Water Heaters Global Market Opportunities and Strategies to 2033

This report describes and explains the water heaters market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global water heaters market reached a value of nearly $59.1 billion in 2023, having grown at a compound annual growth rate (CAGR) of 8.2% since 2018. The market is expected to grow from $59.1 billion in 2023 to $89.2 billion in 2028 at a rate of 8.6%. The market is then expected to grow at a CAGR of 7% from 2028 and reach $125.4 billion in 2033.

Growth in the historic period resulted from rapid urbanization, the growing demand for instant heating units, the high investments in the consumer electronics industry and strong economic growth in emerging markets. Factors that negatively affected growth in the historic period was shortage in electronic components supply and changing regulations.

Going forward, growth in residential and commercial construction activities, the rising disposable incomes per capita, surge in e-commerce and retail sales, fluctuations in energy prices such as electricity and gas will drive the growth. Factor that could hinder the growth of the water heaters market in the future include high initial cost of purchasing and installing energy-efficient water heating systems and limited availability of skilled technicians and contractors.

The water heaters market is segmented by product type into solar heaters, electric heaters, gas and propane heaters, geothermal heaters and other product types. The electric heaters market was the largest segment of the water heaters market segmented by product type, accounting for 52.2% or $30.9 billion of the total in 2023. Going forward, the solar heaters segment is expected to be the fastest growing segment in the water heaters market segmented by product type, at a CAGR of 10.2% during 2023-2028.

The water heaters market is segmented by distribution channel into supermarket/hypermarket, specialty stores, e-commerce and other distribution channels. The specialty stores market was the largest segment of the water heaters market segmented by distribution channel, accounting for 45.4% or $26.8 billion of the total in 2023. Going forward, the e-commerce segment is expected to be the fastest growing segment in the water heaters market segmented by distribution channel, at a CAGR of 10.1% during 2023-2028.

The water heaters market is segmented by end user into residential, commercial and industrial. The residential market was the largest segment of the water heaters market segmented by end user, accounting for 51.7% or $30.5 billion of the total in 2023. Going forward, the commercial segment is expected to be the fastest growing segment in the water heaters market segmented by end user, at a CAGR of 9.2% during 2023-2028.

Asia Pacific was the largest region in the water heaters market, accounting for 34.9% or $20.6 billion of the total in 2023. It was followed by North America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the water heaters market will be Middle East and Asia Pacific where growth will be at CAGRs of 9.7% and 9.4% respectively. These will be followed by Africa and South America where the markets are expected to grow at CAGRs of 9.4% and 9.2% respectively.

The global water heaters market is fragmented, with a large number of players in the market. The top ten competitors in the market made up to 16% of the total market in 2022. A. O. Smith Corporation was the largest competitor with a 5% share of the market, followed by Rinnai Corporation with 3.6%, Vaillant Group with 2.1%, Rheem Manufacturing Company with 1%, Ariston Thermo Group with 0.9%, Viessmann Group with 0.9%, Haier Smart Home Co., Ltd. with 0.8%, NORITZ Corporation with 0.6%, Bradford White Corporation with 0.6% and Robert Bosch GmbH with 0.4%.

The top opportunities in the water heaters market segmented by product type will arise in the electric heaters segment, which will gain $16.3 billion of global annual sales by 2028. The top opportunities in the water heaters market segmented by distribution channel will arise in the specialty stores segment, which will gain $14 billion of global annual sales by 2028. The top opportunities in the water heaters market segmented by end user will arise in the residential segment, which will gain $15.4 million of global annual sales by 2028. The water heaters market size will gain the most in the USA at $6.6 billion.

Market-trend-based strategies for the water heaters market include new product launches to cater to diverse applications, strategic partnerships and acquisitions to drive market dominance, integration of Wi-Fi control for unprecedented convenience and energy management, launch of solar powered water heaters to transform the home energy landscape and focus on the development of tankless heat pump water heaters.

Player-adopted strategies in the water heaters market include focus on strengthening product portfolio by acquiring companies within the same line of business, focus on enhancing business capabilities through the launch of new products, focus on strengthening market position through product expansions and focus on strengthening market position through strategic partnerships.

To take advantage of the opportunities, the analyst recommends water heaters companies to focus on innovation and product diversification, focus on integrating Wi-Fi control capabilities, focus on sustainable solar-powered solutions, focus on tankless heat pump water heaters, focus on solar heaters, expand in emerging markets, continue to focus on developed markets, focus on e-commerce, focus on competitive pricing, focus on strategic pricing strategies for market leadership, participate in trade shows and events, continue to use B2B promotions, focus on digital marketing channels, focus on customer education and engagement and focus on commercial end-users.