Source: bg.qianzhan.com (in Chinese)
Water heater sector has maintained a growing trend which begins last year in 2016, and seen stable growth. Gaining popularity in the 90s in China, this sector grows fast, especially in the golden age of property market.
Report on Investment Planning of China’s Water Heater Market suggests that retail sales volume of water heater sector registers 35.32 million units in 2015, a year-on-year increase of 4.4%, and retail sales register 54.4 billion Yuan in 2015, a year-on-year increase of 7.1%. In the first half of 2016, this industry posts a market size of 29.2 billion Yuan, a year-on-year increase of 12%.
We could see from above statistics that, though its growth rate slows down, water heater sector still stays in a stably growing period. It is worth mentioning that, its online sales maintain strong, and play a major part in its growth. In the first half of 2016, its online market size registers 4 billion Yuan, and the proportion it takes climbs to 14%, a year-on-year increase of 59%.
Competition in this industry intensifies with an increased number of emerging brands and product models. According to the same report, in the first half of 2016, brands on the market register 125, a year-on-year increase of 20%. Product models on the market register 3,225, a year-on-year increase of 25%. This signals fiercer competition and a reshuffle in the market. In addition, these newly developed selling points and functionalities bring variety to the market, and indicate a trend towards high-end smart products. With consumers’ preference on modern water heaters, emerging brands have a great chance to catch up. Modern products featuring high technology, energy conservation, safety and efficiency are expected to make a strong growing point.
A boom in brands also signals that water heater industry is getting saturated. The forthcoming market potential is expected to come from fast-growing rural markets, and smart, high-end, personalized products.
Smart water heater sector, with little unified planning and few standards, is in its infancy, and is set to expand as artificial intelligence technologies get mature.
In conclusion, water heater sector has great space to develop by following the trend towards smart high-end products. Rural area is a key battle field in the future. For industry players, more attention should be paid on energy efficiency, style, smart functionality and safety issues rather than price.