The transition within the real estate sector is not only reshaping developers' business strategies but also posing significant challenges to the growth of supporting service providers along the industrial chain. During the 17th Annual Meeting of the Boao 21st Century Real Estate Forum, Ye Wenqing, Deputy General Manager of Midea Group's Strategic Customer Department and Director of the Central Air Conditioning Real Estate Project, emphasized that for cities with high supply-demand ratios, particularly in fourth-tier cities where inventory backlog is severe, addressing the issue of how to handle existing properties will likely become a critical economic and social concern over the next three years.
Ye Wenqing noted that promoting the destocking of the property market could involve enhancing cost-effectiveness and creating differentiated advantages. As a major player in the real estate support sector, Midea's central air conditioning has consistently been a key business line. He believes that the current trend of hardworking spaces, characterized by its unique advantages and high cost-effectiveness, has become mainstream. Consequently, in the future, real estate developments will increasingly feature fully furnished homes with integrated home appliances.
According to reports, Midea has already positioned itself to capitalize on the trend toward fully furnished housing, offering comprehensive solutions for air conditioning, hot water, heating, fresh air, lighting, and kitchen appliances.
The ongoing adjustments in the property market, initiated last September, have undergone multiple rounds of policy interventions. Currently, the primary cities show signs of cooling in the real estate market.
Therefore, Ye Wenqing informed reporters that "the current adjustments in the real estate market present both challenges and opportunities for the industry as a whole, including the central air conditioning sector. Firstly, the intensified market competition will raise demands for product and service quality while necessitating stricter cost controls. Secondly, to overcome these challenges, businesses must enhance their competitiveness through technological, quality, or service upgrades, thereby driving rapid industry growth."
Midea’s U.S. central air conditioning division is focusing on strengthening its risk resistance capabilities through advancements in technology, efficiency, and cost management. Specifically, Midea has been actively promoting innovation in refrigeration and energy-saving technologies. In 2016, Midea invested 4% of its annual sales revenue in R&D for central air conditioners, compared to 3% across the entire home appliance industry. Ye Wenqing emphasized that Midea will continue to increase its R&D investment, aiming to reach 5% of annual sales by 2017.
“Many of our current products are now internationally leading in terms of energy efficiency, and we can use intelligent control systems to design environmental solutions tailored to various building types,†Ye Wenqing told the 21st Century Business Herald. Midea’s Central Air Conditioning Division has long been committed to smart solutions, with the Group establishing a Smart Home Division to integrate all its products into a unified smart home ecosystem.â€
In addition, Midea has collaborated with large housing companies like Vanke and Country Garden on smart home initiatives, integrating original smart home networks into their housing development projects.
In terms of efficiency, Midea’s central air conditioning has three production bases in Shunde, Chongqing, and Hefei, with a total production capacity of 20 billion. Large-scale production undoubtedly reduces the cost per unit. Furthermore, Midea’s central air conditioning plants are highly automated, with a human-to-machine ratio reaching 40%.
Regarding cost research, Midea employs a centralized supporting model to achieve direct supply from manufacturers to developers, eliminating the cumbersome processes of repeated consultations, bidding, and coordination with multiple suppliers or contractors for different projects, thus reducing intermediary costs.
Moreover, Midea’s longstanding “bulk purchase†model has significantly reduced procurement costs for developers. This model involves signing large-scale purchase agreements with real estate developers, allowing them to order from Midea’s 36 branches nationwide at any time. These branches are strategically positioned to offer prompt supply and service.
Ye Wenqing explained to reporters that the “bulk purchase†model offers several benefits: First, it ensures the most favorable pricing; second, it simplifies the procurement process for developers and reduces management costs; third, it streamlines the procurement process, ensuring faster factory supply and saving installation time. Fourth, it provides nationwide pre-sales, sales, and after-sales services.
Reports indicate that Midea’s central air conditioning has 36 branches, over 3,500 dealers, and more than 3,000 service providers nationwide.
Midea’s central air conditioning research found that product, technology, cost, and service are the four key factors directly impacting real estate sales and profits. This aligns with the priorities of real estate developers.
According to Ye Wenqing, in terms of product categories, Midea’s central air conditioning can provide customized solutions for small apartments, villas, and even large shopping malls and hotels. For the characteristic towns being actively developed by real estate companies, Midea can also offer corresponding product matches.
Industry monitoring data shows that in 2016, Midea’s central air conditioning annual sales reached 13.71 billion yuan, with a market share of 18.52%, 2.5 percentage points ahead of the second-place competitor, maintaining its top position in the industry for four consecutive years.
Ye Wenqing told reporters that sales in the first half of this year reached 9.6 billion yuan, a year-over-year increase of 29%, with an annual target of over 30% growth.
Regarding the sales channel, Ye Wenqing mentioned that the company’s online and offline layouts are comprehensive, with both channels complementing each other effectively. Currently, there are specialty stores in county-level towns, with over 4,000 specialty stores nationwide for central air conditioning, driving substantial growth this year.
[Extended Reading]
Home central air conditioning down-penetration file upgrades multi-party force
Gaming Laptop Used,Lenovo Legion Second Hand,Used Lenovo Legion,Lenovo Legion 5 Second Hand
Guangzhou Panda Electronic Technology Co., LTD , https://www.panda-3c.com