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In 2022, against the backdrop of insufficient demand caused by poor external environment, the global and Chinese air conditioning markets will move forward with resilience. According to the "2022 Global Household Air Conditioning Market Annual Summary Report" released by AVC recently, the global household air conditioning market sold 164 million units in 2022, a year-on-year decrease of 3.6%. In 2022, the scale of the global and Chinese air conditioning market remained basically stable, and the quality of enterprise operations significantly improved. The industry's development transitioned from scale driven to high-quality development.

Looking ahead to 2023, a strong recovery in the domestic market is worth looking forward to. Ovi Cloud Network predicts that the domestic market's domestic sales shipment is expected to be 83.22 million units in 2023, a year-on-year increase of 3.7%. The scale of omnichannel retail sales is expected to reach 58.97 million units, a year-on-year increase of 3.2%, and the retail sales volume is expected to reach 205.7 billion yuan, a year-on-year increase of 4.5%.

Periodic 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 numerous uncertain factors in the international trade market, the demand for household air conditioning consumption was suppressed. Coupled with the high base background of the same period, the driving effect of the export market on the industry weakened, and the scale experienced a cyclical decline. According to AVC data, the export volume of household air conditioners in China in 2022 was 61.20 million units, a year-on-year decrease of 8.3%.

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

From a regional perspective, the African market will achieve counter trend growth in 2022 due to low penetration rate, large population, and hot climate conditions. The export volume was 3.81 million units, a year-on-year increase of 10.9%, and the scale of international trade exports was 720 million US dollars, 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 export scale increased by 12.4% year-on-year, and the quality improvement was significant. In the long run, the European market has enormous potential. According to the analysis of Ovi Cloud Network's large home appliance business unit, due to factors such as short duration of high temperature weather, high installation costs, and complex processes, the popularity rate of air conditioning products in Europe was extremely low, only about 6%. In the past two years, stimulated by the rise in local air temperature and accumulated consumer education, European residents' understanding 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, due to factors such as weak real estate sales and recurrent epidemics in some areas, residents' demand and willingness to consume household appliances were significantly insufficient. The air conditioning market was once very pessimistic due to the severe obstruction of demand release caused by continuous rain in core areas such as South China; After entering the second half of the year, with the continuous high temperatures in July and August releasing a wave of consumer demand, coupled with policy incentives such as "promoting consumption" and "supporting green household appliances to go to the countryside and exchanging old for new" in various regions, the scale of the air conditioning market has 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, the omnichannel retail volume in 2022 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%; The retail sales through all channels reached 196.9 billion yuan, a slight increase of 0.4% year-on-year, of which 92.6 billion yuan was online, a year-on-year increase of 4.4%, and 104.3 billion yuan was 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 remained high, and the pressure on enterprises was immense. Therefore, even in the face of sluggish market demand, they still had no choice but to raise prices. According to monitoring data from AVC, the average increase in online and offline prices of air conditioning retail markets in February exceeded 15%. On the other hand, enterprises are also focusing on improving their structure through product upgrades 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 welcome deterministic growth

The Auwei Cloud Network Home Appliances Business Unit predicts that after three years of continuous decline, the domestic air conditioning market size will experience a certain growth in 2023.

Firstly, with the increasing efforts of national macroeconomic regulation, the real estate industry continues to release positive news. Air conditioning is highly correlated with the real estate market, and the new demand sector is expected to steadily grow in 2023 during the recovery of the real estate market.

Secondly, driven by low inventory and high expectations, there is sufficient motivation for channel replenishment. After experiencing a dual blow of high costs and sluggish demand, air conditioning inventory in 2022 is at its lowest level in 10 years. After experiencing structural shortages in July and August 2022, the logic of enterprise safety inventory is being restructured. In addition, as the most profitable single product, air conditioning has ample power to replenish through channels in the current favorable market situation.

In addition, major enterprises have full confidence in the future market. Since February this year, product promotions mainly in the form of Midea Air Conditioning Hot March, Haier Health Air Conditioning Festival, Gree Electric Spring Thunder Action, as well as the Ox Air Conditioning Aufan Festival and Hisense Air Conditioning Open Door Lucky have been launched in advance; Product releases with selling points such as functional integration, comfortable new style, and intelligent voice have followed one after another; Scenarios represented by home products and kitchen air conditioners continue to break through. This series of actions demonstrate the company's market confidence and ambition to achieve performance in 2023.