Source: CHEAA-run China Appliance magazine
An industry shake-up comes following a plunge in sales
Growing fast for around five years, air purification market enters a stage of adjustment with a sales plunge greater than most categories of home appliances. The sector posted combined sales value of 11.65 billion Yuan, a year-on-year drop of 30.8%, and sales volume of 5.076 million units, a year-on-year fall of 22.4% in 2018. The slide continues in 2019 with combined sales value of air purifiers from January to April down by 30.8% year-on-year to 2.6 billion Yuan, and sales volume down by 23.9% year-on-year to 1.204 million units, according to China Market Monitor.
The improvement in air quality is one of the major factors at play as the market has been driven largely by smog. Gu Jun, General Manager of Department of Indoor Decoration Products under Consumer Goods Division of 3M China, points out that, air purifier sales would not be clearly driven up unless a smog lasts for 3-5 days or more, which partly explains the lackluster sales of air purifiers in recent two years when the air quality of Northern China clearly improves.
The explosive growth in the past few years drew in a flock of opportunists with substandard products. This disrupted the market order and dented the trust of consumers, leaving them less driven to buy an air purifier.
The gloomy market presents an opportunity to shake up the industry. The number of players fell to 527 currently with 35% out of the game and some original equipment manufacturers who have just forayed into the market slowing down their moves.
Zhang Zhengkai, Senior Product Manager of Bosch Climate, believes the sluggishness is only temporary. “Air purifier embodies consumers’ pursuit of high quality life. We’re looking at air quality solutions beyond smog removing.”
Formaldehyde removing becomes a new area of focus
The improvement of air quality leads to a change in consumer demands. To reflect the change, industry players are putting weight on the R&D of air purifiers for formaldehyde removal which accounts for an increased market share by sales year by year.
Air purifiers for formaldehyde removal with CADR rating at more than 100m3/h accounted for 39.3% by sales in 2018, and the figure grew up to 41.9% from January to April this year, according to China Market Monitor.
Traditionally used to remove formaldehyde, activated carbon absorption cannot resolve formaldehyde, thus might cause secondary pollution with volatilized formaldehyde from air purifiers. To tackle this issue, Haier develops its amino acid long-lasting formaldehyde removal solution with Chinese Academy of Sciences; IQAir rolls out its formaldehyde resolving solution called ColdFire; YaDu uses platinum to oxidize formaldehyde at room temperature through its UFCO technology; Supor capatures formaldehyde with its Nanocaptur technology.
Meng Zhe, head of the air purifier division of Viomi, believes the future of air purification is not all about formaldehyde removal and he is not alone. A number of interviewee point out that, to change the game, consumers needs more education regarding air pollutants which, beyond PM2.5 and formaldehyde, includes germ, pollen, dust, cigarette smoke, and enterprises needs to continue their efforts in technology development which, according to Meng Zhe, is more about air cleaning solution rather than motor or filter upgrade.
Consumer needs go diversified
Consumer needs are going diversified.
Qiang Jihong, Senior Marketing Director of Home Care and Kitchen Appliance Division of Greater China Region of Philips, points out that indoor air quality pollution comes from multiple sources that include outdoor pollution such as PM2.5 and PM10, decoration pollution such as formaldehyde and methylbenzene, and allergens such as pollen, pet dander and mold. These pollutants drive consumers to look for diversified solutions. As consumers grew more aware of health, air purifier is expected to change from a smog removal solution to an absolute need of a family.
Some enterprises start to target particular audiences by rolling out, for example, baby and maternity use air purifiers. Pan Yong, General Manager of Sales of Broad, believes that, China’s two-child policy presents an opportunity for air purifier market and it will boost the sector to balloon.
Air quality sensor is also an area of focus. Embedded mostly at air outlet where fresh air goes out, air quality sensor cannot faithfully deliver the indoor air quality. Plus, the accuracy of it is an issue too. An industry insider bluntly points out that, some enterprises use sensors of low-accuracy out of economical consideration. As consumers pay growing attention to formaldehyde, many manufacturers add a display to indicate the concentration of indoor formaldehyde. Yet Meng Zhe believes that it is not possible to apply high-accuracy formaldehyde detector, priced over 10,000 Yuan, to consumer products.
Dedicated outdoor air system and air conditioner with filter will not pose much threat
The promising prospect of indoor air purification draws the eyes of manufacturers of other sectors who roll out air purification products such as dedicated outdoor air system with filter and air conditioner with filer to reflect the trend. Will this affect the development of air purifier sector? Most of our interviewee do not think so.
Air purifier makers believes dedicated outdoor air system is different from air purifier in essence. Zhang Zhengkai points out that dedicated outdoor air system is designed to improve room oxygen concentration and with a filter, it only cleans the air at the inlet when it passes through. Yet air purifiers do it repeatedly, offering an indoor environment cleaner than the former does. It doesn’t seem fair to measure the two against the same yardstick.
Dedicated outdoor air system makers hold a different view. The interviewee from Igoaltech believes air cleaning performance of some dedicated outdoor air system is no less than air purifiers when it comes to household use. Yet he adds that, “the market potential of air cleaning is huge. While two sectors are both at the primary stage of development with rather low penetration, they’re not really taking the market share from the hands of the other. In fact, the influence one poses to the other is not much.”
Regarding air conditioner with filter, an interviewee believes the filter is more of an added value. In fact, it is too small for household indoor air cleaning thus will not pose substantial threat to air purifier market.