In the 2016 Cold Year of Air Conditioning, with the completion of the "Heavenly Beauty" policy and the active clearance of inventory by air conditioning giants, it finally ended beautifully. According to data released by the National Information Center, the offline sales volume and sales revenue of air conditioners reached 31.25 million units and 106.3 billion yuan respectively this year, an increase of 4.36% and 2.47% year-on-year. The haze of the double decline in sales volume in 2015 has finally dissipated.

Now, the new cold year of air conditioning in 2017 has begun. The feedback from manufacturers is that the payment situation of channel merchants is good. In previous years, air conditioning companies were eager to sell to distributors at this time, but now they are eager to replenish their inventory. This indicates that after successfully clearing inventory, the air conditioning industry has officially entered the fast lane of healthy development with light equipment.

Highlight 1

The sales volume of air conditioning has increased simultaneously

Cold Year Ends

Recently, Gree, Midea, and Zhigao air conditioning giants all stated in an interview with reporters that this year's weather is perfect, coupled with the upgrading of air conditioning structures and significant destocking effects, "2016 Cold Year can be considered the end."

In May of this year, the air conditioning industry was still shrouded in a pessimistic sentiment. But with the occurrence of high temperatures throughout the country in June, and entering mid July, it has even entered a "barbecue" mode, which is beneficial for the air conditioning industry that relies on weather for survival. The data shows that the sales volume of air conditioners in Northeast, East, South, Central, Northwest, and Southwest regions has all increased year-on-year; The sales volume of the primary and secondary markets, as well as the third and fourth markets, increased year-on-year, with the third and fourth markets showing more significant growth at 9.53% and 19.27%, respectively. The high temperature weather further stimulated the volume expansion of the third and fourth markets.

It is understood that the sales of air conditioners in June and July this year reached 5.28 million and 5.82 million respectively, with the combined sales of the two months accounting for almost one-third of the annual sales. Prior to this, from August last year to May this year, the overall sales data of air conditioners declined. It can be said that the "comeback" of sales in June and July was the key point for achieving growth in air conditioner sales.

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Intelligent air conditioning has become a highlight

Increase in mid to high end market share

In the cold year of 2016, major mainstream air conditioning brands also increased their layout of e-commerce channels. According to data provided by Zhongyikang, the sales volume of online air conditioners in 2016 reached 8.5 million units, with a sales revenue of 20.9 billion yuan, an increase of 85.2% and 85.4% year-on-year, respectively. Among them, online sales and sales of air conditioning brands such as Gree, Midea, Haier, Zhigao, and Hisense have all shown significant year-on-year growth.

In addition, many manufacturers have implemented a strategy of upgrading their product structure and expanding the market share of mid to high end models. The high-end air conditioning products launched by enterprises have greatly improved and highlighted in many aspects such as functionality, energy efficiency, and design. Especially for air conditioning products priced above 6000 yuan, the market share has increased from 10.46% in 2015 to 15.45% this year.

Among them, intelligent air conditioning is a major highlight. Data shows that in the cold year of 2016, both the sales volume and sales volume of smart air conditioners achieved growth, with market share reaching 15.16% and 17.02%, respectively. It is expected that under the guidance of mainstream air conditioning companies such as Midea, Gree, and Zhigao, the domestic intelligent air conditioning market will gradually heat up, and the sales proportion of the overall air conditioning market will accelerate. Cai Ying, Deputy Director of the Information Resources Department of the National Information Center, believes that intelligent air conditioning has become another new growth point in the domestic air conditioning industry after variable frequency air conditioning, and has begun to fundamentally change the traditional manufacturing mode of household appliances.

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Air conditioning giants proactively reduce production

Significant effect in reducing inventory

For the air conditioning industry, another major victory is that the inventory pressure that put a lot of pressure on air conditioning manufacturers during the 2015 cold year finally dissipated in the 2016 cold year.

The reporter learned that in the 2016 cold year, almost all air conditioning giants adopted a reasonable inventory clearance strategy. Even Gree, which sparked an industry price war due to carrying huge inventory in the previous cold year, has still adopted the "shock therapy" of destocking this year. At an investor exchange meeting in April this year, the Chairman of Midea Group stated that they would rather have a decline in revenue than resolutely clear inventory, suppress factory shipments, and transition to the T+3 model of production based on sales. In fact, an important means for these giants to reduce inventory is to proactively reduce production during the peak production season of the 2016 cold year.

According to a sales manager of an air conditioning company, it is important for channel partners to keep up with the manufacturer's policies and pace in the entire sales work this year, actively carry out promotions, and help channels digest inventory. "Channel partners who actively follow the manufacturer's policies have had good inventory digestion this year," he said.

According to the monitoring of channel inventory by Industry Online, as of the end of July 2016, the channel inventory of the air conditioning industry was below 27 million units, with nearly 37 million units in inventory during the same period, a year-on-year decrease of more than 20%.

Highlight 4

Working overtime in the store to sell air conditioning

Too many orders, manufacturer abandons vacation

Successfully clearing inventory enabled air conditioning companies to "light up" in the new cold year of 2017. According to interviews with air conditioning giants such as Gree, Midea, Zhigao, and Hisense Kelon, it was found that in the 2017 New Cold Year, compared to previous years of difficult pressure on channel suppliers, air conditioning companies were more eager to replenish their positions, and the channel payment situation was also quite good. "The store was supposed to end the cold year in July and take a vacation in early August, but ended up working overtime to sell air conditioners. The manufacturer, who was supposed to have a vacation in late August, continued to hold on to their production position due to high order volume," said a senior executive of an air conditioner manufacturer.

An insider from Zhigao Air Conditioning also stated that the company has a large production capacity and employees are rushing to produce orders. Zhigao Air Conditioning opened early in July this year, and the opening effect has been better in recent years, whether through channel replenishment or payment. TCL air conditioning related personnel also stated that there is no inventory burden this year, boldly stocking up, and the sales situation is clear. The opening meetings of various regions, which were supposed to start in July, have also been postponed due to the hot weather.