China’s Water Heater Market in Boom
By AWHE 2016 Organizing Committee
Huge water heater market demand in 2015 and 2016
Related statistics show that In 2015 China's water heater market (only including electric water heater and gas water heater) sold 35.32 million water heaters of 5.44 billion RMB, with year-on-year growth of 4.4% and 7.1%. Under the circumstances of slow growth sales of household electrical appliances, the water heater market still maintained a relatively significant growth.
In the first quarter of 2016, water heater market sales achieved unexpected results for the cold weather swept throughout China. The water heater market retail volume reached 848 million units with an increase of 9.3%. Its retail sales amounted to 12.6 billion RMB with an increase of 8.9%, which indicates that the water heater market consumption space is still increasing and water heater industry is on the rising stage. It’s estimated that the turnover of water heater market will reach 56.7 billion RMB with an increase of 4.2%. The real estate market plays an important role in boosting household consumption. As China’s governments accelerate the pace of real estate inventory and the shanty towns and rural project for the renovation of dilapidated buildings smoothly, the water heater industry still has an obvious increasing trend.
The booming online market of water heater
Online retailers also plays an important role in water heater industry sales channels. According to related data, in 2015, the number of heaters online sales reached 6.3 million, with year-on-year growth of 59.9%. retail sales of 6.6 billion RMB with an increase of 51.9%. Water heater sales in online market will maintain growth. On the one hand it’s because product structure online is constantly upgrading. On the other hand, the online retailers shift the channel to the third and fourth market and even rural market, which consequently bring many business opportunities and huge market demand to the water heater industry.
Upgrading water heater to comply with health and comfort
With consumers’ rising concern about healthy bath experience, health is rapidly becoming a new selling point of the water heater market. Currently there are more than 10 kinds of health electric storage water heaters in the market. Gas water heater leading enterprises also add health functions in their new products. For example, Haier has launched electric water heaters exempt from inner tank cleaning and set up three sterilization modules in the outlet, which enables water heater inner tank to maintain in a clean and flow state. Midea has launched new water heaters with the function of automatically removing stagnant water. A.O Smith has launched electric water heaters equipped with self cleaning function. Rinnai even launches gas water heater with spa beauty health function. The development direction of the water heater products is clear, which indicates that health and comfort will be the next key point in the industry.
In terms of water heater industry, in addition to the real estate market and the opportunity brought by product structure upgrading, there is huge development space concerning channel transformation. In the first quarter of this year, the fourth water heater market is higher than the overall level of first and second market. Furthermore, with changes of China’s energy consumption structure, China is accelerating the gas pipeline network construction and actively promoting the transformation from coal to gas project implementation. It’s expected that gas water heaters in the third and fourth market will usher in rapid development.