How can Xuzhou Yingliang outperform its peers when the market size is difficult to grow?

Starting from July 20th, Hu Liangsheng began a week-long market visit, driving through Shandong, Zhejiang, Jiangxi and other regions. The journey of thousands of kilometers carried his summary of the 2024 fiscal year work and expectations for the upcoming market.

Hu Liangsheng is the general manager of Xuzhou Yingliang Intelligent Technology. 2024 marked the first peak season for Yingliang air conditioners after production began, making market feedback and customer opinions particularly important.

"From the perspective of the fiscal year, our sales volume met expectations, and profitability remained within controllable range. As it's our first year, there's no basis for comparison, but we captured some market opportunities, so we might have performed slightly better than some competing brands. However, if I were to rate it, it would be 'passing grade'." Hu Liangsheng's evaluation of his work and Yingliang's market performance was quite surprising.

"Price competition must not compromise product quality and stability"

It seems that every summer's rising temperatures would fuel growth in the air conditioner market. But this year's peak season didn't seem to benefit from the "high temperature" effect. In the 2024 fiscal year, both from shipment volume and retail sales perspectives, the entire domestic market showed significant contraction; yet the air conditioning industry's capacity expansion continues unabated, with new brands and production bases emerging constantly.

Yingliang Air Conditioner is one of them.

With heavy market saturation and intense competition, Yingliang faced challenges from its entry into the industry. "We started some preparations last year for this year's needs. For example, we developed several cost-effective models, and when the price war came this year, we could compete on the same track. This gave us a chance to get ahead. Without such preparation, we would have fallen behind."

This year's peak season saw reignited price wars, with leading brands initiating price cuts, mid-tier brands following suit, and smaller brands facing further price compression. With raw material costs (especially copper) remaining high, production costs increased. In such challenging circumstances, maintaining commitment to technology and production investment during market downturns presents a severe test.

This year's low online prices for air conditioners stem from high inventory and weak demand. When leading brands cut prices, mid-tier brands had to follow. For manufacturers, maintaining technological investment during market downturns is a serious challenge.

"Price competition must not compromise product quality and stability." Regarding entering the market with cost-effective products, Hu Liangsheng drew this bottom line.

From the beginning of production, Yingliang's factory was clear about its mission: through application of new materials, technologies and processes, Yingliang Intelligent Technology is committed to creating a full range of high-quality air conditioning products. The product lineup includes 1-5HP cooling-only, heat-pump, and inverter air conditioners, central air conditioning, air-source heat pumps, as well as seafood machines, kitchen air conditioners, automotive air conditioners, fresh air systems, and coal-to-electricity project heaters, broadening the market through diversified operations.

With quality as the foundation, using technological upgrades to reduce costs and prices, and building a comprehensive product portfolio, Yingliang has established its developmental cornerstone among similar brands.

"Businesses must recognize market changes and serve customers."

The 2024 market situation is complex and volatile, full of uncertainties and challenges. Even under price pressures, the air conditioning market still struggles to show last year's "highlight moments." But this doesn't mean growth opportunities have disappeared - in this changing industry environment, new opportunities still exist.

"Businesses must recognize market changes, we must serve our customers." Because in Yingliang's business units, e-commerce and OEM rank at the top.

"Our e-commerce performance this year was decent. Beyond focusing on R&D and production, we extended our efforts to after-sales service. We promised customers we would handle returns and after-sales, providing merchants with guarantees. Merchants know their numbers - when they make money this way, they'll recommend us to peers," Hu Liangsheng explained.

For Yingliang, what's important is refining work beyond products - competing on service at the same price point, helping customers realize value. After all, for such brands, the market is the ultimate judge.

"We also customize products according to customer needs. Although this makes our work more demanding, it makes things easier for customers. I tell them: don't worry about whether we're tired, as long as you're comfortable."

"It all comes down to who plans further ahead and executes more meticulously."

Considering total domestic and export sales, the air conditioning industry's overall production and sales in 2024 actually remained relatively stable without significant decline, even though the domestic market situation was quite severe, its foundation didn't collapse.

This is also what Hu Liangsheng considered: "Actually, the industry's total volume hasn't declined much, and won't in the future. What we need to do is develop amid competition."

Therefore, as the 2024 fiscal year drew to a close, he embarked on customer visits. "Customers are on the market frontlines. We embrace customers and the market, learning about market demands from them. Otherwise, the models we work so hard to develop might not gain market acceptance."

Yingliang's philosophy of developing products based on customer needs will continue into the new fiscal year. "Our core focus remains products - staying close to the market and gaining customer acceptance. In terms of models, our 2024 products concentrated on wall-mounted units. In the new fiscal year, we want to perfect cabinet units, but product stability comes first."

Additionally, Hu Liangsheng has already started preparing products for e-commerce platforms in advance. He believes: "E-commerce products might see widespread adjustments. Current problems include brand name loopholes, exaggerated specifications, and inflated claims - these unethical practices will eventually be rectified." Therefore, product quality remains Yingliang's core competitive advantage in any sector.

For foreign trade, Yingliang has established separate R&D and business teams, planning to develop more models next year including window units and wall-mounted units, with sales personnel stationed in Guangdong and other regions. Hu Liangsheng said: "We might see results next year."

"Competition in every sector will intensify - it all comes down to who plans further ahead and executes more meticulously." In a saturated market without scale growth, Yingliang Air Conditioner is building its own development approach by preparing thoroughly and winning customers through attention to detail.