Rapid urbanization in Southeast Asia is making cities denser, with more high-rise residential and commercial buildings to tackle space limitations. Coupled with large government-backed infrastructure projects, this is fueling elevator installations in the region. Currently, Thailand leads the elevator market in terms of demand, followed by Vietnam, Indonesia, and the Philippines. Vietnam and Indonesia will overtake Thailand By 2021, says the latest study on Elevator Market in the Asian region by Frost and Sullivan. Competitive pricing will be a key criterion for success due to the price sensitivity of end users in these developing economies. Elevator companies must focus on their core competencies to ensure product innovation, quality, and minimal downtime to win customers.
“Development of satellite cities around major cities in Indonesia and the Philippines will lead to the growth of megalopolis corridors, such as Jabodetabek, Indonesia and MetroManila. As more people migrate to these Mega Cities, infrastructure development will drive the elevators market,” noted Energy & Environment Principal Consultant, Frost & Sullivan, Jieqiang Tan. “The growing acceptance of machine room-less elevators, i.e. elevators which do not require a machine room on the top level of the buildings, is also fueling market growth.”
Southeast Asian Elevator Market, Forecast to 2021, part of Frost & Sullivan’s Homes and Buildings Growth Partnership Service program, expects new installation of elevators in Southeast Asia to grow to 21,589 units by 2021 with revenues reaching US$1.24 billion. The market is dominated by five global majors: Otis, Schindler, Kone, ThyssenKrupp, and Mitsubishi Elevator.
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Most end users in the Southeast Asian elevator market are expected to heavily negotiate on maintenance prices, be wary of investing in sophisticated or advanced elevators, and often opt for units with basic functions. To strengthen growth opportunities, elevator market stakeholders must:
Build a maintenance and modernization business within the installed base to garner recurring revenues, considering margins from new unit sales are usually low;
Foster partnerships with local companies or use mergers and acquisitions to grow their business;
Educate potential customers on the benefits of machine room-less elevators, such as electricity and space savings, to encourage adoption; and
Have a good rapport with key decision makers for elevator procurement, since sales are largely dependent on business relationships.