Xiaomi's air conditioners are gaining traction in China's online market, posing a challenge to the long-standing leader, Gree. Recent data from AVC shows that Xiaomi has climbed to the third-largest market share, holding 11.82%, which is a notable increase of 4.31% from last year. In contrast, Gree's share has dipped to 24.04%, reflecting a decline of 3.01% during the same timeframe.
Xiaomi's Rise in the AC Market
Midea still dominates the field with a 25.01% market share; however, even they are not immune to the changing market landscape. Their average price has decreased by 2.32%, indicating a shift towards more affordable products.
Xiaomi excels in this area, offering air conditioners at an average price of 2,281 yuan ($318), appealing to consumers who are mindful of their budgets. This tactic appears to be effective, as a delivery agent from JD.com reported a remarkable increase in Xiaomi deliveries from 20% to an impressive 70% compared to last year.
Gree Faces Challenges
On the other hand, Gree is experiencing some struggles. Their latest financial report indicates a concerning 15.84% drop in revenue for the third quarter, amounting to 46.939 billion yuan ($6.57 billion). In response, CEO Dong Mingzhu has adopted a rather aggressive marketing strategy.
She recently stated, “Only a fool wouldn’t use Gree air conditioners, which can save you 20%-30% on electricity costs every year.” Since Xiaomi made its market debut in 2021, its shipments have skyrocketed, with 4.4 million units sold in 2023 and a projected 63% growth for early 2024, which could see them reaching over 7 million units by the end of the year. Analysts believe that by 2026, Xiaomi's air conditioner sales may even surpass its own television sales, indicating a shift in focus for Xiaomi's IoT revenue.
The Future of Air Conditioning in China
With Xiaomi’s air conditioners providing an attractive blend of affordability and features, the big question remains: will buyers lean towards this innovative newcomer, or will they continue to support the well-established, albeit struggling, Gree? Only time will reveal the victor in China's air conditioning arena.
In other news, last month, Xiaomi introduced the Mijia Fresh Air Pro air conditioner. This wall-mounted unit features 1.5 HP, rapid cooling in just 30 seconds, heating capabilities down to -35°C, smart integration through HyperOS, AI performance improvements, and a starting price of 3,599 yuan ($506).
