Out of China’s 32 provinces, autonomous regions and municipalities, 22 were hit by severe smog in Dec 2016, and many of them issued red alerts. This created an explosive surge in China’s air purifier market. Enterprises, based on lessons learned the year before, have been well equipped with inventory, and thanks to this, the sudden shortage at the end of 2015 did not repeat itself. At the end of 2016, a surge in sales occured, reversing the downward trend of the market, and making the whole year market performance a rise.
Putting into force in March 2016, the new national standards play a part in driving product updating and phasing out substandard enterprises.
An increased market size with fewer brands
China’s air purifier market secured a general rise in 2016. Statistics from All View Cloud (AVC) suggest that, air purifier industry saw a sales volume 4.605 million units from Jan to Nov 2016, a year-on-year fall of 6.7%, and sales of 10.54 billion Yuan, a year-on-year rise of 6.1%. From Feb to Aug in particular, the sales volume slides year-on-year for each month, among which the lowest point registered a year-on-year plunge of 42.6%. In Dec, this weather-dependent industry finally reaped high sales. Statistics from China Market Monitor (CMM) suggest that, the market size of China’s air purifier industry registered 14.3 billion Yuan in 2016, a year-on-year increase of 21.4%, among which sales for Nov and Dec posted 6 billion Yuan. Zhao Qing, General Manager of Sales at Ya Du, says that, “Air purifier market is rationally growing. The market size of 2015 and 2016 registered 12 billion and 15 billion Yuan respectively, and it is expected to reach 20 billion Yuan in 2017. ”
Peng Jie, Director of Marketing at Lexy, introduces that, the new national standard drove enterprises, government departments as well as e-commerce platforms to update their market strategies. And enterprises were mostly reducing inventory and updating their products in the first half of 2016. For the second half, the industry went to its low seasons and saw flat market performance in general. The high seasons came at the end of the year, along with the smog.
The number of industry players has shrunken in 2016. According to CMM, from Jan to Oct 2016, air purifier brands registered 520 at online distribution channels, down by 75 compared to same period last year, and posted 129 at offline distribution channels, down by 13 year-on-year. Top 10 enterprises have continued to take a larger market share both online and offline. An unnamed industry insider believes that, more enterprises are to be phased out in 2017.
Domestic and international brands saw different performance in 2016. “For the past year, homegrown brands have been expanding presence, European and American brands remained strong, while Japanese brands started to slide.” Ran Hongyu, Founder of Beiangtech, says, “Chinese brands are getting competitive thanks to their continued efforts in product upgrading.” An interviewee believes that, the slide of some foreign-funded brands may come down to their neglect of new national standards and unfitting design to Chinese market.
An unnamed interviewee from a foreign-funded brand shared her views on this, “the new national standard focuses mainly on particulate matters, but PM2.5 is not the only cause of indoor air pollution, and certainly not the only consideration for an air purifier maker. To achieve best indoor quality, an air purifier must go beyond filtering PM2.5 to eliminating formaldehyde, methylbenzene, odors and more. The new national standard, with its focus on particulate matters, might cause enterprises to put their weight on only this indicator and consumers to misunderstand an air purifier as a PM2.5 remover. This is not an outright solution to indoor air pollution, and more importantly, fails to change the industry’s ‘weather dependent’ destiny”.
When it comes to the future of air purifiers in China, industry insiders are confident. An interviewee from Honeywell believes that, with a low penetration of air purifiers, China has great market potential. Air purifier industry is going more specialized and better regulated, and is expected to see a healthier development.
Change for better competitiveness
With new national standards in force, China’s air purifier industry ushers into a new era, transferring from a price-based competition into a technology-based one. Major industry players, including Phillips, Daikin, Panasonic, Honeywell, Ya Du, Lexy, have updated their products by new national standards before they officially kicked in. Year 2016 has seen an increased market share of air purifiers with CADR higher than 400m3/h and 700m3/h. According to statistics from CMM, from Jan to Oct 2016, online sales volume of products with CADR higher than 700 m3/h accounted for 6.9%, a year-on-year increase of 3%, and their offline sales volume accounted for 7.5%, a year-on-year increase of 2.7%. A Director from Panasonic tells China Appliance reporter that, to survive fierce market competition, an enterprise must go beyond national standards to create new added value, setting itself apart from rivals.
Despite compliance to national standards, major enterprises are going further to upgrade their products. Ran Hongyu from Beiangtech introduces that, “Beiangtech only rolled out a wearable air purifier series in 2016, because we put our efforts in optimizing existing products.” Zhao Qing from Ya Du says that, “Ya Du improves its technology in four aspects: (1) add formaldehyde detectors to our high-end products; (2) enhance human-machine interaction; (3) maximize cleaning capacity through technology rather than product size; (4) reduce purifying cycle to achieve high efficiency.” Phillips improves the cleaning efficiency of its products through its exclusive VitaShield IPS technology. An interviewee from Daikin believes that, new national standard draws a new starting line for all enterprises. And industry players may capitalize on this opportunity to improve their competitiveness with quality products and strong R&D.
China Appliance reporter has learned that, technology upgrading of air purifiers in 2016 involves mainly three aspects: (1) improve CADR and CCM, silence performance and energy conservation for better performance; (2) use air quality display, APP control, filter replacement reminder and multi-operation modes for better smartness experience; (3) add timer, child lock, casters to product design for more convenience. “Year 2017 is expected to be another incubating year for air purifiers. Industry players must continue to focus on consumer needs, and step up investments in R&D, smartness exploration and user friendliness.” An unnamed interviewee from Honeywell says.
Peng Jie from Lexy points out that, currently, no major breakthroughs have been made, which might fail to satisfy consumers’ needs in the second half of 2017. Besides, smartness must go beyond APP control. And formaldehyde cleaning performance needs more improvements.
China’s air purifier enterprises are looking at specific segments. Many of them rolled out baby-use products and wearable air purifiers in 2016.
After years of development, Austin Mecent subdivides product categories to meet consumers’ needs. Currently, products on Chinese market include all-in-one series, standard series, formaldehyde elimination series, allergy and asthma series, and baby series. An unnamed interviewee from Austin Mecent says that, “different user groups have their distinct needs. And based on precise study of specific market segments, Austin Mecent has reaped high sales. And sales for 2016 are expected to increase by 12% year-on-year.”
To meet users’ demand for air purification on-the-go, wearable products were rolled out by many enterprises including Beiangtech and Broad Group. Beiangtech rolled out a wearable product that can be integrated as a vehicle-mounted air conditioner. Airkangju released a ultra-light AS wearable air conditioner.
With great market potential, this industry has its issues to face. An interviewee from Panasonic points out that, “offline stores, with limiting factors such as cost of rent and people, do not see dazzling sales performance as online stores. How to improve offline sales? This is an issue that lies before the whole industry.” An interviewee from Daikin believes that, “enterprises must put more weight on R&D to explore new value of air and environment. This is also a goal for Daikin to reach.”