Bangladesh’s air conditioner (AC) market is moving towards a point where cooling may become as common as refrigeration as a still underpenetrated sector expands rapidly, said Mesbah Uddin, Chief Marketing Officer of Fair Group that manufactures Hisense ACs locally.
“The fast-growing underpenetrated AC market is expected to double in scale by 2035, with a 15 to 20 per cent annual growth,” he told TIMES of Bangladesh.
The shift reflects a structural change over the past two decades, as air conditioners moved from a niche luxury to a mass-market necessity, driven by rising temperatures, urbanisation and local manufacturing.
Annual demand now estimated at around 7,00,000 to 8,00,000 units, with market value estimated at Tk5,500 crore to Tk6,500 crore in the 2025–26 fiscal year.
Two decades ago, demand was below 50,000 units, before accelerating in recent years as local production made ACs affordable for middle-income households.
Local manufacturing now meets more than 80 per cent of demand, replacing a market once dependent on imports.
Locally assembled units are 20 to 30 per cent cheaper than completely built-up imports due to lower duties on components and VAT advantages, expanding access beyond urban high-income groups.
The market has nearly tripled since 2019, yet penetration remains low.
Household ownership is estimated to stand at around 8 to 9 per cent in 2026, up from about 1 per cent a decade ago, compared with 15 to 18 per cent in Vietnam and over 30 per cent in Thailand.
“More than 90 per cent of the population in Bangladesh still does not have an AC, leaving a large untapped market,” he said.
To capture this demand, companies are expanding production, introducing energy-efficient models and strengthening distribution.
After-sales service is also scaling up, with more than 104 service centres and over 400 touchpoints nationwide, supported by systems to ensure technicians reach customers within 24 to 48 hours.
The informal service network remains significantly larger.
Technology shaping demand
As adoption rises, purchasing behaviour is shifting towards efficiency, durability and operating cost rather than upfront price.
According to Mesbah Uddin, technologies such as full DC inverter systems, inner-grooved copper tubes and golden hydrophilic fins are improving efficiency and corrosion resistance in Bangladesh’s humid climate.
Features including fast cooling, dehumidification, silent operation, self-diagnosis and extended compressor warranties are becoming standard.
Rising electricity costs are accelerating the shift towards inverter and higher-efficiency models, particularly among middle-income households.
The AC market is also recovering from a subdued 2025, when milder weather and inflation dampened demand.
Early heatwaves in April 2026 have already driven a 20 per cent increase in pre-season sales compared with the previous year.
Growth is shifting beyond cities. Urban premium segments are nearing saturation, with demand increasingly driven by replacement purchases, while rural and semi-urban areas are emerging as the next growth frontier due to improved electricity access and remittance-driven spending.
“Bangladesh’s manufacturing and assembly capacity stands at around 12,00,000 units annually,” he said, indicating readiness for further expansion.
Industry players are also targeting export markets. Lower labour costs compared with China and Vietnam, along with potential trade access to SAARC and African markets, position Bangladesh as a potential AC export hub.
“With policy support, the sector could evolve into a billion-dollar export industry by the mid-2030s.”
