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Following the news from OFweek Smart Home Network, Xiaomi has once again ventured into the air conditioning market, much like their previous attempt with Gree's mobile phones. Recently, a product known as the "Mijia Full Inverter Air Conditioner" showed up on the national 3C quality certification list. Both the applicant and manufacturer are listed as Sichuan Changhong Air Conditioning Co., Ltd., while the actual manufacturer is Beijing Zhimi Electronic Technology Co., Ltd., a subsidiary of Xiaomi.
This marks Xiaomi's second attempt at air conditioning, and this time around, they seem to be taking a different approach. Unlike two years ago when the specifications were vague, this time, it appears to be a key product in Xiaomi's lineup.
Xiaomi is not aiming to disrupt the air conditioning industry by sheer volume. Instead, their focus is on integrating smart air conditioning into their broader vision of a smart home ecosystem. Their first foray into the air conditioning sector, alongside Gree, resulted in the "i Youth Smart Air Conditioner," marketed as the "first air conditioner for young people." It offered features like one-step connectivity and voice commands, even integrating with the Mi Band to automatically turn on upon arriving home and switch to sleep mode after falling asleep. However, despite its innovative features, the product did not make waves in the market.
In the three years since Xiaomi's partnership with Gree, there hasn't been much synergy in their joint ventures. Meanwhile, Xiaomi has continued expanding its smart home offerings with products like air purifiers, rice cookers, laser TVs, and even electric scooters under the Mijia brand. These moves have directly impacted established players in the smart home space.
Insiders suggest that these conflicting interests were a driving force behind Xiaomi's decision to part ways with Gree. Despite the initial failure, Xiaomi remained determined to enter the air conditioning market. Last year, they sought expertise from professionals in the air conditioning industry and prepared to re-enter the market with a renewed focus.
Xiaomi shifted its attention to Changhong, a company rapidly advancing in smart home and AI technologies. By partnering with Changhong, Xiaomi aimed to leverage their technical expertise and ensure the quality of their air conditioning products.
For Xiaomi, which operates on a light-asset model, Changhong's strengths in air conditioning technology and manufacturing were invaluable. Changhong's commitment to innovation aligned well with Xiaomi's vision.
Critics have been skeptical of Xiaomi's ability to compete in the air conditioning market, especially against giants like Gree and Midea, which hold nearly 70% of the market share. Industry experts argue that without their own production facilities or R&D, Xiaomi's room for growth would be limited. Additionally, crucial aspects like after-sales service and installation pose significant challenges that Xiaomi would struggle to address quickly.
However, insiders from major air conditioning brands remain unfazed. Gree insiders expressed a welcoming attitude toward competition but emphasized the difficulty of succeeding in this industry. Similarly, Midea showed little concern over Xiaomi's entry.
Lu Jiebo, Deputy Secretary-General of the China Electronic Chamber of Commerce, believes that while Xiaomi might initially gain traction, competing directly with Gree and Midea is unnecessary. "Their scale and current sales volumes are incomparable," he stated.
On the flip side, some believe Xiaomi could act as a "catfish" in the stagnant air conditioning market. Xiaomi's inverter air conditioners are expected to target young renters and emphasize affordability. Priced around 2,000 yuan, these units could be at least 500 yuan cheaper than similar products. Xiaomi's reputation for offering high-quality products at competitive prices, coupled with their strong brand loyalty among users, could spark a price war and attract more consumers.
Leibo, a prominent analyst, believes that Changhong's manufacturing capabilities and product quality are beyond reproach. As Changhong grows, Xiaomi's brand could complement each other effectively.
Zhang Yanbin, Dean of the Ovid Consulting and Research Institute, agrees that Xiaomi's presence could invigorate the air conditioning industry. As an internet brand, Xiaomi brings fresh ideas and innovative strategies to a saturated market. Traditional manufacturers could learn from Xiaomi's marketing techniques and user-centric approach, especially as O2O models become more prevalent.
Xiaomi's entry into the air conditioning market aligns with their broader strategy for a smart home ecosystem. Three years ago, Xiaomi began building this ecosystem by launching the "Mijia" brand, covering everything from hardware peripherals to household appliances. Entering the air conditioning market represents a significant step toward realizing their vision of dominating the smart home landscape.
Currently, Mijia's product line focuses on peripheral hardware and smaller appliances, known for their affordability and market success. Introducing air conditioners indicates Xiaomi's determination to bridge gaps in their smart home offerings and solidify their position across every aspect of young households' lives.