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In 2022, against the background of insufficient demand caused by poor external environment, the global and Chinese air conditioning market will move forward resiliently. According to the "Annual Summary Report on the 2022 Global Household Air Conditioning Market" released recently by AVC, the global household air conditioning market sales in 2022 reached 164 million units, a year-on-year decrease of 3.6%. In 2022, the scale of the global and Chinese air conditioning market was basically stable, the quality of enterprise operations was significantly improved, and the industry development was transitioning from scale driven to high-quality development.

Looking forward to 2023, a strong recovery in the domestic market is worth looking forward to. Ovi Cloud estimated that the domestic sales shipment in 2023 is expected to be 83.22 million units, an increase of 3.7% year-on-year. The scale of omnichannel retail sales is expected to be 58.97 million units, with a year-on-year growth of 3.2%. The scale of retail sales is expected to be 205.7 billion yuan, with a year-on-year growth of 4.5%.

Cyclical decline in the scale of international trade export markets

From 2020 to 2021, China's household air conditioning industry achieved stable growth driven by the international trade export market. In 2022, under the influence of many uncertain factors in the international trade market, consumer demand for household air conditioners was constrained, and with the background of a high base over the same period, the pulling effect of the export market on the industry was weakened, with a cyclical decline in scale. According to AVC data, the export volume of domestic air conditioners in China in 2022 was 61.20 million units, a year-on-year decrease of 8.3%.

In 2022, against the background of rising average prices and structural improvement, China's international trade in household air conditioners increased year-on-year, achieving quality improvement. Due to high costs and significant improvements in the product mix in the Asian, North American, and European markets, the average price of air conditioning export products has been raised. According to data, in 2022, China's export of household air conditioners reached US $12.99 billion, an increase of 4.2% year-on-year.

From a regional perspective, in 2022, the African market achieved counter trend growth under low permeability, large population, and high temperature climate conditions. The export volume was 3.81 million units, with a year-on-year increase of 10.9%. The scale of international trade exports was 720 million US dollars, with a year-on-year increase of 11.7%.

In 2022, the export volume of the European market decreased by 5.9% year-on-year, but the scale of export volume increased by 12.4% year-on-year, with significant quality improvement. In the long run, the European market has great potential. According to the analysis of the large household appliance business department of Ovi Cloud, due to factors such as short duration of high temperature weather, high installation costs, and complex processes, the penetration rate of air conditioning products in Europe was extremely low, only about 6%. In the past two years, stimulated by the rising local air temperature and accumulated consumer education, European residents' perceptions and habits of air conditioning consumption have finally changed. In the long run, the potential of the European market cannot be underestimated.

Repair of product prices in the domestic market

The development of the domestic air conditioning market in 2022 has experienced ups and downs. In the first half of the year, affected by factors such as weak real estate sales and repeated epidemics in some regions, residents' demand and willingness to consume household appliances were significantly insufficient. The air conditioning market was once very pessimistic due to continuous rain in core regions such as South China, which severely hindered demand release; After entering the second half of the year, with the continuous high temperature in July and August, a wave of consumer demand was released, and policy incentives such as "promoting consumption", "supporting green household appliances to go to the countryside, and replacing old ones with new ones" were superimposed around the country. The scale of the air conditioning market significantly increased.

Overall, compared to the continuous downward trend in sales in the overall home appliance industry, the domestic air conditioning market has shown strong market resilience. According to data, in 2022, the omnichannel retail volume was 57.14 million units, a year-on-year decrease of 3.3%, including 30.47 million units online, a year-on-year increase of 1.0%, and 26.66 million units offline, a year-on-year decrease of 7.7%; Omni-channel retail sales amounted to 196.9 billion yuan, a slight increase of 0.4% year-on-year, including 92.6 billion yuan online, a year-on-year increase of 4.4%, and 104.3 billion yuan offline, a year-on-year decrease of 2.8%.

Under cost pressure, enterprises focus on price increases and structural improvements to achieve price recovery. Throughout the first half of 2022, the cost of raw materials has been at a high level, and the pressure on enterprises is enormous. Therefore, even in the face of sluggish market demand, they still have no choice but to raise prices. According to the monitoring data of AVC, the average online and offline price growth of air conditioning retail market in February exceeded 15%. On the other hand, enterprises also strive to achieve structural improvement through product upgrading and innovation: the penetration rate of 2-horse hanging machines, fresh air air conditioners, intelligent voice air conditioners, etc. has significantly increased, and the proportion of high-end hanging machines has increased significantly.

Domestic Market Will Meet Deterministic Growth

The Large Appliance Business Department of Ovi Cloud Network predicts that after three years of continuous decline, the domestic market size of air conditioners will experience a certain growth in 2023.

First of all, with the strengthening of national macroeconomic regulation, the real estate industry continues to release good news. Air conditioning is highly correlated with the real estate market, and the rate of new demand in the sector will probably increase steadily in 2023, when the real estate market recovers.

Secondly, driven by low inventory and high expectations, channel replenishment has sufficient momentum. After experiencing the dual impact of high costs and sluggish demand, air conditioning inventory in 2022 was at the lowest level in 10 years. After experiencing structural shortages in July and August 2022, the logic of enterprise safety inventory is being reconstructed. In addition, as the single product with the strongest profitability, air conditioners have sufficient power to replenish goods through channels in the face of favorable market conditions.

In addition, major enterprises have full confidence in the future market. Since February of this year, product promotions in the main forms of Midea Air Conditioner Fire March, Haier Health Air Conditioner Festival, Gree Electric Spring Thunder Action, Oxfam Air Conditioner Olympic Powder Festival, and Hisense Air Conditioner Opening Ceremony have been launched in advance; Product launches with selling points such as functional integration, comfortable new style, and intelligent voice have followed; Scenarios represented by home products and kitchen air conditioners continue to break through. This series of actions have demonstrated the market confidence and ambition of the enterprise to make achievements in 2023.