The global Elevator & Escalator Industry - A deep dive

The worldwide elevator and escalator market is projected to expand to roughly 166 billion US‑dollars by 2028, an annualised growth rate close to six per cent from 2024. Asia‑Pacific—particularly China and India—continues to supply most of the new‑equipment demand, whereas industrialised OECD economies increasingly focus on modernisation projects and recurring service fees. Market power remains sharply concentrated: Otis, Schindler, KONE and TK Elevator together generate about two‑thirds of global revenue and oversee an installed base that now exceeds seven million units. These four multinationals also employ close to 180 000 technicians, giving them an unrivalled ability to reach customers quickly when maintenance is required.

Where is the moat?

Installed‑base lock‑in

Elevators and escalators remain in service for two to three decades, and the original manufacturer controls proprietary spare parts, diagnostic software and firmware keys throughout that life cycle. Replacing the OEM involves extended downtime, new safety certification and legal liability for the building owner, so churn rates are minimal. As a result, each new installation tends to convert into a long‑tail annuity of service revenue.

Dense service network

The four global incumbents collectively employ about 180 000 technicians—Otis alone fields some forty‑four thousand—arranged in thousands of local branches. High route density allows same‑day interventions, reduces travel and inventory costs per call‑out and, critically, reassures building owners that statutory monthly inspections will be completed on time.

Regulation and liability

National and municipal codes typically require certified firms to sign off on repairs and periodic safety tests. Building owners are reluctant to assume liability by shifting to unproven independents, and insurers often insist on OEM participation for complex modernisation projects. Over the past decade independents have rarely captured more than ten per cent of any incumbent’s portfolio in a mature market.

Digital telemetry and AI

Cloud platforms such as Otis One, KONE 24/7 and Schindler Digital Twin already monitor more than half of each company’s fleet. Continuous sensor data feeds predictive‑maintenance algorithms that raise first‑time‑fix rates above ninety per cent, cut unplanned outages and lock customers into recurring software subscriptions that third‑party maintainers cannot easily replicate.

Brand reputation and safety trust

Elevator incidents make headlines and can trigger costly litigation. Building owners, regulators and insurers therefore prefer established brands with long safety records and robust quality systems. The incumbents invest roughly one per cent of sales in safety and R&D each year to protect that reputation and keep approval authorities on side.

Capital‑light, counter‑cyclical mix

Service activities generate well over sixty per cent of industry EBIT and convert to free cash flow at rates that frequently exceed one hundred per cent. When construction cycles slow, modernisation and maintenance work typically rise, cushioning earnings and supporting dividend capacity.

Overall sustainability

Taken together these drivers create a self‑reinforcing flywheel: every new installation enlarges the installed base, which in turn justifies denser service coverage and deeper parts inventories, reinforcing customer dependence and expanding cash generation for further investment. The moat therefore looks durable through at least the end of this decade, though emerging risks include open‑protocol legislation and the advance of low‑cost Chinese manufacturers.

The main Players

Otis Worldwide

With roughly twenty per cent market share, Otis maintains about 2.4 million units in more than two hundred countries. Its dense North‑American network, the largest spare‑parts catalogue in the sector and the swift roll‑out of the Otis One Internet‑of‑Things retrofit underpin service margins above twenty‑four per cent. The company faces one main risks: heavy exposure to China for new‑equipment orders. Even so, Otis’s fleet advantage should preserve pricing power for at least the next five years.

Schindler

The Swiss group ranks second with an estimated seventeen per cent share and a service portfolio of roughly 1.6 million units. Schindler has the deepest European footprint and differentiates itself through its Digital Twin platform, which supplies carbon‑footprint certificates alongside predictive analytics. In 2024 the company generated 11.2 billion Swiss francs of revenue and an adjusted EBIT margin of about twelve per cent, supported by a robust increase in operating cash flow. Nevertheless, Schindler’s cloud‑connected penetration and technician productivity lag Otis, and accelerating digital adoption is critical to defending its European service book.

KONE

The Finnish manufacturer holds close to fifteen per cent share and services at least 1.7 million units. KONE enjoys the highest digital attach rate in the industry—around sixty per cent of its fleet transmits real‑time data—and leverages proprietary technologies such as UltraRope and the DX‑class platform to win new‑building contracts. A net‑cash balance sheet permits generous shareholder returns, yet roughly one quarter of revenue still comes from an increasingly volatile Chinese construction market, leaving earnings more cyclical than those of some peers.

TK Elevator

Formerly ThyssenKrupp Elevator, the company claims about thirteen per cent market share with an installed base in excess of 1.5 million units. Some twenty‑five thousand technicians spread across more than a thousand service hubs support its "Universal Service" model, which allows the firm to maintain third‑party elevators; about thirty per cent of its contracts now cover competing brands. Private‑equity ownership leaves TK with a B credit rating and a focus on deleveraging, which may limit investment in digital upgrades. The company’s network is strong in the United States and Germany but thinner in Asia, where domestic manufacturers are scaling quickly.

Adj. EBITDA for 2019/20 not publicly disclosed; figure therefore omitted.

Risks and opportunities

Risks

Over the coming decade the single most material threat is regulatory: draft "open‑protocol" or “right‑to‑repair” initiatives in both the European Union and the United States could compel OEMs to share elevator‑telemetry data and diagnostic software with independent service providers. Although the manufacturers would still control cryptographic code‑signing and proprietary spare‑parts inventories, mandatory data openness would erode an important layer of customer lock‑in and compress service margins. A second risk involves technology disruption. Sensor companies and building‑operating‑system vendors are experimenting with bolt‑on monitoring solutions that bypass OEM clouds; if they achieve scale, the incumbents’ predictive‑maintenance edge could narrow. Third, beyond 2035 autonomous maintenance robots might eventually substitute for large field workforces, thereby diluting the current advantage derived from technician density. Finally, the rise of low‑cost Chinese lift manufacturers—especially in smaller Asian cities—could pressure equipment prices and gradually build rival service fleets.

Opportunities

Conversely, several forces stand to fortify the incumbents’ economic moat. A pronounced slowdown in new construction is likely to accelerate modernisation of the existing stock, shifting revenue mix toward high‑margin service work and extending the useful life of the installed base. Digitisation represents another tailwind: the rapid roll‑out of IoT retrofit kits such as Otis One, KONE 24/7 and Schindler Digital Twin deepens customer engagement, improves first‑time‑fix performance and raises switching costs. Sustainability mandates offer a parallel avenue for growth—building owners seeking carbon‑reduction certificates often prefer OEM‑provided upgrade packages that optimise energy use and integrate seamlessly with smart‑building platforms. Finally, rapid urbanisation in India, Southeast Asia and selected African economies will continue to create green‑field demand, providing the multinationals with fresh equipment orders that ultimately convert into decades‑long service contracts.

Why disrupting the services market is not easy

During the past fifteen years a succession of venture‑funded start‑ups, facility‑management conglomerates and regional consolidators have tried to prise open the elevator‑service profit pool. Their stories reveal just how resilient the incumbents’ moat remains.

One of the most visible challengers was WeMaintain, founded in Paris in 2017 on the promise of “Uber‑style” technician matching and a brand‑agnostic parts supply chain. The company secured marquee office towers in Paris La Défense and later expanded to London and Singapore, yet by 2024 it had pivoted toward broader smart‑building monitoring after failing to scale its elevator maintenance book beyond a few thousand units. The root problem was density: with only dozens of technicians spread across multiple cities, WeMaintain’s response times and route economics could not match those of Otis or KONE, forcing it to subcontract complex repairs back to the OEMs and compressing margins.

A similar fate befell several predictive‑sensor start‑ups—for example, LiftAI in North America and SenseRise in Germany—that attempted to sell aftermarket accelerometer kits coupled to cloud analytics. Building owners liked the up‑front cost savings, but without integration rights to the elevator controller software these firms could only issue alerts, not command the machine. Responsibility for actual repairs therefore reverted to the OEMs, who soon offered native sensor packages as part of their own IoT suites, crowding the newcomers out of the market.

Large facility‑management groups such as ISS, Sodexo and CBRE also explored elevator servicing in the early 2020s, betting that their multiservice contracts would grant cross‑selling leverage. In practice they discovered that elevator liability insurance is far costlier than for janitorial or HVAC work and demands technician certification programmes that they lacked. Most quietly withdrew or limited their ambitions to basic call‑button triage, leaving periodic inspections and repairs to the OEMs.

Finally, regional roll‑ups tried a more traditional path: assembling clusters of independent maintainers to reach scale quickly. American Elevator Group acquired over twenty local firms between 2020 and 2024, while Japan’s BetaKone copied the playbook in Southeast Asia. Yet even after consolidation these groups service fewer than 100 000 units apiece, well below the million‑plus thresholds that underpin global parts procurement discounts and IoT‑platform R&D budgets. Without proprietary spare‑part supply or controller source code, they remain price‑takers in complex repair jobs.

Taken together, these cases highlight the structural hurdles any would‑be disruptor must clear: dense technician networks to guarantee uptime, legal access to proprietary parts and software, and a balance sheet able to absorb liability claims. To date no entrant has surmounted all three, and the service portfolios of the four incumbents continue to grow at low‑ to mid‑single‑digit rates each year.

Conclusion

The elevator and escalator industry’s economic moat—rooted in installed‑base lock‑in, technician density and regulatory barriers—remains firmly intact. Valuation multiples for the listed incumbents already discount much of that strength, leaving limited upside absent an acceleration in retrofit demand or a step‑change in digital‑services monetisation. Among the quartet, KONE offers the best risk‑adjusted entry point given its moderate multiple, net‑cash balance sheet and outsized optionality on emerging‑market urbanisation. Otis deserves its premium but is more exposed to potential regulatory challenges in the United States. Schindler provides dependable cash yield but requires faster digital convergence to close the productivity gap. Check out our monthly model portfolio updates to see which one makes it to our list.