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China's air-conditioning industry: from world's leading production scale to world's quality champion

Adam WANG SHANGHAI MEGA

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Rise of China's air-conditioning industry: from world's leading production scale to world's quality/brand champion
2018-12-22 08:41:17
https://www.toutiao.com/a6637611153956536839/
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Looking back on the 40 years of reform and opening up, China's home appliance industry has achieved world-renowned achievements. According to data released by the China Household Electrical Appliances Association, in the past 40 years, the scale of China's household electrical appliance industry has climbed from 423 million yuan in 1978 to 1.5 trillion yuan in 2017, a year-on-year increase of more than 3,000 times, achieving a dramatic change from quantitative change to qualitative change.

As the largest category of Chinese household appliances, air-conditioning is not only the leading force of Chinese household appliances, but also the first industry in China to achieve globalization. Through more than 30 years of transformation and upgrading, China's air conditioners have achieved global scale of production scale and sales scale. However, a cruel fact is in front of all Chinese air-conditioning companies. According to relevant data from the Ministry of Commerce, foreign trade enterprises with their own brands account for about 20% of the total exports, and private brands account for about 11% of total exports. Most Chinese air-conditioning companies choose to export their foreign exchange through OEM, but they have always been included in the low-end and low-end range of overseas consumers.

Nowadays, standing in the new starting point of reform and opening up, China's air-conditioning industry, which has emerged from the world market, is seeking a new round of transformation: iteration and leap from scale to brand. The biggest promoter behind it is Haier Air Conditioning. In the past 20 years, it has embarked on a “self-created” road overseas, allowing 1 billion users in more than 160 countries around the world to pass through a Haier Logo outdoor unit on a global basis. High-end residential quarters, business parks, and universities and other places, "Haier Air Conditioning Wall", re-recognize Chinese brands, and trust and trust Haier because of the superior quality and reputation of air conditioners.

From the scale of dominance to the brand king, why is Haier air conditioning?

In recent years, when “depending on the sky” has been unable to promote the continued growth of air-conditioning enterprises in the local market, overseas markets have once again become a new strategic location. However, the long-term operation model of “exclusive export and foreign exchange earning”, although releasing the manufacturing capacity of China's air-conditioning industry to a certain extent, failed to realize the output of differentiated competitiveness of Chinese enterprises in terms of technology, quality and brand, and soon In the wave of change of the times, there is a lack of stamina.

As we all know, there have been two major paths in the globalization of China's household electrical appliance enterprises: one is to export foreign exchange, to sell surplus capacity and low-cost manufacturing advantages, but to sell globally, but often only left the "made in China" branding situation, scale Big but never means competitive strength; the other is export creation, based on the company's own technology, quality and reputation for the global users. Based on a long-term strategy, having a brand and core technology, you need to be able to withstand loneliness and take years to settle.

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As the representative of China's home appliance export brand, Haier is the only company in the air-conditioning industry to export with nearly 100% of its own brands. As early as 2017, it has a 22% share, ranking first among China's own brands of household air-conditioners, and successfully taking the lead. 10 NO.1 in domestic and foreign markets. Even in the most professional, competitive and concentrated European markets in the world.

As early as 2015, with Haier smart home appliances achieving phased results in the European market, Haier Air Conditioning Co., Ltd. first cooperated with real estate developers in Russia to promote smart communities, all using Haier smart air conditioners. As the largest intelligent community in Russia, Haier Air Conditioning Wall has become a beautiful landscape of the community. Up to now, 141 buildings in 8 smart communities in Russia have erected “Haier Air Conditioning Wall”.

In Malta, which is known as “Southern Switzerland”, Haier Air Conditioning has once again become the number one market, which is also the industry champion that has surpassed the Japanese and Korean brands for three consecutive years. In Malta, Haier air conditioners have used the 21-year market share to achieve No.1 from 0, becoming the most recognized Chinese brand among local users.

The most spectacular is that in 10 countries around the world, such as Malta, Russia, the Czech Republic, and Italy, there is a densely populated “Haier Air Conditioning Wall” that both Chinese tourists and overseas Chinese are proud of, reflecting the recognition of Haier brand by local market users. trust. In the end, Haier air conditioners will set off the value of the Chinese air-conditioning industry, quality reputation and brand banner on the world stage.

In fact, in the past 30 years, on the stage of the world air-conditioning market, the brands that are deeply trusted by users are all from developed countries such as Europe, America, Japan and South Korea, from Electrolux and Whirlpool in Europe and America, to Panasonic and Samsung in Japan and South Korea. Occupies the C position of the market. How does Haier air-conditioning achieve a sudden emergence in the context of "solo struggle"? What are the core cheats behind the Haier air-conditioning brand that has gained the trust of users from all over the world?

In Malta, Haier also found the earliest export of Haier air conditioners in Europe: at the foot of a mountain in northern Malta, there is a quaint villa area, a two-storey villa, a bright and new Haier air conditioner is 4 meters high. The living room is working. In the face of the most typical Mediterranean climate of the Matte, hot and humid, air-conditioned indoor and outdoor machines, regardless of appearance or core components such as computer boards, are vulnerable to sea breeze corrosion. This Haier air conditioner entered Robert's home in 1995. In the past 20 years, both the appearance and the cooling effect have been very good, so users never thought about replacing a new air conditioner.

Excellent product performance and excellent product quality, not only conquered Robert, let him always proudly recommend Haier air conditioner to the left neighbor, and also let Haier air conditioner in the European and American and other overseas markets, conquer more and more pursuit The middle class of quality life. As a result, this also brings confidence and direction to other home appliances that are promoting independent brand management in overseas markets: unswervingly taking the road of quality, continuously promoting quality improvement, and finally realizing the brand in the local market through the reputation of users. Rise.

From operating the market to operating users, how can Chinese brands sail the world?

Standing on the new starting point of the 40 years of reform and opening up, for China's home appliance industry, especially air-conditioning enterprises, how to achieve the leap from the scale of the first, the foundry king to the brand king in overseas markets is not only related to the next 40 years of development. The issue of motivation and direction of change also involves the proposition of how to continue to lead the development of industry.

Undoubtedly, air-conditioning enterprises must intensify innovation, implement more active and proactive innovation strategies for different countries, different environments, different families and users, and form an all-round, multi-level and wide-area innovation pattern. In this regard, Haier air conditioner once again gives its own answer, that is, the transition from the operating market to the operating users, so as to create a "lifetime user" in overseas markets.

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To this end, Haier has established a three-in-one strategy of “localized manufacturing, localized research and development, and localized marketing” in the global market many years ago. Based on global R&D, manufacturing, marketing resources and systems, Haier and GE Appliances are based on Haier and GE Appliances. Casa Di, Commander, AQUA and other multi-brand clusters accelerate the development of manufacturing, R&D and marketing from all regions, and based on the quality and reputation of the brand, directly to the user for differentiated business exploration.

As industry experts have said, the rise of a truly world power depends on the country's own world-class, globally competitive enterprises, relying on high-value products to create the value of the experience of global consumers. From one side of the "Haier air-conditioning wall" to a "three-in-one" localization strategy, these fully release the value and responsibility of Haier air-conditioning in the world market exploration and transformation.

In 1999, after Haier Air Conditioning entered the Italian market for the first time, it launched a new layout of high-end creation through localization of R&D and marketing: continuous output of intelligent products represented by circular imperial air conditioners; R32 environmentally friendly refrigerants In the field of air conditioning, it shares a 99% share with the other two brands; for the convenience of users, Haier also launched an intelligent selection tool on the official website of Italy, allowing users to quickly obtain information on the purchase and installation of air-conditioning products.

In the face of the US market, in order to better meet the Housing Authority's integration requirements for the installation and construction of air-conditioning pipelines, Haier relies on an open and innovative ecological platform, not only in parallel with GE Appliances to form professional resources, but also with representatives of US manufacturers. The organization and the US design institute work together to design an air solution that is energy efficient, -30 ° C ultra-low temperature heating and the most reasonable installation.

The above-mentioned cases have been happening all over the world in the past 20 years, and we have jointly woven the huge user trust system of Haier air-conditioning brand in overseas markets. As the most intuitive result, whether it is the US Quincy City on the other side of the ocean, the city of Bandung in Southeast Asia, or the luxury hotel in Shanghai Pudong New Area, the Haier Air Conditioning Wall is built on the side of the road. From the user's trust in the brand.

It can be seen that as the entire Chinese manufacturing seeks globalization and the rise of China's home appliance industry in the pursuit of global brands, the “Haier Air Conditioning Wall” not only shows the brand's own growth path, but also has a strong road made in China: Based on the high-quality performance of products, we continue to win the reputation and trust of users; based on forward-looking new technologies and new experiences, we have won the brand recognition and heart of users, and finally achieved the simultaneous take-off of quality and technology, brand and word of mouth, and jointly paved the air conditioners in China. The road to industrial upgrading.

In the past 40 years, the Chinese air-conditioning industry has changed from “one poor and two whites” to the “one of the best” on the world stage. The commercial road released and reflected is based on the global creation of Haier air-conditioning. Dare to compete with the world in terms of brand strength and user trust.
 
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I thought midea is the biggest player for air con in China?
 
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Gree Sets Up Semiconductor Unit to Help China Make Chips at Home

LIAO SHUMIN

DATE : AUG 22 2018/SOURCE : YICAI

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Gree Sets Up Semiconductor Unit to Help China Make Chips at Home

(Yicai Global) Aug. 22 -- Chinese appliance maker Gree Electric, best known for its air conditioners, has set up a CNY1 billion (USD146 million) chipmaking subsidiary after several claims that it would enter the semiconductor business as the country looks to reduce reliance on imports.

Gree is the sole shareholder in Zhuhai Zero Border Integrated Circuit, while the new unit's legal representative is Dong Mingzhu -- Gree's chair and one of China's most successful businesswomen -- according to data from the National Enterprise Credit Information Publicity System. The firm's registered business scope covers a broad range of areas, including chipmaking, the Internet of Things and software for mobile devices.

The firm announced in April that it would not pay out dividends for 2017, the first time in over a decade. Instead, Dong told shareholders that the company would be using the profit to foray into other sectors, particularly chipmaking, in which Dong said she was prepared to invest as much as CNY50 billion -- or more than double last year's net income.

Semiconductors have been a hot topic in the world's second-largest economy after the United States reprimanded one of China's biggest telecoms equipment makers, ZTE, in April for illegally selling American technology to Iran and North Korea and failing to punish employees behind the scheme.

The US forbade domestic companies from selling technology to the firm, bringing ZTE to a standstill until American lawmakers lifted the ban after US President Donald Trump stepped in. ZTE may have escaped the ordeal, but the debacle highlighted major holes in China's domestic chip development.

In order to nurture its own semiconductor unit, Gree plans to quadruple revenue to CNY600 billion (USD87.7 billion) within five years, Dong said in June, adding that by 2019 she expects all of the company's air conditioners to be using its own chips. The half-decade goal might seem farfetched, but income soared 45 percent annually to CNY150 billion in 2017, with air-con sales making up about 82 percent of all revenue. If it wants to hit the target, it will need income to increase by an average of just under 32 percent a year.

https://www.yicaiglobal.com/news/gree-sets-semiconductor-unit-help-china-make-chips-home
 
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As long as our domestic brands still need to use Japan compressor, we can't make such delusional claim.
 
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