Bangladesh’s AC boom: How heat, income growth and local industry are reshaping a once-luxury market

Bangladesh's air-conditioner market is no longer driven solely by affluent households in Gulshan, Banani or Dhanmondi investing in premium cooling appliances.

Instead, it is being reshaped by a broader shift in consumer behaviour, expanding local manufacturing capacity, and the growing need to adapt to a warming climate.

From Dhaka's apartment blocks to homes in district towns and semi-urban areas, air-conditioners are steadily moving into the mainstream of household spending. What was once considered a luxury is increasingly viewed as a practical response to harsher summers, dense urban living, and rising living standards.

This transition is turning the AC business into one of the fastest-growing segments of Bangladesh's consumer electronics industry.

Industry insiders estimate that around 550,000 AC units were sold in Bangladesh last year by local manufacturers and brands—up sharply from roughly 180,000 units five years ago. The sector is expected to grow by 16% year-on-year in 2026, with annual compound growth projected at 14.4% through 2030.

For manufacturers, importers, and retailers, the takeaway is clear: cooling is fast becoming a major growth business.

The Bangladesh Meteorological Department expects both day and night temperatures to remain above normal between April and June this year. It has also forecast six to eight mild-to-moderate heatwaves, along with three to four severe ones across the country.

For millions of urban residents living in concrete buildings with limited airflow, summer discomfort is no longer just an inconvenience—it is beginning to affect sleep, productivity, health, and overall quality of life.

In densely populated cities such as Dhaka, Chattogram, and Khulna, apartments—particularly those on upper floors—often stay hot well into the night. For families with elderly members, young children, or those working from home, air-conditioners are increasingly seen as a necessity rather than a luxury.

Globally, 2025 ranked among the warmest years on record, with heatwaves and extreme weather events becoming more frequent and intense, according to industry data.

Bangladesh is now witnessing how global climate change is translating directly into domestic consumer demand.

From status symbol to household appliance

Ten years ago, owning an AC in Bangladesh was widely seen as a sign of affluence. The product was associated with luxury homes, top executives, premium offices and high-end commercial establishments.

That picture has changed dramatically. Locally assembled and lower-cost imported units have reduced the price barrier. Installment plans, credit card offers and seasonal discounts have widened access.

Retailers say many customers now compare buying an AC with purchasing a refrigerator or television a notable psychological shift.

Instead of viewing ACs as premium lifestyle products, buyers now ask practical questions: how much electricity the unit consumes, whether it has inverter technology, how long the compressor warranty lasts, whether after-sales service is available nearby, and whether it can be bought through installment facilities.

This is what happens when a luxury category gradually becomes a utility category.

Amir Hossain, who works in the marketing department of a local company and earns Tk50,000 a month, recently bought a locally manufactured AC for Tk42,000 at a discounted price using EMI.

"The temperature in Dhaka is unbearable. I decided to install an AC because the price is low and EMI is available," he said.

"The air-conditioner will give relief to my child this summer."

Five years ago, a one-tonne AC often cost more than Tk100,000. Now Chinese brands are available for Tk35,000-Tk40,000, while one-tonne locally made units from Walton, GREE and Pran-RFL sell for around Tk45,000-Tk50,000.

Industry insiders say rising disposable income and improving living standards are among the biggest demand drivers.

Growing numbers of dual-income urban families, improved housing quality and aspirational consumption patterns are expanding the customer base.

Young professionals buying their first apartments, small business owners upgrading homes, migrant-income families in district towns and salaried employees seeking comfort for children and elderly parents are now active buyers.

The local manufacturing revolution

Perhaps the biggest story in Bangladesh's AC market is no longer demand alone, but the transformation of supply.

The country has moved from complete import dependence to meeting around 75-80% of demand through domestic manufacturing and assembly, according to industry insiders.

That marks a significant shift for Bangladesh's electronics sector, helping build local industrial capacity while reducing dependence on foreign suppliers.

Local production has also reshaped the market in practical ways. Manufacturers can now offer more competitive prices by cutting logistics costs and reducing delivery times. During peak summer months, brands can respond faster to sudden spikes in demand.

Expanded service networks have improved installation, maintenance and spare-parts availability. The growing ecosystem of factories, technical service centres and dealer networks has also created jobs and opened the door to greater technology transfer.

A decade ago, Bangladesh's AC market depended heavily on imported brands such as General, Hitachi, Panasonic, Singer, Samsung and LG.

Now local brand Walton holds more than 22% of the market. GREE, Haier, Samsung, MyOne, Unitech, Transcom Digital, Vision, Jamuna and Butterfly are also manufacturing or assembling ACs locally.

Only around 20-25% of ACs are now imported, according to industry insiders.

Mesbah Uddin Ahmed, chief marketing officer of Fair Group, said many local companies entered AC manufacturing after production-level VAT incentives were introduced.

Fair Electronics has set up a Samsung and Hissence AC factory in Narsingdi.

He said rising temperatures caused by climate change are increasing reliance on cooling systems.

"As a result, the market is getting bigger," he said.

He also said the expansion of the middle class and affordable pricing are helping grow the market.

Tanvir Rahman, chief business officer of Walton Air Conditioner, said Bangladesh's AC industry has entered a new phase where local brands are capable of competing strongly in both quality and technology.

He said domestic manufacturing allows companies to develop products suited to local weather conditions and customer needs, while also strengthening after-sales service.

Rural Bangladesh enters the market

The shift in Bangladesh's AC market is becoming increasingly visible outside major cities, where rising incomes and changing weather patterns are driving first-time purchases.

Sadia Islam, a primary school teacher in Bhola, recently bought a one-tonne Walton air-conditioner from a district showroom for Tk45,000.

She said her family built a one-storey house with a concrete roof last year, but staying indoors during summer evenings had become difficult because of trapped heat.

"It becomes almost impossible to stay at home from evening until midnight during hot weather. So we bought the AC through an EMI facility," she said.

Her story reflects how affordable locally made products are helping expand AC ownership beyond metropolitan consumers.

Air-conditioner demand is no longer confined to Dhaka and Chattogram. District headquarters, municipalities and affluent rural growth zones are showing increasing interest.

Retailers say customers from smaller towns are increasingly choosing one-ton inverter units for bedrooms or family spaces.

Nurul Afsar, deputy managing director of Electro Mart, the local manufacturer of China-based global brand GREE, said improving electricity access, modern housing, remittance-backed household spending and social media-driven lifestyle aspirations are accelerating AC adoption across smaller cities and rural growth centres.

He said demand is no longer concentrated only in Dhaka and a few major urban centres, as increasing numbers of customers from district towns are entering the market for the first time.

"This matters because Bangladesh's next wave of market growth may come outside major metropolitan areas," he added.

Export ambitions emerge

Bangladesh's AC industry remains focused primarily on the domestic market, but export signs are beginning to appear.

According to FY25 trade data, Bangladesh exported AC-related products to Yemen, Guinea, Cameroon, Sri Lanka and Gabon.

While export volumes remain modest, these shipments suggest that Bangladeshi producers are beginning to compete beyond local borders.

That raises a longer-term possibility: Bangladesh emerging as a regional assembly and export hub for selected cooling appliances.