posing uncertainty.
The pandemic has accelerated trends like work from home and online shopping which increased residential water usage. This has boosted sales of smaller capacity water heaters for individual homes. However, commercial and industrial segments saw major declines as workplaces, hotels and restaurants remained closed for long periods. Manufacturers faced challenges in procuring raw materials and ensuring worker safety at factories. Many companies increased their focus on digital technology and online sales channels to sustain business during lockdowns. Looking ahead, growth in construction of green buildings and demand for energy efficient products will drive the long term prospects.
Geographical Regions with High Water Heater Market Concentration
North America accounts for the largest share of the global water heater market in terms of value. The United States is the single largest market worldwide owing to large housing stock and frequent replacements driven by severe winter climate in many regions. Both gas-fired and electric water heaters have significant demand in the country. Growth is backed by rising installations in new construction projects and aging infrastructure driving replacement sales.
Fastest Growing Region for Water Heater Market
The Asia Pacific region is poised to witness the fastest growth in the water heater market over the forecast period. Rising population, rapid urbanization, increasing disposable incomes and expansion of middle-class are major driving factors. Countries like China, India and Indonesia are major emerging markets propelling demand growth. Favorable government initiatives to expand access to basic amenities and develop smart cities also support market expansion. Improving standards of living indicate immense opportunities for water heater manufacturers in the Asia Pacific.
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