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The Battle for Better Air Quality - Part 1

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In an earlier opinion I discussed how air pollution can affect sales of air purifiers. The annual cycle of air polluting actions combined with the rising incidence of allergies present sales opportunities for manufacturers. Amidst this backdrop, air purifiers posted a volume sales increase of 22% globally over 2012/2013. Within Asia Pacific in particular, air pollution levels have reached hazardous and even life threatening levels over the past few years. Air quality in China is poor, with the country having been named the world’s largest polluter since 2010. 

Air purifiers’ demand continues to rise as more manufacturers look to jump on the bandwagon, with local Chinese news agency ECNS estimating that nearly 200 manufacturers have entered the domestic market over several years. In other parts of the world, growing concerns about allergies rather than air pollution, for example in the US, are boosting air purifier sales.

Top Five Countries for Air Purifier Volume Sales 2008-2018

Source: Euromonitor International

China sees a Flood of Substandard Products as a Result of Massive Demand

Air purifiers in China achieved a stellar 87% volume gain over 2012/2013, primarily driven by poor air quality (PM2.5 concentrations and smaller) in cities such as Beijing, Shanghai, Nanjing and Shenzhen. Since 1 January 2013, China’s Ministry of Environmental Protection has monitored daily pollution levels in 163 of its major cities. For instance, in Beijing, the PM2.5 concentration reading was 700μg per cubic metre in early 2013, while healthy levels are pegged at 25μg per cubic metre over a 24-hour period, as per World Health Organization standards. With growing awareness of health and pollution levels in China, consumers are purchasing air purifiers for their bedrooms and living rooms, having a particular interest in features such as filters, which can efficiently remove PM2.5, as well as ionizers. Strong demand is expected to continue to be seen in 2014, and within the wider air treatment products market in China, the air purifiers category is anticipated the strongest volume CAGR of 22% over 2013-2018.

With global manufacturers such as Philips and Panasonic leading air purifiers with a combined volume share of 42%, domestic manufacturers are looking to further their presence in the category and grow their share of sales. However, many of these manufacturers are not appliance specialists and have little technological knowledge. As a result, the marketplace is being increasingly flooded with substandard products which do not live up to their claims, with their features not having been officially tested. These also often retail at cheap prices to attract uninformed and price-sensitive consumers. For example, Philips’ air purifiers retail for between RMB5,000-8,000 while the prices of GD Midea and Beijing Yadu range from RMB700-3,000. To combat this problem, the Chinese government is planning to announce a national manufacturing standard for air purifiers at the end of 2014 to protect consumers.

US Concerns Focus on Allergies and Energy Efficiency

In contrast, consumer demand, product perception and marketing tactics are vastly different in the US. Being the second biggest market globally for air purifiers, US consumers look to air purifiers to provide relief from allergies, such as asthma, as well as allergies resulting from seasonal changes, such as a high pollen count. With some 50-60 million Americans suffering from some sort of allergy in 2013 according to the Allergy and Asthma Center, this situation means there exists a considerable consumer base for air purifiers. Manufacturers such as Blueair and Helen of Troy market air purifiers with HEPA filters which help rid the air of harmful pollutants and allergens.

In addition to health worries, energy efficiency is another important purchasing criterion for US consumers given the strong level of environmental concern in the country. Air purifiers must meet standards for Clean Air Delivery Rate (CADR), minimum energy performance and stand-by energy use. To be competitive, manufacturers usually pursue ENERGY STAR-approved labelling to market their products.

What Will Happen Next?

Over the next five years demand for air purifiers will continue to rise as air pollution as a result of ongoing urbanisation is not expected to abate. It will be especially pronounced in Asia Pacific as a result of rapid industrial growth in China and Southeast Asia, with air purifiers in this region set to post the strongest growth rates over 2013-2018.

Manufacturers will invest further, with a focus on technological development and multi-functional products. Category development will also be shaped by national legislation which will be introduced to further regulate manufacturing standards. Other than the leading Japanese and European manufacturers such as Sharp, Panasonic, Daikin, Jarden and Philips, Chinese and Korean manufacturers will be keen to pursue branding initiatives in regions outside Asia Pacific. While consumers’ needs will differ by region, product functionality and quality will still remain key.

In a follow-up piece, I will be discussing possible product movement within air treatment products and prospective markets for air purifiers, such as Eastern Europe and the Middle East and Africa.

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