Air Conditioner Market in China I Market Research

25Jul2015

Market Research: Air Conditioner in China

The Air Conditioner Market in China

Air Conditioner Market in China. Until recently, Chinese people bought cheap fans in the summer. After the beginning of the 21st century, a growing number of Chinese people could afford air conditioners to keep rooms cool and comfortable. In recent years, international air conditioner brands gradually lost their market share in China. However, they make more profits through converter technique as well as selling core components and parts. This big potential market gives more places for Chinese domestic brands to grow and expand.

Chinese top 4 air conditioner brands：Midea(美的), Haier(海尔), Gree(格力) and Chigo(志高)

Midea(美的), Haier(海尔), Gree(格力) and Chigo(志高) are the top 4 Chinese domestic air conditioner producers. Among them, only Gree and Chigo are air conditioner companies, while Haier and Midea have a larger product offering. Gree(格力), founded in 1991 in Zhuhai(珠海), is now the biggest air conditioner producer in the world. It controls its own research development, production, sales and CRM(Customer Relationship Management). Gree air-conditioning is the only “World famous brand” in the air conditioner market in China. In 2013, Gree achieved 88.517 billion RMB as their annual income and generated 37.35% year-on-year growth. As a listed company, Gree appeared on American 《Fortune》 magazine for 8 years, as “Chinese Big 100 listed companies”. At the same time, its brand value is worth $13.708 billion, ranked No.51 in China. 2008 was a unique year for Gree as they gained more than 8.8 million users all over the world and was awarded in the list of “Chinese most competitive brands” for its brand image and brand vitality.

Distribution of Chinese domestic air conditioner brands

Midea drives their retail business through wholesale sales. Its wholesalers are responsible for the distribution in China. There might be several wholesalers in one area and Midea supplies products to them and they distribute the products to retailers. The price that retailers fix is determined by the manufacturer. The manufacturers take charge of sales promotion and asked their wholesalers for the list of their retailers. Retailers are responsible for installation and after-sale service. As a result, Midea’s method of distribution saves its marketing costs and utilize wholesalers’ capital. On the other hand, it may cause confusion of their unsteady distributions.

Famous international central air conditioner: Daikin(大金) and York international(约克)

Chinese companies have gained an advantage in home air conditioners. However, in the market for central air conditioners, a Japanese brand, Daikin, which was founded in Osaka in 1924 and the US brand, York International, which was founded in 1902 own a large market share not only in China but globally. Dakin is the best seller of central air conditioners in China and York International is the world’s largest air conditioner manufacturer.

The revenue for the air conditioner market in China in 2015 has reached a total of 89 billion dollars up to 5.7 compared to the previous year. 232 companies are actually running within this industry and during the past five years, the market has been developed steadily with revenue growing at an annualized rate of 9.6%. Therefore the investment from domestic and foreign enterprises hasn’t stopped increasing in recent years, the worldwide major manufacturers that have been settled in China are Fujitsu, LG, Samsung, Panasonic, and Fedders. The Guangdong province has a huge concentration of domestic and worldwide companies from this industry, generating 60.5% of the total industry revenue.

While the increase in mercury made pPurring air conditioners, the increase in access to the air conditioner in developing countries constitutes a bomb ticking for the planet. According to some scenarios, freshness warming–backed race could multiply by ten by the end of the century energy needs and an increase of 23 billion tons annual global emissions of greenhouse gasses.