The growing air conditioner market in China

The air conditioner market in China has been enjoying growth for decades. While the economy is slowing down, the number of Chinese people who need and can afford ACs keeps increasing. Though the cooling industry seems to be a playground for big names, new and smaller companies can still compete with the right marketing strategy.

In 2021, the demand for air conditioners in China was higher than in any other region. As the country is experiencing overwhelming heat waves during summer, the air conditioner market is growing. China is the largest manufacturing and consuming air conditioner market, accounting for over 40% of the global air conditioner market.

In this blog post, we will take a look at the China air conditioner market and see the possibilities for foreign air conditioner manufacturers.

China air conditioner market overview

In China, air conditioning used to be rare in the past, but there are now more air conditioners in China than in any other country in the world. Sales continue to skyrocket, according to a report by the International Energy Agency.

Even though the US currently uses the most electricity for air conditioner usage, it will soon be overtaken by China, as the energy China spends on air conditioning is now growing dramatically. As the world’s largest air conditioner-consuming market, China is now representing over 40% of the global air conditioner market.

As you can see in the graph above, the Chinese air conditioner market experiences the biggest demand worldwide. According to research, China’s air conditioner market is expected to grow from $33 billion in 2020 to $42 billion in 2025, which is the biggest growth rate in the world.

When it comes to the residential air conditioner segment, nowadays around 60% of people in China have at least one air conditioner in the house, but the air conditioner market outlook shows that this number might grow up to 85% by 2030.

What’s driving the demand in the air conditioner market in China?

There are many reasons for such a high demand for air conditioners in China. For starters, year-on-year China is recording records in high temperatures, due to global warming. This year, for many days during summer, the temperatures in south central China like Shanghai, Chengdu, etc. were reaching 40 degrees. With the high humidity of the region, these are unbearable conditions to live in, therefore, a lot of people hide inside to cool off with air conditioners, contributing to higher space-cooling energy consumption.

Additionally, China’s air conditioner market is fueled by the rapidly increasing population in the cities, with middle-class income families and rising disposable income. Many more people can afford to have an air conditioner nowadays, contributing to leading demand on the domestic market, especially for rather affordable product offerings.

Finally, south, south-central, and southwest China don’t use heating and there are rarely heaters to be found in Chinese homes. Although people in Guangzhou or Hainan might not need them at all, places like Shanghai, Nanjing, or Chongqing get pretty cold during winter. Therefore, Chinese consumers use AC also for heating their homes during winter months.

Competition Landscape

During the past five years, the market has been developing steadily at an annual rate of 9.6%. Therefore investment from domestic and foreign enterprises hasn’t stopped increasing in recent years.

Big manufacturers in the world – LG and Samsung Engineering Construction from Korea; Panasonic, Mitsubishi Corporation China, Fujitsu, and Hitachi from Japan; and Fedders from the United States – have all established their brand names in China.

Meanwhile, local companies have gained an advantage in-home air conditioners. Midea(美的), Haier Electronics Group (海尔), Gree Electric Appliances (格力), and Chigo (志高) are the top 4 Chinese domestic air conditioner manufacturers. Among them, Gree Electric Appliances INC is the largest air conditioner producer, also the largest air conditioner supplier in the world.

Nowadays all of these companies are competing to offer the best products to their consumers. They need to follow the trends to not lose to their competitors, like; the production of energy-efficient air conditioners for cost efficiency, chiller-type air conditioner, window-type air conditioners, split-type air conditioners, floor standing air conditioner type, and so on.

How to sell your products in the China air conditioner market?

To sell any product in China, the most important thing to do is to take care of branding. China air conditioner market is no different. It’s especially important in all technological sectors, as Chinese people are a very advanced and tech-savvy nation, keen on any novelties and the best quality of products.

Chinese consumers almost never buy products from brands that they never heard of. As the competition in the air conditioner market is big and so is the growing demand, especially in the residential sector, you need to build a presence in the market so that Chinese consumers will be willing to invest in your products.

There are many ways to build good branding in this competitive landscape, and we will present a few most efficient ones;

Chinese website and Baidu search engine optimization

Baidu is the number one search engine in China. It owns more than 70% of the market share and has an extensive ecosystem of platforms that are helpful for users and brand owners to build brand awareness and e-reputation within the platform.

If you want to be visible when Chinese customers are looking for air conditioners, you have to compete for top-ranking positions on the first pages of Baidu. It’s best to do it by having a Chinese website, hosted on Chinese servers (Baidu favors those over foreign sites).

As Baidu’s algorithms are different from those of Google, you should tailor your SEO strategy and optimize your website and its content accordingly. You can also use Baidu’s forums, like Baidu Tieba or Zhidao, to create communities around your brand.

Besides SEO, you can also run ads on Baidu which means you pay to get top positions on top pages for certain keywords that you choose. Ads create instant traffic; however, this traffic is not as high-converting as traffic generated organically thanks to SEO.

Here is what shows on Baidu when we search for 空调（air conditioner)：

Online PR helps with good e-reputation

Chinese people are heavily influenced by branding due to a long history of being scammed and cheated. They are cautious about new brands. Therefore, establishing e-reputation is key to your success in this market.

Being present and mentioned by official media channels, prestigious websites or popular forums contribute significantly to your brand credibility. In the maze of China’s media landscape, it takes a great deal of understanding and experience to select the right media to maximize your budget.

We think one of the best websites for air conditioners is PCHOME.net. This website is dedicated to consumer electronics such as household appliances, laptops, mobile phones, cameras, and of course air conditioners. You can find many brands, like Shanghai Hitachi Household Appliances, Daikin air Conditioning Systems, Toshiba Carrier Air conditioning, Gree Electric Appliances, and many more for your reference.

Chinese social media for the best visibility

Last but not least, Chinese social media!

With an estimated 9 out of 10 Chinese netizens owning at least one account on social media, having a proper profile on Chinese social media will definitely benefit your brand awareness and sales.

Wechat

The main social media platforms in China are WeChat, Weibo, Little Red Book, and Douyin. Among them, WeChat is the most widely used in China with more than 1.26 users as of 2022. It is, at the core, an instant messaging mobile app developed by Tencent (also the father of QQ). As a brand, you can create an official account on WeChat. From there, you can perform different actions and activities to attract new fans and engage with your customers. You can also create your own

Weibo

Another social media you may consider is Weibo. Weibo is basically a microblogging platform where you can reach more users outside of your follower base with different content formats or influencer marketing.

Online word-of-mouth marketing on Little Red Book and other platforms

Online word-of-mouth is prevalent in China since Chinese consumers love sharing information, opinions, product reviews, or recommendations on social media. Therefore, brands should not only be present there and publish useful information for their fans but also invest in discussions revolving around their expertise as well as answer any concern/ question from fans or mitigate negative feedback.

One of the best platforms for word-of-mouth marketing is Xiaohongshu/Little Red Book, where users share their recommendations and reviews about products they use. There are also many influencers from different sectors, that can help you reach the biggest audience of potential consumers.

For example, Xiao Mi, one of the tech giants in China, used to sell more than 800,000 units instantly during launch thanks to the social media effect.

Selling your products online

Online shopping has become an indispensable part of life for the Chinese. Online shopping offers cheaper prices, more diverse products, a lot of promotions, and convenience and now even includes entertainment activities (social commerce).

The fastest way to get your products to the Chinese market is through online selling channels. The two main e-commerce platforms for air conditioners are Jd.com and Tmall.com.

Tmall

Tmall.com or 天猫, Tian Miao in Chinese is an e-commerce website released in 2008 for B2C. It sells several products such as branded products, apparel, cosmetics, and so on. Tmall belongs to the Alibaba group led by Jack Ma.

JD.com

The second platform you should get on is JD.com or Jingdong Mall (京东商城). JD was founded in 1998 by Liu Qiangdong. It is now headquartered in Beijing and is one of the most popular B2C e-commerce platforms in China.

It involves some work and techniques to set up your store there, and then make your products appear in top positions for relevant keywords. A team of Chinese e-commerce experts can help you save a lot of time and effort required.

But what is important to know is that entering those platforms shouldn’t be your first step in China, as building the brand’s presence is more important at first, because no one will buy products from your brand if they never heard of it.

Contact us to sell your air conditioners in China

We are China digital marketing company with more than 10 years of experience in the Chinese market. Over the years we worked with more than 600 brands from different sectors, helping them grow their sales in China’s competitive landscape.

We offer tailor-made solutions for our clients, adapting to their needs. Here are some of our services:

If you’re interested in working with us on your project, don’t hesitate to leave us a comment or contact us, to schedule a free consultation with one of our specialists!