Xiaomi Targets Growth in China’s Air Conditioner Market

Xiaomi Targets Growth in China’s Air Conditioner Market

China: Goldman Sachs anticipates that Xiaomi is launching a new phase of expansion in China’s air conditioner market, with its market share expected to reach approximately 10 per cent by 2026. According to a research report released on September 15, Xiaomi, described as a disruptor in China’s home appliance sector, is pursuing growth not only through pricing strategies but also by leveraging supply chain, manufacturing, distribution channels, and ecosystem efficiency. The report notes that MIDEA GROUP, benefiting from global manufacturing advantages and optimized channel efficiency, remains the most resilient player and is projected to expand its market share further. In contrast, companies heavily reliant on domestic air conditioner sales, charging high product premiums and demonstrating slower responses, such as Gree Electric Appliances, Inc. of Zhuhai , were identified as more vulnerable, with their rating downgraded from ‘Buy’ to ‘Neutral’. Xiaomi is expected to establish itself as a leading brand in the second-tier segment, reflecting the market’s preference for efficient and adaptable players.

China’s split-type air conditioner market has historically been highly concentrated and profitable. Between 2019 and 2024, industry revenue achieved a compound annual growth rate of 4 per cent, while net profits grew at 8 per cent, expanding the total profit pool from RMB 22 billion (USD 3.0 billion) to RMB 32 billion (USD 4.4 billion). Leading companies such as Midea and Gree accounted for 68 per cent of total revenue and 91 per cent of industry profits in 2024, supported by manufacturing and distribution advantages. Xiaomi’s strategy since 2023 has focused on high cost-performance entry-level products, with items priced below 3,000 yuan (approximately USD 440) representing 75 per cent and 66 per cent of its online sales in 2023 and 2024, respectively, significantly above industry averages. Its online market share increased from 7 per cent in January 2023 to 15 per cent in December 2024. In response, Midea, Haier, and Hisense launched competitive entry-level models, stabilizing Xiaomi’s share while expanding their own, whereas Gree’s slower response led to a slight decline in its market share from 18 per cent in December 2024 to 17 per cent in June 2025.

Source: Futubull