Georgia-Austria War -Pushes Air Conditioning

Georgia-Austria War -Pushes Air Conditioning

Date:Jan 02, 2020

[China Refrigeration Network] Looking back at the air-conditioning industry in 2019, the biggest attraction is probably the "Georgia-Austria War". Recently, Gree Electric Chairman and President Dong Mingzhu mentioned this matter again in his speech.  In fact, behind the competition between the old and new forces is the current situation that the air conditioning industry needs to upgrade in terms of quality, service and channels after entering the stock competition. With the implementation of the new target of air conditioning energy efficiency in 2020, the elimination of small and medium-sized mixed brand industries will accelerate.


Dong Mingzhu said bluntly, "We must have the courage to turn the blade inward and dare to shine the sword.  Gree Electric Appliance has always believed that national standards are the threshold for enterprises, and it is Gree's mission to make consumers have a better life.  Therefore, we dare to shine a sword and fight against Oxley in the air conditioning industry, and cannot be lower than the national standard ".


In June this year, a report aroused market attention. Gree Electric Appliance released "Report on Production and Sales of Unqualified Air Conditioning Products by Oxley Air Conditioning Co., Ltd." It reported the problem of production and sales of unqualified air conditioning products by Oxley Air Conditioning to the State Administration of Market Supervision under its real name.


There is no escape from the competition in the air conditioning industry.  With the "post-80s", "post-90s" and "post-00s" gradually becoming the main consumers, the continuous growth of the online market and the continuous shrinkage of the offline market are in sharp contrast.  According to Oviyun, in 2018, the sales volume and sales volume of China's air-conditioning online channels increased by 19.7% and 13.7% respectively, while offline channels decreased by 1.5% and 4.2% respectively.


However, Ox has already threatened the status of Gree and Midea, the two major air conditioning giants. During 2016-2017, Ox has used the e-commerce platform to increase its market share and brand influence, and successfully entered the ranks of the air conditioning industry giants.  Relevant data released by major e-commerce platforms in 2018 showed that Ox became the online sales champion with a sales volume of 5.89 million units.


Gree had to start paying attention to the online market and set up a wholly-owned e-commerce company with Dong Mingzhu as the legal person.  Gree has also reached a strategic cooperation relationship with Jingdong Home Appliances. It has successively launched high-end customized products such as Jingyi and Jingmu, and has jointly built a series of air conditioners with Ali Intelligence.


At the same time, other brands have not relaxed the expansion of online channels.  At the launch of Oakes 2019 Tmall double 11 and the launch of new products, Leng Ling, president of Oakes Appliance Group, said that Oakes' direct selling strategy on the Internet was not wavering, so the new products were selected to be sold on the e-commerce platform.


Industry insiders predict that in 2020, the online market competition among air-conditioning manufacturers will get even crazier.


It is worth noting that the new energy efficiency standard for household air conditioners, which has attracted much attention from the industry, is expected to be implemented from July 2020, just in time for next year's air conditioner sales peak season.  According to the information disclosed during the previous consultation, the revised new standard will greatly improve the existing air conditioning energy efficiency standard and accelerate the elimination of the production and sale of low energy efficiency products.  Before this, China has already published "Energy Efficiency Limits and Energy Efficiency Grades for Unit Air Conditioners" (GB 19576-2019). This standard for large air conditioning units will be implemented from May 2020, which greatly improves the current air conditioning energy efficiency standard.


In the view of Major General Jia Ding of the Sankei Observation Department, the implementation of the new air conditioning standard is a severe test for second and third line brands.  "It is quite difficult for tier 2 and tier 3 brands to climb the technological ladder facing the new energy efficiency threshold. Their short board on energy efficiency is obvious. The new energy efficiency standard will directly bring about an increase in the cost of air conditioning. After the overall air conditioning price reaches a new level, the advantages previously gained by tier 2 and tier 3 energy efficiency air conditioning depending on the price difference with tier 1 brands will be greatly weakened."  This means that many second-and third-tier brands may be eliminated in the new round of competition.


Liang Zhenpeng, a household appliance analyst, pointed out that in the final analysis, enterprises should strictly restrict and standardize their own behaviors. "Air conditioning is the product with the most quality and energy efficiency problems in all product lines in the household appliance industry, because the installation environment and use environment of air conditioning are particularly complex, and it is a semi-finished product, including indoor unit, outdoor unit and copper tube connector in the middle, which is easy to cause problems, so it is very important to know the quality of air conditioning products and the energy efficiency of heat and cold."


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