Image source @ Visual China
Text | Parity School, author | Zero Nine, editor | Zhao
Typhoon embryos, water vapor, cold air poured out, in recent days, many places in the country ushered in the largest range of rain and snow weather this year. Under the fierce attack of wet and cold magic, the coldest Spring Festival in several years has also arrived.
At this time, the call of "no heating unfairness in the south" resounds throughout the entire network again, reflecting the huge demand for heating in areas lacking central heating in China.
In the next decade, will the South have a 100-billion-level heating market? On the basis of the increasingly improved living conditions, people's desire for warmth in winter has also increased sharply with the times. It seems that all companies are intent on seizing the heating market, which looks like a good business.
However, behind people's general demand for heating, the heating market has also shown a rather segmented trend from many aspects. According to the statistics of Yiou Network, there are four major categories and dozens of products in the heating market alone; consumers in different regions also have very different tendencies to various heating appliances.
In this unprecedented cold Spring Festival, the heating market, which is known as 100 billion yuan and launches a "dark war", is it worth being optimistic? This article explores this issue from the following aspects:
1. The categories of heating equipment are complex, is the most common heating appliance really so easy to sell?
2. What is the trend of the heating business of companies engaged in the manufacture of heating equipment, and what is the contribution to the overall performance?
3. What do consumers value more about buying heating equipment, and can the current market meet their requirements?
There are many types of heating equipment, and they are not so easy to sell
Liu Yang, who stayed in Wuhan for the New Year this year, bought a split heater early last month. He told me that after the temperature dropped sharply below 5 degrees, he turned up the heating temperature of the air conditioner, but the room became extremely dry. After using the heater, his daily body in the room felt much more comfortable.
In this winter, like Liu Yang, there are not a few users who buy heating appliances for the pursuit of a more comfortable body feeling, and even many have begun to prepare during the Double Eleven.
According to Jingdong data, between October and November 15 last year, the sales of platform heating equipment exceeded 4 million units. Tmall data shows that during the Double Eleven period last year, the turnover of graphene heaters increased by more than 150% year-on-year, and the number of sales increased by nearly 200% year-on-year.
At present, in the area south of the Huai River in Qinling, where there is no central heating, the mainstream heating equipment is divided into air conditioning heating, gas wall hanging furnaces, heating appliances and other small heating items. However, due to the impact of air conditioning heating on indoor humidity, as well as the cumbersome and high cost of gas wall hanging furnace installation, relatively low-priced heating appliances seem to be closer to the mainstream.
The heating appliances are divided into skirting board heaters, European-style fast heating stoves, electric oil heaters, electric film heaters, heaters, heaters, infrared heaters, small suns, electric stoves and other specific products, a variety of categories make people a little dazzling.
The heating appliances of the three giants in China are in the product category Figure/Billion EuroNet
However, as far as offline sales are concerned, among the dozens of heating appliances, only three or four of them sell relatively well, and because most of the "warming appliances" can only be sold for one quarter, stores and brands are not willing to hoard too many goods.
In a flagship store for home appliances in Wuchang District, the salesman in the heating appliance area told me that since the beginning of winter, the better selling is the skirting board heater and the electric oil tinge, and recommended me a split skirting board heater priced at 1299 yuan.
Part of the heating appliances of the home appliance store odd and even pie shooting
However, this 1299 skirting board heater is not enough to cover the needs of the whole house heating, in response to the question about the use of area, the salesman said that a single heater is normally recommended to be used in a room of about 15 square meters, it is best not to exceed 20 square meters.
When I asked about relatively cheap categories such as small suns and infrared heaters, she said that this kind of electrical appliances sell more online, basically no users come here to buy, and these appliances have certain safety hazards.
In the huge electrical appliance store, although the types of heating appliances are not small, the overall occupied area is only the same area as a brand TV showroom.
Unlike air conditioners, water heaters and other electrical appliances that must be used for at least half a year in a year, the use time of heating appliances generally does not exceed one quarter. Therefore, the home appliance stores here will generally put heating appliances on the shelves around November, but after March, they will remove the heating appliances from the counter.
The only exception may be the heater, the salesman of the home appliance store pointed to a Midea heater and said that this heater can not only be used as a heating appliance, but also has a humidification function. When it is not so hot in the summer, it can also be adjusted to normal fan mode as a cooling fan.
But the price tag next to the machine shows that the price of this heater is 2999 yuan, which is not only more than double the price of the previously recommended skirting board heater, but even more expensive than the 1.5-horse air conditioner of many first-line brands.
Heating equipment with a price of more than 600 parity filming
The boom in offline heating appliances does not look as good as expected. A closer look at the online consumption data can find that people's demand for warmth in winter is not all solved by heating appliances, and many small local heating products are also among the "heating equipment" in market promotion.
On November 23 last year, Jingdong released a "cold consumption trend", the data shows that many local heating products also have a high degree of heat, such as electric heating moxibustion moxa leaf velvet waist protection, warm table cushions, heating insoles, foldable foot warmers and other turnover increased by more than 100% year-on-year.
Search for these products on Jingdong, the vast majority of the unit price is within 100 yuan, such as the heat insoles are as low as close to 1 yuan / piece, the product technology content is not high, and the profit margin is not large.
In addition, the tendency of different cities to heating methods also affects the sales of heating appliances. "Cold Protection Consumption Trend" shows that the consumption of unheated areas such as Guizhou, Hunan, Shaanxi, and Chongqing that uses electrical appliances for heating accounts for more than 60% higher than the national average.
The proportion of electrical heating consumption in some areas is high Figure/ Jingdong "Cold Protection Consumption Trend"
However, in Jiangxi, Shanxi and other places, residents pay more attention to the consumption of down jackets, plush coats and other heating clothing. In Chongqing, Zhejiang, Anhui and other places, the consumption of local "precision" heating products such as electric heating waist pads, warm table mats, and heated insoles accounts for a relatively high proportion.
From the perspective of consumer use, it is not difficult to find that heating appliances and local heating products are considered to be their own duties, and the choice of which one depends more on the preferences of regional consumers for direct feedback on warmth. Small and medium-sized heating appliances such as skirting board heaters, electric heating can meet the heating needs of a single room, but the warm feedback to consumers is less direct than waist protection, table mats, which directly act on heating products.
For companies that intend to enter the heating equipment market, local heating products are obviously inferior to heating appliances due to their low cost and low sales prices. The allure of making heating appliances is perhaps much greater than that of these small products.
However, the specific way to enter the game still needs to be determined according to the preferences of consumers in different regions for heating methods, at least in some areas, heating appliances are really not so good to sell.
Specializing in heating equipment may not be a good business
So, what is the development status of the enterprises that currently occupy the main market share of heating equipment? What kind of trend can these pioneers in the heating market reveal to the companies that intend to enter the market in the future?
According to the statistics of Aowei Cloud Network in 2021, in the whole year of 2020, the top five in the domestic heating appliance market are Midea, Gree, Emmett, Pioneer and TCL. In addition to the two major integrated home appliance giants of Midea and Gree, Panasonic, Haier, Oaks, Mijia and other brands in the top ten of the list are also integrated home appliance companies. In other words, heating appliances belong to the subdivision of these companies", rather than their main direction.
Aowei cloud network 2020 heating appliance brand market share odd and even pie mapping
Emmett and Pioneer, the two companies in the top ten that are relatively focused on heaters, have also expanded their home appliance territory in recent years. In addition to manufacturing heating appliances, electric fans and other two-season products, but also in the development and sales of air net, dehumidifiers and vacuum cleaners, steam mops and other small household appliances, such a business layout also highlights the current heating appliances market limitations.
Taking the two higher market shares of Emmett as an example, Emmett's 2020 annual report shows that its revenue of electric heaters fell from NT$2.558 billion in 2019 to NT$1.937 billion in 2020.
The proportion of electric heaters in Emmett's annual revenue fell from 25.22% in 2019 to 21.04% in 2020, and the annual output also decreased by 50% from 1.79 million units in 2019 to 880,000 units in 2020. In addition, although Emmett's electric heater category has 20 series, the number of 353 products is only 55% of the 646 products of electric fans in its other main business.
The proportion of electric heater revenue has declined significantly Figure/Emmett annual report
While the proportion of the electric heater business declined, the proportion of revenue in the electric fan business of Emmett in the two years from 2019 to 20 remained 64%, and there was no significant decline; the revenue of small household appliances increased from 431 million to 833 million, and the proportion of revenue rose from 4.25% to 9.05%.
Even for companies like Emmett, which is regarded as focusing on heating appliances, the relevant indicators of its heating appliance business account for a considerable proportion of the company's overall business, and it shows a downward trend in many aspects. The long and low business of heating and small electrical appliances also highlights the gap in the use time and scene between heating appliances and household appliances.
Even Emmett itself said in the annual report that in the future, it is necessary to reduce the seasonal influencing factors, avoid eating in the sky, and alleviate its revenue gap in the off-peak season through brand rejuvenation and the launch of new products such as more small household appliances.
In addition, the enterprise investigation data also shows that the number of new domestic heating appliances in the past three years has shown a downward trend, the number of which has dropped from 1282 in 2019 to 843 in 2020, and only 342 in 2021.
In addition to the heating appliance market, the "Cold Protection Consumption Trend" shows that gas wall hanging furnaces are the fastest growing category since November last year, with a growth rate of 586%. There are also many companies competing in the domestic wall hanging furnace market.
Among them, the foreign brands that sell gas wall hanging furnaces include Germany's Vaillant, Fisman, Japan's Linnei, etc., and domestic brands include Haier, Midea, Wanjiale, Wanhe and so on.
2021 wall-hung furnace online market sales share Figure/ Aowei cloud network
Most of the above-mentioned foreign brands focus on the field of gas heating, and the business revenue is considerable. For example, Lin Nei's revenue in the most recent fiscal year reached 22.7 billion yuan, and Vaillant's revenue in the most recent fiscal year was 18.4 billion yuan. However, its revenue not only includes gas water heaters with higher utilization rates, but also related to the nearly 80% penetration rate of wall-hung furnaces in developed countries and regions.
As for the domestic, the data of the Huajing Industry Research Institute shows that the penetration rate of domestic wall hanging furnaces is less than 15%, and the better performance indicators of foreign brands in wall hanging furnace heating are obviously not strongly related to the domestic market.
Most of the domestic wall hanging furnace brands in the market are no different from the brands in the heating appliance market, and do not take heating equipment as the main or core business. Haier and Midea are integrated home appliance companies covering many fields, such as Wanjiale and other brands, and gas wall hanging furnaces are not important business segments.
The only exception among many brands may be Wanhe, Wanhe's 2020 annual report shows that its domestic hot water business, which includes gas wall hanging furnaces, is its second main business, with revenue of 2.841 billion yuan, accounting for 45.32% of the total revenue.
However, this proportion and amount have declined compared with 2019, in 2019, Wanhe's domestic hot water business revenue is still 3.356 billion yuan, accounting for 53.95% of the total revenue, the company's largest business; but in 2020, after the domestic hot water business suffered a downturn, its largest business has been replaced by a kitchen appliance business with revenue of 2.992 billion yuan, accounting for 47.72%.
The sales volume and production volume of Wanhe domestic hot water products also showed a downward trend in 2020, with sales falling from 5.028 million units in 2019 to 4.742 million units in 2020, down 5.68% year-on-year; production volume fell from 5.078 million units to 4.54 million units, down 10.61% year-on-year. The sales volume and production volume of kitchen appliances increased by 11.29% and 22.47% respectively.
Wanhe domestic hot water and kitchen appliances two major businesses of this and the other Figure / Wanhe and 2020 annual report
In addition, the cost proportion of Wanhe's investment in the domestic hot water business was also surpassed by the kitchen appliance business in that year. Among them, the cost of raw materials decreased from 1.726 billion to 1.612 billion, and the cost of raw materials for kitchen appliances increased from 1.579 billion to 2.008 billion.
However, the gross profit margin of Wanhe domestic hot water products is as high as 35.58%, which has certain advantages over the gross profit margin of 20.81% of kitchen appliances.
However, on the whole, Wanhe's emphasis on domestic hot water products, including wall-hung furnaces, is obviously declining. This also reveals that it will take time for heating methods such as wall-hung furnaces combined with hot water heating to be popularized, and they have not yet been optimistic about Wanhe.
From the perspective of the above-mentioned enterprises engaged in the manufacture of heating equipment, heating appliances are affected by various factors such as the time limit of use, and their income-generating ability is difficult to support the enterprise as the main business, more as the layout of the subdivision field.
Although the gas wall hanging furnace can meet the demand for hot water in the whole house while heating, it is more promising than a single heating appliance. However, its penetration rate is still linked to the living standards of different regions, and most of the current cities in China do not have the environment to promote gas wall hanging furnace heating in a large area.
Just focusing on making heating appliances or gas wall hanging furnaces may not be a good business at the moment.
What do we need to warm up in winter?
For users of heating equipment like Liu Yang, although heating at low temperatures is just needed, the cost of purchasing and using heating equipment is also an important factor to consider when choosing a heating method.
Liu Yang told me that he spent 899 yuan to buy this split heater, and in the past month, he would open it when he arrived home after work, and then close it after getting up in the morning. Last month's electricity bill was about 200 yuan more than before, although some expensive, within the acceptable range.
In large home appliance stores, the price difference between different heating appliances is obvious. The price of a single small electric heater is within 200, the price of the electric oil tank ranges from 500-1000 yuan, the price of the skirting board electric heater is 800-1500 yuan, and the price of the heater is more than 2000 yuan.
The use of wall-hung furnaces and radiators to install whole house HVAC solutions has the highest upfront cost. Odd even pie asked AO Smith and The sales staff of Wanjiale, AO Smith's single wall hanging furnace price is more than 10,000 yuan, radiator 2000-3000 yuan a group, the whole house needs 3-4 groups, the total price is close to 20,000 yuan. Wanjiale's wall hanging furnace is about 7,000 yuan, radiator 1500 yuan a group, the total price is also more than 10,000 yuan.
AO Smith's wall-hung furnace + radiator scheme display area parity filming
As for the problem of energy consumption between the two, the salesman bluntly said that the power consumption of heating appliances is "definitely relatively large", "it is impossible not to consume electricity", and the nameplates of multiple heating equipment show that most of their power is around 2000-2500W.
However, although the power of heating appliances is not low, the electricity cost required at low temperatures is still saved compared with air conditioning heating; most air conditioners face an environment below zero degrees, and after opening the heating mode, not only the compressor works, but also nearly 1000w of electric auxiliary heating is needed to assist heating.
Gas wall hanging furnaces are different from small and medium-sized heating appliances, and the main energy consumed by their work is natural gas, and the power consumption is negligible compared to heating appliances. In terms of turning on the radiator for 10 hours a day, the gas consumption varies from about 6-9 cubic meters. In the Wuhan area, the price of gas in the first grade is 2.53 yuan / cubic meter, and the price of gas in the second grade is 2.78 yuan / cubic meter, and the additional monthly expenditure on whole house heating is expected to be about 500 yuan.
In addition, the choice of gas wall hanging furnace heating must also consider the cost of after-sales maintenance.
Yang Chao, who chose a wall hanging furnace and radiator combination when buying a house and renovating six years ago, told me that the wall hanging furnace he chose at home, the cost of a single cleaning wall hanging furnace in the official after-sales quotation was about 400-500 yuan, the radiator cleaning cost was more than 150 yuan, and every one to two years needed to be maintained once, and the two maintenance costs were equivalent to the price of the most popular category skirting board heater in the heating appliances.
Compared with the combination of heating appliances and wall-hung furnace radiators, the cost of using small heating items is almost negligible, and the price of e-commerce platforms searching for warm table mats, hot water bottles, and foot warmers is mostly below 200 yuan, and there is no other follow-up cost.
Take the warm table mat as an example, the price is basically within 100 yuan, and the screenshot of the parity pie
Comparing the costs and scope of application of the above heating equipment, it is not difficult to find that they have accurate target consumers, but they also have certain limitations, and a more universal equipment category has not appeared for the time being.
For example, the wall hanging furnace can meet the needs of consumers for whole-house heating, which is becoming the choice of many new house first-time users, but the high purchase and use costs of tens of thousands of yuan are destined to be unacceptable to the public in the short term and become the mainstream of the heating market.
Although the procurement cost of heating appliances is moderate, its coverage is slightly insufficient, and the budget of about 1,000 yuan is relatively friendly to most users who need heating, but when the user's heating needs are shifted from a small area single room to a large area of heating in the whole house. Users can only choose to increase the number of appliances or turn to buy wall-hung furnaces, resulting in secondary expenditures.
Low-cost small heating items, although the lowest cost, but also the smallest range of heating. More is the helpless choice for consumers with low heating requirements or insufficient budgets, this category can not even meet the heating needs of the whole body, and it is also the most replaceable category.
From this point of view, the heating equipment market seems to have sufficient choices for consumers, and there are also significant consumption upgrade trajectories to follow. However, so far, heating equipment that can meet consumer needs in terms of use area, use cost and heating effect has not yet appeared.
However, the purchase of medium and high-priced heating equipment represented by wall-hung furnaces /radiators is accompanied by the demand for new house decoration, and the cost reduction brought about by the maturity of the industrial chain in the future, the future is most likely to be close to the all-round demand of consumers, and in the long run, there may be a certain room for development.
Write at the end
Affected by the use of the time and the climate of different regions, the heating market is actually in a relatively awkward situation at present, due to the general foundation, it is still difficult to grow into a huge market in the short term. At the same time, the competition for different categories of heating equipment is not fierce compared to other fields, but more complementary and meet the needs of different groups.
Since the use time of a single heating appliance is not long, users are generally not willing to spend too much cost. The wall hanging furnace can take into account the demand for hot water and heating demand, and can be applied to the equipment of the four seasons, but it is limited by the housing conditions and the current consumption level, and it is difficult to become the mainstream in the short term, and can only be the main choice of the conditional family when decorating the new house.
For companies in the heating market, it is difficult to support the overall revenue of specially manufactured heating equipment. Heating equipment can only be used as a category more often, and enterprises are more important to develop in an all-round way while seizing the heating market.
With the improvement of consumption level and the trend of consumers paying more and more attention to winter heating, in the long run, the heating market still has a broad space for growth in the future. After all, in the Spring Festival when the snow is abusing and the wind is delicious, the warmth brought by the heating equipment is also a new year's taste.
Resources:
1. "The market size exceeds 50 billion yuan, is the business of heating appliances easy to do?" ,Billion Euro Network;
2. "2021 cold protection consumption trend: heating appliances are hot, down jacket turnover increased by 1 times", Lianshang Network;
3. "Winter Steaming Guide, The Advanced Road of Human Heating Consumption", Consumer New Knowledge Podcast;
4. "With the sudden drop in temperature and the cold winter coming, what is the status of enterprises related to heating equipment?" " , Qicha Data Research Institute;
5. Can the wall hanging furnace market usher in a "warm winter"? , Ovie Cloud Network.
*All characters in this article are pseudonyms.