Opportunities for Chinese air conditioning industry in the Olympic year

Opportunities for Chinese air conditioning industry in the Olympic year

According to survey data from domestic scientists from the state council in China the global climate plant AC reached 89.77 million units in 2007 and China had become the AC manufacturing headquarters with 70% of world production. Although there are some general export problems and trade liberalities facing Chinese exporters the Chinese AC industry together with governments has now established a relatively sound mechanism and technical basis in areas such as environmental friendliness and energy efficiency.

Opens all channels

In order to be exposed to the growing demand for the domestic AC market the AC industry in China is now heading for diversified distribution channels. In the recently introduced home appliance policy for towns where the government provides grants to rural residents for the purchase of approved electronic goods the government wants to attract regional distributors to bid for the eligible products so that a sophisticated commercial distribution model can be established in the rural areas of China . Although AC products are not in the eligible products category AC manufacturers and franchise distributors can still use similar distribution concepts to open and consolidate third and fourth level markets rural and small cities.

By the end of 2007 Gree a major electronics brand in China had more than 4000 brand stores nationwide whose sales volume accounted for 50% of Grees total. And another brand AUX has also announced that it will open 3000 brand stores in the country in 2008. Therefore as the prospect of AC products becomes qualified goods in the near future and major AC brands penetrating new market segments AC switches market in China is expected to expand further.

Based on the above reasoning it is possible in the next few years due to the full landing of advanced products in the first and second markets the opening of third and fourth markets the development of internet sales channels and export market conditions most AC distribution channels in China should have positive prospects.

More advanced performance

Research results from the state council also indicate that on the one hand due to improved living standards Chinese consumers are no longer satisfied with basic temperature adjustment functions when it comes to selecting AC products. On the other hand the authorities environmentally friendly and energy efficient requirements become higher and higher. As a result in addition to the basic temperature adjustment features AC manufacturers are construction products that can meet peoples energy efficient healthy and fashionable requirements.

Compared with the newer health question energy efficiency and decorative properties are older but still popular. It is reported that the government will raise the energy efficiency requirement for AC products to a new level in 2009 so it is expected to see a series of new energy-efficient ACs transports promoted in 2008 and 2009. And due to recent home improvement years many female buyers are now shopping more and more about AC panel materials patterns and colors.

The premium strategy can be an effective strategy for AC manufacturers to expand their value propositions but a premium is not always equal to high prices. Many Chinese AC companies do not currently have premium products but premium brands. This Olympic year could be a great opportunity for Chinese changers to develop their brands from Made in China to Created in China by adding additional features to products to continuously meet consumer demands. For example experience in marketing in well-known retail chains and extensive tracking services of foreign brands can allow consumers to enjoy their high level of experience.

Better services

The so-called 30% and 70% manufacturing processes for AC products as well as their seasonality have played a major role in the aftermarket services of AC products. Chinese AC manufacturers are now being tested on all fronts from aftermarket premises installation speeds and quality guarantees year for cleaning and maintenance issues. These are also challenges for AC companies who hope to create brand values.

With regard to aftermarket services major AC manufacturers like Gree Midea and Haier have been leaders in the domestic industry which is also one of the reasons for their usual winning of major construction projects. In the end aftermarket service quality is determined by a companys overall capacity. Take examples of Haier who has long treated services as the core of their brand building. During the widespread snow storm disaster in southern China at the end of January 2008 Haier established its own emergency response groups so that AC service needs in affected regions can be up to date.

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