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Global trends in the cooling sector

VRF shifting from B2B to B2C business

| | May 10, 2017 | 6:31 pm
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Stereotypes in the cooling sector market are being challenged of late, with manufacturers across the globe reporting a significant change in consumer habits, as discerned by the HVACR industry. Experts cite the case of manufacturers who typically cater to a B2B market, wherein, new trends have prompted them to explore the B2C market, which showcases a wide range of new opportunities.

Qingdao Hisense Hitachi Air-conditioning Systems is one such manufacturer. Zhang Wenqiang, Senior Vice President at the company, observed that China’s VRF industry, while continuing to supply to project developments, has been gaining stronger foothold in the B2C market. Wenqiang highlighted that instead of real estate, what is driving the market is “the individual buyer”. This was confirmed by Dick Shi, Regional Director, Middle East Africa, Hisense/Hitachi, who said: “In China, there is a new situation. VRF is shifting from a B2B business to a B2C business. Individuals purchase VRFs instead of splits. In China, you have option – you can install splits, and you can install VRFs.”

Although splits continue to largely cater to end-users in the Gulf, manufacturers and suppliers operating in the region admit that a sizable amount of their business also lies in B2B. Changho Lee, General Manager, RAC Sales Division, LG Electronics Gulf, said, “We can say, with regard to our split air conditioning market, 40% is B2B and 60% B2C. This low-energy consumption point can be very strong in B2B.”

However, Lee added that consumers in the Middle East continue to look towards splits as an easy and affordable solution, though the region’s harsh climate and sustainability agenda does urge them to look for more environmentally friendly options. “In B2C,” he said, “because of the price situation, most end-customers may feel some burden because electricity cost is increasing. Most of the customers want energy-efficient [solutions] to help with the cost. It’s a very strong selling point to end-customers.”

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