Beijing air pollution
The Chinese capital has for many years suffered from serious air pollution. Primary sources of pollutants include exhaust emission from Beijing's more than five million motor vehicles, coal burning in neighbouring regions, dust storms from the north and local construction dust. A particularly severe smog engulfed the city for weeks in early 2013, elevating public awareness to unprecedented levels and prompting the government to roll out emergency measures.
Clearing a way to the top of the mainland China market
Despite being relatively new to the air purifier market, Hunan-based Broad Group has ambitious plans to dominate the sector and counter health-threatening pollution with its heat-recovery technology.
"Although we are now not even one of the top three air-purifier makers in China, we believe we will become No1 in the coming years," said Hu Jie, general manager of the group's air purifier unit, Broad Air Quality Tech. Those top three positions are occupied by Dutch group Philips, Japan's Panasonic and local player Yadu, which together have about 77 per cent of market share, according to Beijing-based market researcher China Market Monitor.
Broad Group, a major air-conditioner manufacturer, was founded in 1988 and set up its air purifier subsidiary in 2005. Although it is younger than 25-year-old Yadu, Broad's air purifiers have a famous user: they clear the air in Zhongnanhai, the Chinese Communist Party leadership compound in Beijing.
Rising concern over air pollution, in particular PM2.5 - fine air particles smaller than 2.5 micrometres that can easily be inhaled and pose the greatest human health risk - had driven up sales of air purifiers and heat-recovery fresh air units, Hu said.
Revenue quadrupled last year to one billion yuan (HK$1.23 billion) from a year earlier. "The strong growth has continued this year and we have received more orders than last year," he said.
Air purifiers for areas of between 20 and 30 square metres were the company's most popular, Hu said, claiming that Broad's electrostatic cleaning system was unique compared with the products of its peers.
The technology filtered 95 per cent of PM2.5, he said. Most home air purifiers used paper filters to obstruct particles, Hu said. These could filter PM10 particles but were unlikely to catch PM2.5, he added.
"A number of property developers use our heat-recovery fresh air units in their new residential premises," Hu said.
As air quality on the mainland was unlikely to improve in the short term, Hu said the market potential for air purifiers was infinite. The penetration rate of air purifiers in China was extremely low at 0.2 per cent, compared with 20 per cent in the United States and 15 per cent in Europe, he said.
He expects revenue from the air purifier market to post 50 per cent compound growth in the coming years. "Broad's growth is likely to outpace the industry average."
Targeting the middle- to high-end market, Broad Group's products are priced between 3,000 yuan and 30,000 yuan. Hu said the growing middle class had become more willing to invest in their health care.