Midea sees surge in domestic sales

Thanks to the hotter weather, the local market is expected to surge significantly by between 60 per cent and 70 per cent, as long as the government decides not to reimpose excise duty on air-conditioners.
If the duty were to be reintroduced, there would be an increase of 30 to 40 per cent in retail prices for air-conditioners, when higher raw-material costs and the hike in minimum wages are also taken into account.
Somchai Pisitjing, president of Midea Electric Trading (Thailand), yesterday said the domestic air-conditioner market had been severely affected last year, when the weather was generally not hot enough to boost sales.
Moreover, the massive floods that hit the country late in the year caused many household consumers to delay their purchases, besides which many housing and other real-estate projects were delayed by the disaster.
“We were able to sell about 10,000 air-conditioners last year, a dramatic drop from the 20,000 units sold in 2010,” he said.
China-based Midea Electric has two major manufacturing facilities, in the Chinese city of Guangzhou and in Ho Chi Minh City in Vietnam. The plants account for 70 per cent and 30 per cent, respectively, of production.
The company plans to double the sales of its air-conditioners and household electrical appliances in the Asian market this year, after being ranked by a leading market research company as a top-six white-goods manufacturer in Asia at the end of last year.
All models of Midea air-conditioners are made using A-grade quality materials of European standard, especially compressors. However, Midea prices are 20-30 per cent lower than popular brands made in the United States and Japan, Somchai said. The popular ceiling cassette-type 12,000-24,000Btu air-conditioners are priced up to 40 per cent lower than popular brands on the market.
In Thailand, the company will focus on increasing the number of nationwide dealers from the current 200 to 250, Somchai said.
As for competition in the domestic air-conditioner market this year, overall production capacity will not be enough because the factories of many manufacturers were flooded at the end of last year. Therefore, they cannot yet reach their maximum output, he said, adding that spare parts are also scarce.
However, Midea has a plant in Vietnam, which has enough capacity to respond to rising Thai demand, he said.
At present, competition in Asian markets for electrical appliances, especially in the air-conditioner category, is affected by increasing energy prices and the trend of choosing air-conditioners in accordance with the rising standard of living among Asians.
Therefore, air-conditioners with complete functions, an energy-efficient system and plasma system are very popular, he said.
Realising these demands within Asia, Midea is focused on developing air-conditioners and other electrical appliances with complete functions under the concept of “Midea saves energy more than you have thought”, he added. Midea’s more than 200,000 employees worldwide contributed to global revenue of more than US$17 billion (Bt527 billion) in 2010. Its network of distributors in more than 150 countries, mainly in Asia, Europe and the Americas, contribute to more than 12 million air-conditioners being sold every year.
According to market research conducted in Asia at the end of last year by Haymarket Media, Midea now has such a prominent white-goods brand that it is ranked sixth in the category across the continent.