China's air conditioning industry has come to a new strategic inflection point

December 6, 2021

Next, the problem faced by China's air conditioning industry is not to go left, increase large-scale expansion, break through the ceiling and go right to explore a new path of high-quality development, but to move forward bravely, expand scale effect, expand category lineup and broaden stage vision.
China's air conditioning industry, which has two giants Midea and Gree, has been born in the world's household air conditioning industry, and its development has also entered a new strategic inflection point

 

latest company news about China's air conditioning industry has come to a new strategic inflection point  0

 

First, in the household air conditioning industry, Chinese enterprises have established absolute scale advantages and competitive advantages, and have the right to define the market and price products; However, the scale and space of household air conditioning have appeared to varying degrees in both developed and developing countries. If you want to continue to grow upward, you can only expand the markets and needs of emerging countries, but it takes time, and the short term is not the direction;

 

Second, the global air conditioning industry still maintains a strong and sustainable development momentum, especially in addition to household air conditioners, including commercial air conditioners, heat pump air conditioners and other categories, all maintain a stable market demand; At the same time, under the trend of carbon emission reduction and carbon neutralization, some countries and regions are upgrading the consumption mode of air conditioning, no longer buying air conditioning hardware, but making air conditioning enterprises become operators of environmental energy; There are many hidden opportunities, but the operation difficulty is more complex, involving localization and joint venture operation.

 

Third, for Chinese air-conditioning enterprises, the Chinese market is only an important "strategic granary", but it is not the whole and only of Chinese air-conditioning enterprises. Similarly, the current business focus of Chinese enterprises has always focused on the global market of household air conditioners and the Chinese market of commercial air conditioners. However, in the overseas market, the private brands of household air conditioners, commercial air conditioners and cold and warm environment operators of other media are still in the early stage of exploration and have not formed an overall layout.

 

Fourth, compared with foreign-funded air-conditioning enterprises such as Daikin of Japan, carrier of the United States and Trane of the United States, China's air-conditioning enterprises have been low among similar enterprises in the world due to their long-term cultivation of the household market and their pursuit of large-scale benefits. Dajin can achieve a gross profit of 35%, while relevant American enterprises can maintain a gross profit margin of about 30%, but only a few Chinese enterprises can achieve a gross profit margin of 20%, most of which are only about 10%.

 

In other words, Chinese air-conditioning enterprises, which have dominated the global household air-conditioning market for many years, obviously can not be satisfied with the current situation, let alone stop here. As some home appliance dealers said, "now the home air conditioner really has no business. First, the profit is too low, second, the market is too curly, third, the demand has been fixed, and fourth, there is no room for imagination in the future."

 

From another point of view, for many air-conditioning enterprises in the Chinese market, household air-conditioning is indeed large-scale and in great demand. However, if there is no sufficient profit support, how can enterprises deliberately think about product technology and quality innovation, and how can they take more resources to observe users' needs, listen to users' voices, improve users' dissatisfaction, and take the initiative to innovate? Similarly, if they can't make money or make less and less profits, what are the thoughts of air conditioning dealers to do users' product experience, after-sales service and so on. Therefore, maintaining a certain operating profit is the premise and key to the healthy and sustainable development of all industries.

 

At present, with the continuous decline of gross profit in the household air conditioning market and the highly involution of competition, the leading enterprises such as Midea, Gree and Haier, which have occupied a place in the global air conditioning market, obviously can not continue to toss back and forth in the current industrial quagmire. They must be from the dimensions of business platform, business vision, market demand and user upgrading, Open up a new business situation. Specifically, the household appliance circle believes that there are several ideas:

 

First, on the basis of maintaining the large-scale advantages of household air conditioners, we should increase investment and expansion in commercial air conditioners, especially in the technology and products of some large central air conditioners; Based on the rear strategy of the Chinese market, actively seek breakthroughs in positional warfare in the global market, especially in the home of some enterprises such as Europe, America and Japan, so as to realize the common growth of the two business systems of household and commercial.

 

Second, we should take the air conditioning hardware products as the origin and actively transform to the energy and environment operators and service providers of families or communities. From single air conditioning equipment sales to regional energy scheme operation with air conditioning equipment as the main body, especially in some cities and countries, explore the provision of cooling capacity and heat, rather than simple air conditioning equipment sales, so as to integrate traditional air conditioning, water air conditioning, air energy heat pump air conditioning and other products. At present, it is also an attempt for many air conditioning enterprises to start with systematic air solutions with the help of scene advantages, but they should increase their steps and cooperate with the synchronous innovation of business model.

 

Third, we should dare to start with some "destructive" innovations, with the help of some "original" and "original" products and schemes, dare to sell high prices and fight high-end in the front-line market, form the synergy of real product power, brand power and scientific and technological innovation, and dare to define the world HVAC technology trend and product standards, And can not always be satisfied with a substantial lead in the Chinese market and an absolute lead in household air conditioning and other sub categories. We must break through with the courage and strength of "beating ourselves".

 

Although the Chinese air-conditioning enterprises in the past three or four years have encountered difficulties in development and growth ceiling in the Chinese market, the fluctuation of market performance of some enterprises also makes the outside world firmly believe that the good days of air-conditioning enterprises are over. However, the household appliance circle believes that the ceiling considered by the outside world is only based on the growth space and power of a single category, and there is a periodic shortage. It does not mean that the future space and stage of China's air conditioning industry have "come to an end". On the contrary, through category expansion, market exit and commercial break-up, China's air conditioning industry will find greater space and stage at the new strategic inflection point.