China's household air conditioning production capacity accounts for more than 90% of the world's total, and has experienced the test of the epidemic and trade war. At the just-concluded first phase of the 135th Canton Fair (April 15-19), mainstream brands such as Gree, Midea, Haier, TCL, and Oaks were all unveiled, focusing on the advanced productivity of China's air conditioning manufacturing.
The Canton Fair is the largest platform and window to display the image of Made in China and China's foreign trade, and the author hopes to make a preliminary judgment on the development trend of China's household air conditioning exports in 2024 through this window, combined with the data and research of Industry Online.
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The pace of household air conditioning "going out" is accelerating, and the leading advantage of emerging markets is obvious This Canton Fair, with the opening of the door of the mainland to the outside world is getting bigger and bigger, the visa policy is optimized and improved, and the recovery of international flights is accelerated, as of March 31, the pre-registered overseas buyers from 215 countries and regions have reached 93,000. In terms of countries, the United States grew by 13.9 percent, the OECD countries by 5.9 percent, the Middle East countries by 61.6 percent, the Belt and Road countries by 69.5 percent, and the RCEP countries by 13.8 percent. It highlights the influence of "going out" of Chinese manufacturing and the promotion of the international influence of emerging markets.
From the perspective of industrial gradient, emerging market countries are in the process of urbanization, industrialization and modernization, and the rapid advancement of residents' consumption upgrading and industrial development has formed a continuous increase in demand for finished household appliances. In the first quarter of 2024, China's household air conditioning exports will be 24.816 million units, a year-on-year increase of 14.3%, compared with the same period in the past five years, the scale has reached a record high.
In addition to the above factors, another important reason for the increase in export orders for air conditioners this year is the warming of global temperatures, and the demand for air conditioners in many regions has changed from optional consumption to rigid demand products, such as Latin America, the Middle East, Southeast Asia and other places The demand is growing significantly. In addition, the front-loading of orders in Europe due to the Red Sea crisis is also a factor in export growth in the short term.
Overall, the pace of air conditioning exports in 2024 is earlier than last year, and some regions still have some room for incremental growth driven by weather and demand.
2019-2024 Household Air Conditioner Export Scale Trend and Sales Performance by Region in the First Quarter (10,000 units)
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According to the industry online survey, due to the rising tide of the air conditioning export market, many traders and small and medium-sized enterprises at home and abroad have also joined it, and many small and medium-sized air conditioning brands have also been seen at the Canton Fair. As a result, there are also some concerns in the industry that as the number of participating companies increases, competition may intensify and further reduce the export price of air conditioners.
Through the comparative analysis of the data from 2020 to 2024, the continuous depreciation of the RMB since 2022 has had a great impact on the average export price of air conditioners, and it has been in the average price decline range since September 2022. The downward cycle has lasted for more than a year and a half, and the monthly average price has fallen by as much as 20-30 US dollars per unit, which has caused greater cost pressure on enterprises. In addition, since the first quarter of 2024. The price of raw materials for air conditioning continues to rise, and the highest point of copper prices in March and April has approached the 80,000 yuan/ton mark. Copper prices account for more than 20% of the production cost of air conditioners, so the export cost pressure of air conditioning companies is further increasing. The idea of grabbing orders through simple price competition is no longer advisable.
In addition, according to experts' predictions, the RMB exchange rate will have room to appreciate in 2024 in the context of the end of the U.S. interest rate hike cycle, which will, to a certain extent, become an opportunity for the export price of air conditioners in the future to increase and improve profits.
2020-2024 comparison of the average export price of household air conditioners with the year-on-year trend of RMB exchange rate and copper price
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The comprehensive strength continues to increase, Chinese enterprises to build overseas brand power from the overall point of view, China's air conditioning export enterprises management efficiency is generally relatively high, the ability to reduce the rate is strong, the product quality is guaranteed, the cost performance advantage is obvious, but the brand power is still relatively insufficient, which has become a bottleneck restricting the development of exports. However, at present, there has been a great change, and the big brands have empowered the development of overseas markets based on their own strength in manufacturing, supply chain and technology research and development in response to the needs of foreign markets. Industry Online hereby summarizes the performance of some brands in the performance of air conditioning products at this Canton Fair.
Gree exhibited cabinet-mounted air conditioner products such as AIRY, SHINO, and ZENO for overseas markets. Taking the AIRY household air conditioner as an example, it breaks through the limitations of the traditional air conditioner in the defrosting process, and realizes the indoor temperature fluctuation below 1.5°C during defrosting, which greatly improves the physical comfort of consumers. At the same time, it is equipped with UVC sterilization and cold plasma system, which can effectively kill air bacteria and purify the air, and the fresh air function realizes full heat two-way air exchange.
In front of an air conditioner specially designed for the Southeast Asian market, the staff can turn on the AI ECO mode with one click through the Haismart APP. According to reports, this innovative model can learn accurate environmental recognition algorithms through cloud AI Study to maximize energy saving on the premise of ensuring the cooling effect. Even in the scorching heat of Southeast Asia, users can turn on the air conditioner without worrying about high electricity bills.
TCL Industry exhibited a variety of products such as the Little Blue Wing P7 fresh air conditioner, which is equipped with a new Little Blue Wing Black Technology Pro, which can achieve the effect of waking up without peculiar smell after turning on the fresh air mode.
Midea household air conditioner, according to Zhang Yunyi, director of the overseas marketing and marketing department, in view of the lack of public power grid capacity in some Middle East and African countries, residents and communities are accustomed to using generators to supplement power supply, Midea air conditioning can still operate safely and smoothly in the case of voltage changes, and at the same time, only need to buy an air conditioner connected to the divergent device, which can meet the refrigeration of the living room and room at the same time, which is more cost-effective; 。
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There is still pressure on growth under the high base, and it is expected that the annual export single-digit growth will be at the Canton Fair, through direct communication with global buyers, air conditioning companies can have a deeper understanding of market demand and trends, and provide an important reference for future product development and market layout. At the same time, the Canton Fair has also brought some new customers and order opportunities for enterprises.
Industry online data shows that the growth rate of household air conditioning exports in March has dropped from double digits in the previous two months to single digits, which is an inevitable phenomenon under a high base. Although it is not possible to fully predict the market outlook from only one month, as the stocking process slows down, the export schedule will gradually fall from May to June, and it is expected that the export schedule will fall back to a single-digit growth in June. In the second half of the year, because of the high base, there is greater growth pressure.
In addition, affected by factors such as the escalation of the situation in the Middle East, the rise in international freight rates, and the persistence of inflation, the basis for the recovery of overseas demand is not stable at present, and the increase is mainly driven by emerging markets and product price advantages. Based on various information, Industry Online expects China's household air conditioning exports to achieve a slight growth of 3.9% in 2024. 2024 Household Air Conditioner Export Production Schedule and Annual Trend Forecast for the First Half of the Year (10,000 units)