China's environmental protection efforts buoy air purifier companies

China's ongoing efforts to improve air quality will not only benefit the air purifier sector, but also weed out less qualified players and provide a solid foundation to companies with genuine technological edge, according to a senior industry executive.

"Everybody can sell air purifiers when you have PM2.5 at 300 outside for two weeks, because it does not need a great company to achieve that," said Frank Hammes, CEO of Swiss air purification provider IQAir.

Hammes said the Chinese government's measures to combat pollution have had tangible effects since 2013. This also coincides with a United Nations report released on March 11 that named China as a global model for air quality management, thanks to the "enormous investment of time, resources and political will".

While such a trend may hamper the company's business growth in the short term, he said it also raises the standard of addressing more subtle sources of pollution that are much harder to tackle, and thus conducive for industry consolidation.

"We always need to adapt to the improving air quality. As customers are getting concerned with their new furniture, paints or floors at home, you realize that there are so many elements affecting air quality and PM2.5 is just one of them," he said.

China currently accounts for a quarter of IQAir's undisclosed overall revenue, with corporate clients and individual customers evenly distributed. This is unique to other markets where consumers account for over 80 percent of the local sales.

Hammes attributed the difference to the fierce talent war that Chinese companies, notably startup firms, are facing as they open at least 10 offices a month around China. IQAir's sales have risen steadily on such aggressive investment in staff.

The trends are also a close reflection of the survey findings by green building solutions provider Johnson Controls last year. It said Chinese organizations have exhibited a higher level of willingness to increase spending on energy efficient projects, a trend that surpasses their global peers and offers big opportunities for related businesses.

"Today the priorities in China are environmental protection and the reduction of pollution in the industrial sector. Chinese entities are generally more willing to pay a premium for the green environment, signaling a vibrant and growing business environment," said Clay Nesler, Johnson Controls' vice-president of global energy and sustainability.

Hammes said companies in China are more proactive to accommodate a generation of "self-improvement" that appreciate health-related benefits.

Air purifier market in China is expected to grow by 18 percent from 2018 till 2021, due to growing consumer awareness about air purifiers, increasing industrialization and growing vehicle emissions, according to a report by consultancy Tech-Sci Research last year.

Online sales now account for 50 percent of IQAir's consumer-end revenue in China with a portfolio of products making a presence on 15 platforms this year. But Hammes predicted such percentage to continue leapfrogging and finally reach a point where almost all the transactions happen online and people visit offline showrooms to get better information about products and services.

(CHINA DAILY)