Midea targets top three in air-conditioning market
Toshiba Thailand Co, a local affiliate of Chinese consumer appliance giant Midea Group, aims to build the Midea brand into one of the three leading air-conditioner brands locally over the next five years.
Company president Brian Zhao said that while Thailand’s economy is in recovery mode, the market for air conditioners remains in the doldrums.
The overall air-con market in the first 10 months of the year was down 9.8% year-on-year because the weather was less hot than expected and consumers shifted spending to essentials.
In contrast, Midea performed well with 54% growth in the same period. One reason is that the Midea brand has been operating under Toshiba Thailand’s team since the beginning of the year, instilling confidence in the market.
The company has introduced affordable products and continuously invested in marketing. Another key is that Thais are showing more confidence in Chinese brands.
More importantly, a close collaboration between the Thai and Chinese governments under the One Belt One Road initiative is supporting a good trade environment for companies from both countries.
“Many economic schools have forecast that the Thai economy will grow by 3.8% in 2019 and 3.5% in 2020,” Mr Zhao said. “In line with the growing economic trend, the property sector tends to expand. In addition to this, many of our competitors are not expanding as they should. This opens a great opportunity for Midea air conditioners to grow.”
According to Mr Zhao, Midea has set a target to be one of Thailand’s three most popular brands within five years, with a market share of at least 13% by 2022, up from 4.5% in 2019.
The Thai air-con market saw 1.3 million units sold last year, with the number expected to grow to 1.4 million units this year. The top three brands are Mitsubishi, Daikin and Panasonic.
Midea is committed to upgrading products and launching 20 new air conditioners in the market next year.
In 2019, the company plans to spend 12% of revenue on marketing to build brand awareness, with a focus on storefronts and inner store displays and promotional activities.
“We anticipate that the market next year will recover on the back of continuously rising demand for inverter air conditioners,” Mr Zhao said.
With this in mind, the company plans to launch enhanced inverter products to capitalise on rising demand, he said.
Kanit Muangkrachang, chairwoman of Toshiba Thailand, formerly under Japan’s Toshiba Corp, said the company believes that Midea air conditioners will become an alternative for Thais as a result of branding.
“We have increased the brand’s visibility aggressively since last year,” Mrs Kanit said.
Henry Cheng, general manager of the AC products division for Asean, said Midea is China’s leading appliance manufacturer and distributor.
Founded 50 years ago, the company has 18 factories across China and 15 factories in other countries.
In 2017, Midea took in global revenue of US$36 billion (1.18 trillion baht), up 28% from a year earlier.
Midea exports to more than 200 countries worldwide.