Market growth performance often serves as a crucial indicator for assessing the rise and fall of an industry. During the winter heating season in 2017, the air purification market, which should have been at its peak, appeared much more deserted than in previous years. When did the "empty net" industry reach its lowest point? In 2016, the winter was still in full swing, and the once-busy online market for air purifiers became nearly invisible. What awaits the air purification industry now? These questions are not unique to this sector; they reflect broader challenges across many industries.
**Air pollution management has a long way to go**
In 2017, air quality improved significantly, and the smog that was expected during the heating season finally failed to materialize. Frequent northwest winds and strong government action contributed to the better air quality that year. However, it is clear that tackling air pollution is a long-term process, and the improvements seen in 2017 were just the first step.
2017 marked the final year of the Air Pollution Prevention Action Plan. According to the plan, by 2017, the concentration of inhalable particulate matter in cities at or above the prefecture level should have dropped by over 10% compared to 2012. The number of days with good air quality should have increased year by year. In regions like Beijing-Tianjin-Hebei, Yangtze River Delta, and Pearl River Delta, PM2.5 concentrations were expected to decrease by 25%, 20%, and 15%, respectively. Beijing’s annual average PM2.5 concentration was targeted at around 60μg/m³.
When performance is tied to air quality metrics, governments at all levels are increasingly focused on environmental improvement. After five years of effort, 2017 saw the first signs of progress. For example, Beijing's annual average PM2.5 concentration reached 58μg/m³, meeting the government’s 2013 target. Across other regions, similar efforts were made, including coal-to-gas and coal-to-electricity projects, restrictions on high-energy industries, and vehicle controls during extreme weather.
However, it should be noted that improving air quality is not something that can be achieved overnight. Purifying local air is easier than cleaning the entire ecosystem. Take London, for instance. A major photochemical pollution incident occurred in 1952, but it wasn't until 1974 that the city introduced the Air Pollution Control Act. Even the Environmental Law passed in 1995 still aimed to combat “smog.†China will face a similar long journey in controlling air pollution.
Moreover, keeping PM2.5 levels around 60μg/m³ is not the ultimate goal. The real danger lies in the fact that PM2.5 can enter the respiratory system and cause irreversible damage. Even if the sky looks clear, PM2.5 can slowly harm the body. The U.S. standard for clean air sets a PM2.5 limit below 12μg/m³, while 60μg/m³ represents a moderate level of contamination. As industrialization progresses, achieving cleaner air will become increasingly challenging.
It’s also worth noting that the root cause of air pollution lies in the energy structure. While coal-to-gas and coal-to-electricity projects have helped improve the blue sky, they have also created issues like gas shortages and heating problems. Energy restructuring cannot be done overnight. Although shifting to clean energy is understandable, China’s large population and existing energy mix require careful planning. Some areas have even paused coal-to-gas projects due to supply issues, highlighting the need for balance between economic development and environmental protection.
**Staged decline, difficult to upgrade the situation**
With the arrival of the 2017 heating season, practitioners in the air purifier industry began to feel the market slowdown. In 2016, frequent smog led to a surge in demand for air purifiers. But in 2017, with less smog, the market seemed to lose momentum. According to Zhongyikang data, retail volume in the last four weeks of 2017 fell sharply by up to 80% year-on-year, raising concerns among industry players.
Does the air purifier industry rely solely on smog to drive sales? Obviously not. Smog is just one cause of indoor air pollution. Other factors like benzene, formaldehyde, bacteria, and viruses also pose health risks. While smog may directly influence consumer purchasing behavior, the growing demand for a healthier lifestyle ensures that clean air will remain a fundamental need.
China has become the world’s second-largest economy, and the middle-class population continues to grow. With about 300 million middle-income individuals today, this number is expected to double within the next decade. During the "Thirteenth Five-Year Plan," China aims to build a moderately prosperous society, raising per capita income to a high-income level. By 2020, per capita GDP is expected to exceed $13,000, and urban residents’ Engel coefficient will drop to around 30%. As living standards rise, so will the demand for clean air, water, and a better environment.
Although the air purifier market showed a decline at the end of 2017, the overall growth remained strong throughout the year. From January to November 2017, retail volume and sales increased by 11% and 20.5%, respectively. The seasonal dip did not change the public’s fundamental need for clean air.
The decline in 2017 was steeper than in 2016. In November 2016, severe smog hit northern China, leading to panic buying. In contrast, November 2017 saw 80% of days with excellent air quality, and PM2.5 levels dropped by 54% year-on-year. These improvements did not hinder the air purifier market’s development.
Lastly, the penetration rate of air purifiers in China remains low compared to developed countries. In the U.S., the penetration rate is already between 20% and 30%. Peng Yi, deputy general manager of Zhongyikang, stated that the Chinese air purifier market is still in its early stages, with significant growth potential. Zhongyikang forecasts a 20% year-on-year increase in the market size in 2018.
Electronic Shelf Label
Electronic shelf labels (ESLs) are digital displays that are used in retail stores to replace traditional paper labels on shelves. These labels are capable of displaying product information such as prices, promotions, and other relevant details in real-time. ESLs are becoming increasingly popular in retail stores due to their many benefits, including increased efficiency, accuracy, and cost savings.
One of the key benefits of ESLs is their ability to improve efficiency in retail stores. With traditional paper labels, employees must manually change prices and other information on each label, which can be time-consuming and prone to errors. ESLs, on the other hand, can be updated remotely and in real-time, saving employees time and reducing the risk of errors. This allows employees to focus on other tasks, such as customer service, which can improve the overall shopping experience for customers.
Another benefit of ESLs is their ability to improve accuracy in pricing and inventory management. With traditional paper labels, pricing errors can occur, leading to customer dissatisfaction and lost sales. ESLs, however, can be programmed to update prices automatically and accurately, reducing the risk of pricing errors. Additionally, ESLs can be integrated with inventory management systems, allowing retailers to track inventory levels and make informed decisions about restocking products.
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