Understanding the Current Situation and Future Development Trends of China’s Air Conditioning Industry in 2023

1. Development background: The country has introduced favorable policies and the industry has developed intelligently.
   Air conditioning, or air conditioner, refers to equipment that uses manual means to regulate and control the temperature, humidity, flow rate and other parameters of the ambient air in a building or structure. Air conditioning creates a more comfortable, beautiful, and healthy living and working environment for humans, provides people with coolness and warmth, and has become a necessity in modern family life. The upstream of China’s air-conditioning industry chain is the supply of raw materials such as metals, sensors and other major components, chips, and technologies such as the Internet of Things. The midstream is home appliance manufacturers, including well-known domestic and foreign companies such as Midea, Haier, and Gree. The downstream is the supply of online and offline products. Combined sales model.
2. Development status: Exports are far greater than imports, and the industry scale is becoming saturated.
   China’s science and technology is developing rapidly, and the technological innovation of household appliances is rapid. Home appliances are gradually becoming smarter. With the development of China’s air-conditioning industry, the industry has gradually moved from an incremental market to a stock market. With the continuous development of industrial technology and science and technology, China’s air conditioning industry has made significant progress in energy efficiency, environmental protection, intelligence and other aspects.
3. Enterprise dynamics: Industry concentration continues to increase, and enterprises’ independent innovation capabilities are enhanced.
   The development of China’s air-conditioning industry has gradually entered the mainstream. In terms of competition in the market, the market share of the top five brands in China’s air-conditioning appliance industry continues to increase, reaching 82.4% in 2022, an increase of 2.7 percentage points from the previous year. Among them, Gree, Midea, Haier Smart Home, Hisense Home Appliances and Oaks occupied 32.8%, 25.6%, 10.4%, 7.3% and 6.3% of the market share respectively, all achieving year-on-year growth. At present, leading companies in the industry have combined technology development capabilities and energy conservation and emission reduction requirements to vigorously develop new air-conditioning products with market potential. This has become the direction of many home appliance companies. Many companies have already made great efforts in solar application technology, smart grid technology, and logistics. Active and effective attempts have been made in aspects such as networked home appliance technology.
4. Development Trend: The industry has huge room for development, and “green + intelligence” has gradually become the mainstream
   The “Guiding Opinions on Promoting the High-Quality Development of Light Industry” issued by the Ministry of Industry and Information Technology pointed out that it is necessary to speed up the improvement of energy efficiency standards for end-use energy products such as household appliances and lighting products. At present, the country is actively promoting the “dual carbon” strategy, advocating energy conservation and emission reduction, rational use of green energy, and maximizing the development of green energy production efficiency. The development of the industry is affected by national policies. In the future, through technological innovation and progress, home appliances will become more convenient and close to the people, while at the same time, product quality will be more optimized, and the production and use processes will be more environmentally friendly. In order to further promote the development of China’s home appliance industry, companies continue to increase investment in research and development, adhere to high-end brand creation strategies, build leading sustainable growth capabilities, and continuously increase market share. Enterprises adapt to the current situation of consumption upgrading, cooperate with scientific research institutes and colleges and universities, absorb technology and talents, carry out development and research of core and common technologies in the industry, provide more intelligent products, and enhance the core competitiveness of enterprises.
   Keywords: air conditioning, green, energy-saving development, development trend

1. Development background: The state has introduced relevant policies to promote the green development of the industry
   Air conditioning, or air conditioner, refers to equipment that uses manual means to regulate and control the temperature, humidity, flow rate and other parameters of the ambient air in a building or structure. Air conditioning creates a more comfortable, beautiful, and healthy living and working environment for humans, provides people with coolness and warmth, and has become a necessity in modern family life. The upstream of China’s air-conditioning industry chain is the supply of raw materials such as metals, sensors and other major components, chips, and technologies such as the Internet of Things. The midstream is home appliance manufacturers, including well-known domestic and foreign companies such as Midea, Haier, and Gree. The downstream is the supply of online and offline products. Combined sales model.

In recent years, a number of national policies have been introduced to encourage the development of green home appliances and smart home appliances, which have had an impact on the development direction of the air conditioning industry. In terms of promoting the development of throttling appliances, the “Implementation Rules for Energy Efficiency Labeling of Multi-connected Air Conditioning (Heat Pump) Units” jointly issued by the National Development and Reform Commission and the State Administration for Market Regulation stated that the power generation efficiency and energy consumption ratio of air conditioners on the market should be controlled. In terms of promoting the consumption of green smart home appliances, the National Development and Reform Commission issued the “Notice on Several Measures to Promote the Consumption of Green Smart Home Appliances”. The document proposes to comprehensively promote the consumption of green smart home appliances such as smart refrigerators, washing machines, air conditioners, and smart health care. Encourage home appliance production and distribution enterprises to develop green smart home appliance products that adapt to the characteristics of the rural market and the consumption needs of the elderly. Encourage qualified places to provide relevant policy support for the purchase of green smart home appliances. The Ministry of Industry and Information Technology issued the “Guiding Opinions on Promoting the High-quality Development of Light Industry” emphasizing the need to accelerate the improvement of energy efficiency standards for end-use energy products such as household appliances and lighting products, and promote green and energy-saving light industries such as energy-saving air conditioners, refrigerators, water heaters, and high-efficiency lighting products. Product consumption. Improve government green procurement policies and increase the procurement of green and low-carbon products. Encourage qualified places to carry out green smart home appliances to the countryside and trade in old ones for new ones.

2. Development status: Exports are far greater than imports, and the industry scale is becoming saturated.
   According to data on China’s air-conditioning sales volume and sales amount from 2018 to 2022, in 2022, China’s air-conditioning appliance industry achieved sales of 57.14 million units, a year-on-year decrease of 3.3%; the sales amount was 196.9 billion yuan, a year-on-year increase of 28.95%. It is expected that throughout 2023, China’s air-conditioning appliance industry will continue to maintain its original market size and demand, benefiting from the continued recovery of domestic and foreign market demand, the continuous launch of new products, the acceleration of technological innovation, and the continued optimization of the policy environment. Factors, China’s air-conditioning industry is still in a relatively dynamic stage, but the gradual saturation of the market is an inevitable problem in the air-conditioning industry. For the household air conditioner market, it is predicted that the retail volume and retail sales of the household air conditioner market in 2023 will be 52.54 million units and 178.6 billion yuan respectively. This trend has significantly declined compared with 2022, affecting the growth of the household air conditioner market in 2023. The main factors include: domestic economic recovery and consumption rebound, structural recovery of the real estate market, climate change and extreme weather, product innovation and upgrading. In general, the development of the air conditioning market is closely related to economic growth and consumer demand. Against the background of economic growth and consumption recovery, there is still room for growth in air-conditioning sales and sales in the future. At the same time, as people’s pursuit of quality of life and demand for home comfort increase, and the current generation of air conditioners is about to be phased out, the home air conditioner market will also see a slight growth trend in the future.

Related reports: “2023-2029 China Air Conditioning Industry Market In-depth Analysis and Investment Direction Research Report” released by Zhiyan Consulting
China is a major producer and marketer of the air-conditioning industry. With the significant enhancement of independent innovation capabilities, the structure of China’s air-conditioning industry has been continuously optimized, product quality has been further improved, and domestic brands have gradually entered the international market. In recent years, China’s air conditioner industry has continued to maintain a trade surplus, and the import volume is far lower than the export volume. It is a major exporter of the air conditioner industry. In 2022, China’s air conditioner imports will be 13,600 units, a year-on-year increase of 312.12%, and exports will be 53.006 million units, which is the largest import volume. 3897 times; from January to July 2023, China imported 13,700 air conditioners and exported 40,406,800 units. The import value was 106 million yuan and the export value was 56.055 billion yuan.

3. Enterprise dynamics: Industry concentration continues to increase, and enterprises’ independent innovation capabilities are enhanced.
   The market share of the top five brands in China’s air-conditioning appliance industry continues to increase, reaching 82.4% in 2022, an increase of 2.7 percentage points from the previous year. Among them, Gree, Midea, Haier Smart Home, Hisense Home Appliances and Oaks occupied 32.8%, 25.6%, 10.4%, 7.3% and 6.3% of the market share respectively, all achieving year-on-year growth. At present, leading companies in the industry have combined technology development capabilities and energy conservation and emission reduction requirements to vigorously develop new air-conditioning products with market potential. This has become the direction of many home appliance companies. Many companies have already made great efforts in solar application technology, smart grid technology, and logistics. Active and effective attempts have been made in aspects such as networked home appliance technology.

Judging from the operating income of key enterprises in the air-conditioning industry, China’s air-conditioning industry has developed steadily. With economic development and increasing national demand, the operating income of Midea Group and Haier Smart Home has increased year by year. Midea Group’s operating income is higher than the other two companies, and its growth rate is faster. In 2021, the national economy will gradually recover after the impact of the epidemic. Midea Group’s operating income in 2021 will be 341.233 billion yuan, an increase of 20.06% from 2020; Haier Smart Home’s operating income Revenue is on an upward trend, with a relatively stable growth rate. Operating revenue in 2022 will be 243.514 billion yuan, a year-on-year increase of 8.02%. Affected by the “New Crown Epidemic”, more people are staying at home, offline sales channels have been frustrated, and operating income has decreased. In 2020, Gree Electric’s operating income was 168.199 billion yuan, a year-on-year decrease of 15.12%; in 2022, Gree Electric’s operating income was 188.988 billion yuan, An increase of 0.59% compared with the same period in 2021.

Judging from the air-conditioning business income of key enterprises, China’s air-conditioning industry is very mature, and the increase in downstream demand has promoted the rise in operating income. In 2022, the air-conditioning business income of Midea Group, Gree Electric Appliances, and Haier Smart Home will be 150.635 billion yuan, respectively. 134.859 billion yuan and 40.059 billion yuan. It can be seen that the air-conditioning business revenue of these three giants will show a growth trend in 2022. Among them, Midea Group’s air-conditioning business revenue is the highest.

Judging from the revenue in the first half of 2019-2023, Gree Electric’s air-conditioning business revenue accounted for a higher proportion of total revenue than the other two companies. In 2019, Gree Electric’s air-conditioning business revenue accounted for 69.99%. In 2020, Gree Electric’s air-conditioning business The revenue proportion was 59.49%, a year-on-year decrease of 10.5%. In 2021, Gree Electric’s air-conditioning business revenue proportion reached the highest value in recent years at 78.31%. In addition, Midea Group’s air-conditioning business revenue accounts for between 40-50%, ranking behind Gree Electric Appliances. Midea Group’s air-conditioning business revenue accounted for 49.92% in 2021, which is the highest proportion of air-conditioning business revenue in recent years. Haier Smart Home’s air conditioning business revenue only accounts for 14%-22%.

4. Development Trend: “Green + Intelligence” has gradually become the mainstream trend in the industry, and the development prospects of the international market are good
5. The country vigorously promotes the green development of the electrical appliance industry, and enterprises improve the technical requirements for air conditioner manufacturing.
   The “Guiding Opinions on Promoting the High-Quality Development of Light Industry” issued by the Ministry of Industry and Information Technology pointed out that it is necessary to speed up the improvement of energy efficiency standards for end-use energy products such as household appliances and lighting products. At present, the country is actively promoting the “dual carbon” strategy, advocating energy conservation and emission reduction, rational use of green energy, and maximizing the development of green energy production efficiency. The development of the industry is affected by national policies. In the future, through technological innovation and progress, home appliances will become more convenient and close to the people, while at the same time, product quality will be more optimized, and the production and use processes will be more environmentally friendly. In order to further promote the development of China’s home appliance industry, companies continue to increase investment in research and development, adhere to high-end brand creation strategies, build leading sustainable growth capabilities, and continuously increase market share. Enterprises adapt to the current situation of consumption upgrading, cooperate with scientific research institutes and colleges and universities, absorb technology and talents, carry out development and research of core and common technologies in the industry, provide more intelligent products, and enhance the core competitiveness of enterprises.
6. The international market development prospects of the air-conditioning industry are good, and China’s air-conditioning will increase exports in the future.
   With the development of science and technology, air conditioners continue to achieve new breakthroughs in technical performance, including the guidance of energy conservation, emission reduction, low-carbon life and other policies, as well as the promotion of energy conservation and benefit subsidy policies. Frequency conversion technology, clean heating methods, etc. have also been continuously promoted. With the development, microchannel heat exchangers are gradually emerging. This will directly drive the development of air conditioners in the direction of high efficiency, energy saving, and environmental protection. The health and comfort of air-conditioning products are getting more and more attention. Domestic enterprises have also introduced, digested and absorbed health, energy-saving functions and appearance design, and their technical level and product quality are constantly improving. Although China’s air-conditioning export market still faces many challenges, such as the unstable international economic situation and trade protectionism, China’s air-conditioning technology continues to improve, and the international influence of the industry has significantly increased. Overseas markets will become an important growth point for China’s air conditioning industry in the future.
   The above data and information can be referred to the “2023-2029 China Air Conditioning Industry Market In-depth Analysis and Investment Direction Research Report” released by Zhiyan Consulting. Zhiyan Consulting is a comprehensive provider of information and intelligence in the field of industrial consulting in China. The company takes “using information to drive industrial development and empower corporate investment decisions” as its brand concept. Provide professional industrial consulting services to enterprises. The main services include high-quality industry research reports, special customization, monthly special topics, feasibility study reports, business plans, industrial planning, etc. Provides regular reports and customized data such as weekly/monthly/quarterly/annual reports, covering policy monitoring, corporate dynamics, industry data, product price changes, investment and financing overview, market opportunities and risk analysis, etc.
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