Tech gi­ants com­pete for healthy con­sumers

China Daily (Canada) - - CHINA - By MENGJING mengjing@chi­

At a re­cent In­ter­net con­fer­ence filled with China’s tech­nol­ogy ty­coons, Jack Ma of the mighty Alibaba Group Hold­ing Ltd teased Lei Jun, head of the rapidly ris­ing Xiaomi Corp, by ask­ing why a smart­phone mat­ters when the air and wa­ter in China are so bad?

So when the Beijing-based Xiaomi, the world’s third­largest smart­phone maker, un­veiled a home air pu­ri­fier in early De­cem­ber, many saw it as Lei’s re­sponse toMa.

The gad­get, which can be re­motely con­trolled via a smart­phone ap­pli­ca­tion, is able to clean as as much as 406 cu­bic me­ters of pol­luted air in an hour, but more sig­nif­i­cantly, it is priced at 899 yuan ($144) when ri­val prod­ucts with sim­i­lar ca­pac­i­ties sold by global play­ers such as Blueair AB and Sharp Corp, re­tail at more than 4,000 yuan.

In fact, Xiaomi is just the lat­est of the China’s tech com­pa­nies to join the fight against the coun­try’s poor air qual­ity.

Air pu­ri­fiers are be­com­ing a must-have home ap­pli­ance in Beijing and other ci­ties in north­ern China, where the smog en­dan­gers peo­ple’s health.

Be­sides Xiaomi, browser company Chee­tah Mo­bile Inc also launched a 998-yuan smart air pu­ri­fier that can give users real-time up­dates of the air pol­lu­tion lev­els in their homes, while Chi­nese se­cu­rity soft­ware company Qi­hoo 360 and con­sumer elec­tron­ics en­ter­prise TCL have jointly launched an air pu­ri­fier priced at 1,440 yuan.

Ma Ji­hua, an in­de­pen­dent in­for­ma­tion tech­nol­ogy ex­pert, said that the rea­son for tech com­pa­nies mov­ing into the air pu­ri­fier sec­tor is sim­ple: “It is po­ten­tially a huge mar­ket, as an in­creas­ing num­ber of peo­ple want to breathe clean air. More im­por­tantly, for tech com­pa­nies that want to ex­pand into the smart home sec­tor and cre­ate a se­ries of next-gen­er­a­tion house­hold ap­pli­ances, there is no bet­ter en­try prod­uct than an air pu­ri­fier.”

“There are well-es­tab­lished brands in the tra­di­tional home ap­pli­ances sec­tor, such as fridges and air con­di­tion­ers, but air pu­ri­fiers are an emerg­ing sec­tor in­China, and it is still pos­si­ble for new­com­ers to make break­throughs to be­come dom­i­nant play­ers,” saidMa.

Most of the tech com­pa­nies are tar­get­ing the mid- to lowend mar­ket, with prices no more than 1,500 yuan. “The pric­ing strat­egy is very at­trac­tive for some young po­ten­tial buy­ers. More­over, tech com­pa­nies have strong on­line dis­tri­bu­tion chan­nels, which can be­come their edge to com­pete with the ex­ist­ing prod­ucts launched by tra­di­tional air pu­ri­fier mak­ers,” said Xu Yan­guang, an an­a­lyst with the Beijing-based home ap­pli­ance con­sul­tancy All ViewCon­sult­ing Ltd.

Xu, who spe­cial­izes in the air con­di­tioner and air pu­ri­fier sec­tors, said that the dis­ad­van­tage for th­ese tech com­pa­nies lies in their lack of core tech­nol­ogy in clean­ing air.

Kong Zhiqiang, vice-pres­i­dent of Ama­zon China, said at a re­cent press con­fer­ence in Beijing: “Our sales num­bers sug­gest that peo­ple tend to buy high-priced air pu­ri­fiers be­cause they be­lieve higher prices mean a bet­ter prod­uct.”

Ama­zon China has set up a ver­ti­cal web­site ded­i­cated to sell­ing anti-pol­lu­tion prod­ucts, and Kong said the sales of health-re­lated prod­ucts are ex­pected to grow rapidly in 2015.

“Sales of air pu­ri­fiers jumped 50 per­cent year-onyear in Novem­ber. And the sales of masks surged 336 per­cent quar­ter-on-quar­ter in the same pe­riod,” said Kong.

He ex­pects more money will be spent on health-re­lated prod­ucts in the com­ing years, as peo­ple are in­creas­ingly con­cerned about the health risks from air and wa­ter pol­lu­tion,

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