Source: CHEAA-run China Appliance

The 2019 financial year (from August 2018 to July 2019) or the so-called Cold Year of Chinese air conditioner industry ended with sluggish performance, posting sales value of 195.6 billion Yuan, down by 3.6% year-on-year, and sales volume of 56.77 million units, down by 1.7% year-on-year, according to All View Cloud.

Market performance from Jan to July 2019

The industry suffered a fall in both sales value and sales volume from January to July this year, with sales volume down by 0.6% to 41.14 million units and sales value down by 3.8% to 136.9 billion Yuan, according to All View Cloud. The fast-growing online sales shifted gears to slower speed after years of strong growth, posting online sales volume of 17.45 million units and value of 50.1 billion Yuan, up by 17.9% and 15% respectively, far slower compared to the growth rate of 2018.

Average price

As the sluggish market intensified competition, industry players started to cut prices to take a bigger slice of the pie. From January to July 2019, the average in-store price of air conditioners fell by 1.8% while average online price fell by 3.1%. The price cut covered basically all distribution channels and product models, from fix-speed products to variable-speed products, from freestanding models to wall-mounted ones. Of all models, freestanding air conditioners rated Grade 2 by energy efficiency (on a scale of 1-5 with 1 being the highest) sold at online channels suffered most with average price plunging by 16.3% while variable-speed wall-mounted air conditioners, as the most promoted product type on the market, fell by 7.7% in average online price and 4.7% in average in-store price.

It is learned that from January to July 2019, wall-mounted air conditioners charged at or under 2300 Yuan expanded by 8.8% in online market share while freestanding air conditioners charged at or under 4000 Yuan expanded by 6.7% in online market share.

Market concentration

Top 3 brands accounted for 74.7% of the online market from January to July 2019, up by 3.5% year-on-year, and 74.3% of the offline market, up by 1% year-on-year, according to All View Cloud. The air conditioner market is getting more concentrated as leading brands integrate resources throughout the industry chain to enhance competitiveness.

The vast market potential draws the eyes of new players. There are 71 brands at online market in 2019 by far, with 13 new entrants and 6 out of the market. Cross-industry brands such as Xiaomi and Suning gained a market share of 2.5% with their Internet-based sales mode. Under the threat posed by mainstream brands and cross-industry brands, the market space left for long tail brands got squeezed. From January to July 2019, Top 4 to Top 10 brands accounted for a combined market share of 18.7%, down by 5.2% year-on-year, while long tail brands only accounted for 4.1%, down by 0.8% year-on-year.

Product mix

By product, the proportion of freestanding air conditioners and wall-mounted ones is 2:8. The proportion changes by market according to the mainstream house type and consumers’ purchasing capacity. In first-tier markets where small apartments are the mainstream due to high house prices, wall-mounted air conditioners are the mainstream. The same was true for some third-tier and four-tier cities where house prices are high, though for most third-tier and fourth-tier markets, freestanding air conditioners take a larger share. When it comes to markets lower than fifth-tier, the market share of freestanding air conditioners drops due to consumers’ limited buying power.

Energy efficiency level is another factor that comes into play when consumers buy air conditioners. Variable-frequency air conditioners and energy efficient air conditioners are well recognized by the market. As of July 2019, variable-frequency air conditioners accounted for 84.2% of the offline market, up by 3.9% year-on-year, and 65.2% of the online market, up by 6.2% year-on-year.


Currently, Chinese air conditioner market shows the following trends: (1) the cooling real estate market restrains the growth of air conditioners; (2) the growth in urban areas where replacement needs become the mainstream is slowing down; (3) rural areas are expected to be the main driving force of growth.