Source: CHEAA-run China Appliance
The slowing down growth of dedicated outdoor air system (DOAS) might leave the impression of a slide in market size, but the truth is, the sector is still growing only at a speed slower than expected. The growth rate was around 50% from 2014 to 2016, halved in 2017 and further shrank to 14.97% in 2018 according to ChinaIoL.com.
Heading into 2019, DOAS embraces an opportunity to expand thanks to the trend of fine decoration in housing market and the development of online channels. Gu Jun, General Manager of Department of Indoor Decoration Products under Consumer Goods Division of 3M China, tells our reporter that, DOAS expanded at a high speed in the first quarter of 2019 at online channels, posting online retail sales volume of 11,563 units, up by 181% year-on-year and sales value of 67.51 million Yuan, up by 187% year-on-year. The interviewee from Igoaltech, a DOAS maker working particularly on projects, reveals that, project market outperformed retail market by a reasonable number in Q1.
The number of brands on the market booms to around 1000 according to incomplete statistics from an interviewee. Of them, Xiaomi and Yadu step up their efforts in DOAS; Igoaltech goes out of air purifier business and expand wholeheartedly in DOAS; some renowned home appliance makers such as Hitachi and York are looking at the sector too.
What makes it a strong momentum sector? DOAS has become a common setup of villa and is recommended as a significant part of a comfortable home to consumers by home furnishing designers. Plus, consumers get to learn more about the product thanks to the entry of internet brands including Xiaomi, which fuels retail sales effectively. Last but not least, the concept of a healthy and green house drives its penetration in finely decorated houses too. The interviewee from Igoaltech points out that, the concept of passive house also points to a promising future of DOAS.
Ceiling DOAS, the mainstream of the market
Out of the three common DOAS products-ceiling-mounted, wall-mounted and freestanding, ceiling-mounted DOAS takes the largest share of the market, and it is gaining further ground. Wall-mounted products stay popular in retail market and online market with a clear rise in sales. Freestanding products, at rather high prices, only makes a small share.
Each of the three types has advantages and drawbacks that you need to balance with your needs. Ceiling-mounted product takes little room space, making it a great choice for new houses, but its super slim body could only allow for small-size filters, which could easily get clogged and cause high noise. Wall-mounted product is more favored by households with finished decoration, but this unidirectional airflow system requires separate installations at each room. High-cost freestanding product, with large airflow and strong air cleaning performance, takes large room space.
Xiao Jianwei, President of Dream Maker, reveals that ceiling-mounted products dominate the market by sales as the most commonly used type in project market which accounts for 70%-80% of the DOAS market. He points out that, “currently, a number of enterprises sell DOAS as an affiliate product to central air conditioner at a low price, but the airflow and air cleaning performance is very limited.”
The interviewee hold different views regarding future trends. One of them believes that, celing-mounted models will remain popular as the trend of fine decoration goes on. Xiao Jianwei votes for freestanding models for its strong air cleaning performance and flexibility in application though taking a rather large space. Meng Zhe believes that, ceiling-mounted models will remain competitive for new homes, but as first-tier and second-tier cities slow down house construction, existing market or households with finished decoration will unleash large demands which could power the sales of wall-mounted products.
Trends
DOAS enterprises are working on airflow volume, cleaning performance and noise level technically.
Xiao Jianwei tells our reporter that, the functions enterprises taut such as for formaldehyde removing, odor removing and pollen removing mostly come down to the volume of airflow which will strengthen air cleaning as well as ventilation performance.
Filter upgrading is also a point of focus. A filter should be replaced after two to three months of use given the quality of air and filter, which is a high cost for consumers, an industry insider says.
DOAS sector is looking for formaldehyde removing solutions as air purifier makers do. Ding Wei, Senior Vice President of A. O. Smith and President of A. O. Smith China, introduces that, A. O. Smith has rolled out a line of wall-mounted DOAS products and is developing formaldehyde removing DOAS products at a lower cost.
Packaged solution is a trend too. Bosch’s freshly developed parallel system of HRV and heat pump provide an energy-efficient, environmentally-friendly packaged solution to customers. Igoaltech rolls out a packaged solution that combines DOAS with air purifying to offer consumers a home that can breathe. Xiao Jianwei says, Dream Maker is also looking at packaged solution which he believes is the future of DOAS though costs high and have a high requirement on products currently.
Installation is an issue to be addressed too. Meng Zhe says, some consumers would put on hold the idea of purchasing a DOAS product considering the damage it might cause to the wall in the installation of wall-mounted or freestanding DOAS.
Some air conditioner makers add DOAS to freestanding and wall-mounted air conditioners. Will this affect DOAS sector? One of our interviewee believes the impact will not be significant. DOAS-equipped air conditioners offer limited fresh air to avoid the noise large airflow might cause. Plus, the small-size filter on the product only allows for low air cleaning capacity with CADR at around 100m3/h. What’s more, with a penetration rate of less than 1%, the DOAS sector has large market potential to be tapped by DOAS makers or other players.
Prospects
The interviewee are bullish on the prospect of the sector. Gu Jun, points out that, though growing at a steady rate, China’s DOAS sector has just set off with less than 1% new houses equipped with DOAS compared to developed countries such as the U.K., the U.S and Japan whose DOAS-equipped new houses take up more than 95%.
Under China’s tightened housing policy, real estate developers are working on fine decoration, passive house and prefabricated building, which is expected to unleash the market potential of DOAS sector. Plus, it is learned that schools, hotels and offices will be key areas of focus for DOAS makers down the road.