Small brand air-conditioning companies will find it difficult to survive

Nowadays, the narrow market space and insurmountable technical barriers have become a roadblock for many small brand air conditioner companies. Industry experts expect that with the implementation of the latest energy efficiency standards for inverter air conditioners this year, the air-conditioning industry will face a new “reshuffle period” and a large number of small air-conditioning brands will face the threat of being eliminated. In this situation of internal difficulties and difficulties, small brand air-conditioning companies will become increasingly difficult to survive.

Demand slows down to squeeze living space

The domestic air-conditioning market is becoming saturated and there will not be much growth in the next few years.

After experiencing the trough of the cold year in 2012, China's air-conditioning industry entered a period of in-depth adjustment, the overall market is relatively weak, and air-conditioning demand has slowed down. According to the White Paper of the 2013 Refrigerated Annual Air-Conditioning Market in China published by the National Information Center, the sales volume of air-conditioners in major cities in China in the cold year increased by only 2.92% year-on-year, and the market growth rate was very slow.

“At present, the domestic air-conditioning market has become saturated, and there will not be much growth in the next few years. Although there is a need for upgrading in the primary and secondary markets, there is also room for growth in the tertiary and tertiary markets, but these market spaces are relatively It is relatively small and will not have a significant impact on the overall market,” said Hong Shibin, deputy director of the China Home Appliances Association’s Marketing Committee, who told China Electronics News.

In this saturated market environment, competition in the air-conditioning industry will increasingly focus on product structure adjustments, technology renewal, core technology mastery, and meeting diversified needs. Compared with large-brand air-conditioning companies, the survival pressure faced by small brands will increase, and the brand “Matthew Effect” will intensify.

In fact, the domestic air-conditioning industry has formed the situation of Gree, Midea, and Haier’s “three oligarchs”. In addition, the second-tier brands of Hisense Kelon, Oaks, and Chih-won also need to share a share. The market share left by small-brand air conditioners is very small. . According to data from Zhong Yikang, Gree, Midea, and Haier occupy more than 60% of the market share, and the top 8 brands share more than 80% of the market share. Commanders such as Commander, Xinfei, Soy, Putian, and Yuetuo have many small brand air conditioners. The market share is less than 0.1%.

Under the highly concentrated market pattern of the brand, the living space for small-brand air conditioners has become more and more cramped, among which the weaker ones are in danger of being eliminated by the market. Guo Zhigang, home appliance analyst Yang Zhigang, said: “The market share of the top three brands is unlikely to decline. This pattern has been unable to break. In the long run, small brand air conditioners are in a profitable state, and profits are not going. Small brands will certainly be eliminated and slowly disappear." For more than 30 small air-conditioning brands in China, this is certainly not good news.

Technical threshold is hard to pass

Small air-conditioning brands, such as lack of R&D capabilities, have begun to appear.

Since 2008, the country has successively introduced policies to stimulate consumption such as home appliances to the countryside, energy subsidies, and trade-in replacements. Many small air-conditioning brands have been able to develop and grow. However, with the continuous withdrawal of policies and the introduction of a new round of energy efficiency standards, small air-conditioning brands are facing more and more difficult conditions for survival. The “congenital deficiencies” such as insufficient research and development capabilities, slow technology updates, and lack of core technologies are starting to appear.

It is reported that from October 1 this year, China's latest energy efficiency standards for inverter air conditioners has officially started. The new standard will increase the limited value of energy efficiency of inverter air conditioners from the current 3.0 to 3.9. Now, the level 1 and 2 energy efficiency air conditioners will automatically drop one level to 2, 3 levels. Moreover, the new standard will raise the entry threshold for the air-conditioning market from Level 5 energy efficiency to Level 3 energy efficiency.

Experts in the industry expect that the introduction of the new standard will have a huge impact on the existing product structure, technology, scale, and channels of the air-conditioning industry. The industry will face a new “reshuffle period”, which currently accounts for 30% of the total air-conditioning market. Energy efficiency air conditioners of Class 4, 5 and 5 will all be out of the game, and those small air-conditioning companies with low energy efficiency and low prices will face higher industry barriers. “The national policy is currently being tilted toward big brands. Energy efficiency standards, subsidy policies, etc. make big brands more conducive to survival. The technical threshold is getting higher and higher for small brands. Many small air-conditioning brands will face the threat of being eliminated.” Hong Shibin told reporter.

The failure of their own technology and the frequent occurrence of product quality problems are also “unexplainable pains” for small brand air conditioner companies. It is understood that in August this year, the AQSIQ revealed that the quality of certain models of air conditioners such as Mitsubishi, Sakata, and Soy had been unqualified. The problem involved rated intermediate cooling capacity, speed-controlled room air conditioner energy efficiency rating, and continuous Harmful voltage, protection against touching live parts, etc.

In addition, the current demand for air conditioning in the primary and secondary markets mainly comes from the upgrading of products. High-quality, energy-efficient high-end air conditioning products are increasingly welcomed by consumers. For air-conditioning companies, research and development of high-end air-conditioning products require strong technical support and adequate funding. Obviously, it is difficult for small air-conditioning brands with limited funds, insufficient R&D capabilities, and lack of core technologies to squeeze into these markets.

“Upgrading technology and upgrading technology are the future direction of the air-conditioning market. If the technology is not closed, customers will not pay. So when buying high-end air-conditioners, customers will tend to choose big brands, and it is unlikely to spend 78,000 pieces. Money to buy a small brand of air conditioning." Yang Zhigang told reporters.

Differentiation can survive

Big brands do not want to do, differentiated products, small brands can do it.

Analysis of the industry pointed out that the development of rural markets, take the differentiated route will be the final brand of air-conditioning "life-saving straw."

Compared with other white goods, air conditioners entered Chinese households later, and their retention rate in the rural market was still relatively low. According to statistics, in 2012, the urban air-conditioner ownership rate in China was 126 units per 100 households, and in rural areas it was only 24 units. It can be seen that rural areas still have great potential for development under the condition that the overall air conditioner market is weak. In addition, rural consumer brands are less sensitive and more inclusive of small brands. "The third and fourth line market is a growth pole, and the growth rate is even faster than the first and second line markets." Xu Dongsheng, secretary general of the China Household Electrical Appliances Association, said: "In the rural market, small brand air conditioner companies that differentiate products and take differentiated market routes Maybe we can find some living space."

Cai Ning, Minister of Home Appliances, China Household Electrical Appliances Research Institute, also believes: “If small brands want to survive, they should pay attention to the third and fourth-tier markets and open up space in small towns and rural markets. Those big brands are unwilling to do the difference. Products, small brands can do it.” He also pointed out that the air-conditioning industry has a great relationship with the macro economy. Real estate development and urbanization will all contribute to the air-conditioning market. As long as real estate develops steadily, urbanization steadily advances, and there is still a certain market for small brand air conditioners in rural areas and small towns.

However, with the increase in the attention of large brand air conditioner companies in the third and fourth-tier markets and the continuous extension of product lines, the pressure faced by small-brand air conditioners in the rural market is increasing day by day: although there is room for development, if it cannot grow bigger and stronger In the future, not only will there be a huge market risk, but also the difficulty of breaking through will increase. “In the long run, these small brands still have a big gap with the big brands in terms of their overall technical strength and channels. If their own technology is not hard and their quality is not high, it is still difficult to develop, and it may only be a flash in the pan. "Tsai Ning told reporters.

expert's point

Xu Dongsheng, secretary-general of the China Household Electrical Appliances Association: Small brand operations vary by brand, and some brands operate well. The current penetration rate of air conditioners in the rural market is relatively low, and some small brand companies that make differentiated products will find some living space.

Cai Ning, Minister of Home Appliances, China Household Electrical Appliances Research Institute, is a place where small brands can fight with big brands. Some small brands outsource after-sales service to other big brands, which is not conducive to their own development in the long run and will be subject to the big brands.

Guodu Securities, home appliance analyst Yang Zhigang: The third and fourth-line air-conditioning markets have room for growth due to their low inventory, but the growth rate will be very slow. These annual growth rates will also be between 5% and 10%, and it is difficult to exceed 10%. At present, the overall growth of the industry is slow, and increasing operating income depends on increasing the unit price of the product. Therefore, it is the future development direction of the air-conditioning industry to upgrade technology and upgrade technology.