A few years back, during an event on CCTV, Gree's Chairman Dong Mingzhu and Lei Jun, the founder of my company, had a public bet that caught everyone's attention. Since then, Dong Mingzhu has consistently outperformed Lei Jun in various fields, even venturing into the smartphone market. He has already released two generations of smartphones. Lei Jun, however, hasn't been one to back down. The latest buzz is that Xiaomi is planning to enter the air conditioning industry!
According to domestic media reports, a product called the "Mijia Full Inverter Air Conditioner" recently popped up on the national 3C quality certification list, with Changhong Electric listed as the manufacturer.
Our reporters learned from stakeholders at Sichuan Changhong that "some models of Xiaomi air conditioners are indeed being produced by Changhong." Xiaomi insiders have also stated: "There may be more models of Xiaomi air conditioning products available in the future."
It seems that Xiaomi's Mi Ecosystem is aiming to cover the entire home appliance manufacturing sector. Starting with small household appliances, the Mi ecosystem spans from bedrooms to kitchens to living rooms. As early as 2015, Xiaomi attempted to enter the air conditioning industry by collaborating with United States to launch the "iYouth Smart Air Conditioner," but the response was lackluster.
Regarding Xiaomi's entry into the air conditioning market, insiders from Gree expressed that they welcomed competition but believed it wouldn't be easy for newcomers to succeed.
In recent years, the air conditioning industry has seen a general decline. Statistics from relevant agencies show that China's air conditioning market retail sales dropped by 4.8% in 2015 compared to the previous year. Although there was some recovery in 2016, the overall growth rate remained stagnant. This situation is similar to the current state of the smartphone market. Gree and United States dominate nearly 70% of the market share, making it quite challenging for Xiaomi to make a significant impact in this field.
Xiaomi producing air conditioners is akin to Gree venturing into smartphones—there will undoubtedly be skepticism. From the layout of Xiaomi's ecosystem, the Mijia full inverter air conditioner is sure to be priced competitively, just like its sweeping robots and laser TVs.
To many manufacturers, Xiaomi has become the disruptor of the market. However, in the manufacturing-heavy, cost-controlled air conditioning industry, relying solely on contract manufacturers like Changhong is far too challenging.
On the other hand, Xiaomi's strength lies in its software capabilities and its ability to connect the entire home. Using smartphones as the hub, Xiaomi aims to create a closed-loop smart home ecosystem. However, air conditioners are bulky appliances in traditional home appliances. Even with support from Changhong, Xiaomi lacks certain core technologies. For instance, the compressor cores of air conditioners are where Gree and United States hold their technical advantages. Xiaomi, on the other hand, remains relatively unknown in this aspect. Additionally, Xiaomi will need to invest more resources in installation processes, and future after-sales services will pose a significant challenge.
Air conditioners are not like smartphones—they differ greatly in lifecycle and after-sales service. For traditional household appliances, consumers tend to trust established brands like Gree and Midea, not only for quality assurance but also for maintenance and installation services. Traditional companies excel in these basics and intelligence, while smart homes remain largely conceptual with more gimmicks than practical applications.
As we continue to explore new markets, Xiaomi remains committed to innovation and affordability, hoping to carve out a niche in the competitive air conditioning industry.
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