Home appliance makers take the online route for growth

Online sales have helped Chinese home appliance makers, especially air conditioner manufacturers achieve sustained business growth amid an industrial slowdown last year, according to a new industry report.

The report published by AVC, a consultancy that specializes in data on home appliances, said online sales of household air conditioners increased 85 percent year-on-year to 9.8 billion yuan ($1.57 billion) in 2014.

Meanwhile, domestic manufacturers sold more than 3.6 million units of household air conditioners via e-commerce platforms, up 93 percent from 2013, according to the report.

Online sales helped improve over all air-conditioner sales by about 4 percent age points, said Liu Hucheng, are searcher with AVC.

"The booming e-commerce market has helped create a new growth engine for makers of air conditioners, given that the offline market demand remained stagnant last year," said Liu.

Sales growth of air conditioners, through both online and offline channels, declined from 6.8 percent in 2013 to 5.2 percent last year, indicating weak prospects for the growth of the market this year also, he said.

To off set the slowdown, companies like Gree, Midea and Chigo have chalked out plans to boost sales through online platforms.

Gree Electric Appliances Inc launched a self-developed online shopping mall last year, while the Guangdong-based home appliance maker Midea Group has signed strategic agreements with e-commerce providers like JD.com and Suning to expand online sales.

Gree has also teamed up with e-commerce giant Alibaba to develop an online-to-offline sales model, with online services expected to cover more than 20,000 of the company's flag ship stores.

Online sales of Midea's products increased 160 percent year-on-year to nearly 4 billion yuan in the first half of2014, according to company sources.

"With more industrial players becoming actively engaged in e-commerce, the image and after sales services for air conditioners will be highly promoted in the near future," Liu said.

AVC expects online sales of air conditioners to increase 90 percent year-on-year to18.5billion yuan in 2015, with more than 6.65 million units to be sold.

Qiu Quanlin