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.
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THE EXPLOSION OF THE AIR CONDITIONING MARKET IN CHINA
In China, air conditioning used to be rare in the past, but there are now more air conditioners in China than 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 of AC, it will soon be overtaken by China, as the energy China spends on air conditioning is now growing dramatically.
The growing demand for air conditioners in China is fuelled by the rising population with higher purchase power, rapid urbanization, development of infrastructure and global warming.
As the world’s largest air conditioner consuming market, China is now representing over 40% of the global air conditioner market.
China’s air conditioner sales have increased rapidly over the last few years – the total air conditioner annual sales volume in China jumped from 137.9 million units in 2011 to over 160 million units in 2016.
The household ownership of ACs has increased from 3.5 percent in 1995 to 60 percent in 2018.
Growth will not stop there by any means. According to statistics from the National Bureau of Statistics, ownership of air conditioners per 100 households in urban areas is 107.4 units and in rural areas 34.2 units. Meanwhile, China’s urbanization is continuously expanding, reaching 56.1% in 2015 and is expected to reach 60% in 2020 and 70% in 2030.
With urbanization underway, air conditioner market has a lot of room to grow further in the near future.
232 companies are actually operating within this industry.
During the past five years, the market has been developing steadily at an annual rate of 9.6%. Therefore the investment from domestic and foreign enterprises hasn’t stopped increasing in recent years.
Big manufacturers in the world – LG and Samsung from Korea; Panasonic, Mitsubishi, 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(海尔), Gree(格力) and Chigo(志高) are the top 4 Chinese domestic air conditioner manufacturers.
Among them, Gree is the largest air conditioner producer, also the largest air conditioner supplier in the world.
HOW TO SELL YOUR AIR-CONDITIONERS IN CHINA?
1. Search optimization on Baidu
China’s internet population is the largest in the world with 802 million people now actively using the internet and over 81.1 percent of the population are search engine users. Over 60% of Chinese consumers do extensive research before purchasing a product or service with the majority of the research being done on Baidu.
Baidu is the number one search engine in China. It owns more than 80% of the market share!
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.
As Baidu’s algorithms are different from those of Google, you should tailor your SEO strategy and optimize your website and its content accordingly.
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)：
Read more about Baidu and its marketing strategies here
2. Selling your products online
Online shopping has become an indispensable part of life for Chinese. Online shopping offers cheaper prices, more diverse products, a lot of promotions, convenience and now even includes entertainment activities (social commerce).
The fastest way to get your products to the Chinese market is to through online selling channels.
The two main e-commerce platforms for air conditioners are Jd.com and Tmall.com.
They both rank top in China Internet Magazine’s TOP 100 E-Commerce companies in China, just after Taobao.com.
- 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, apparels, cosmetics and so on. Tmall belongs to the Alibaba group led by Jack Ma.
- 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 on top positions for relevant keywords. A team of Chinese e-commerce experts can help you save a lot of time and effort required.
3. Online PR helps with brand credibility
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 a 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.
4. Chinese social media and e-reputation
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.
The main social media platforms in China are WeChat, Weibo, Qzone, QQ, and Ren Ren. Among them, WeChat is the most widely used in China with 68% of adult Chinese using WeChat. It is, in 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.
Another social media you may consider is Weibo. Weibo is basically a microblogging platform with more than 222 million active users in China alone.
As you can see, Phillips has more than 135 000 followers on Weibo.
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.
Xiao Mi, a growing Chinese tech company, used to sell more than 800,000 units instantly during launch thanks to social media effect.
However, Xinhua’s official Wechat account in 2016 published a post accusing Xiao Mi of selling fake and low-quality products. This post was then shared quickly across social media, affecting Xiaomi brand name significantly.
Social media is a double-sword tool that should be used wisely.
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