sandalwood

Key Takeaways

Global AC demand is shifting from seasonal to climate-driven necessity, driving sustained overseas growth. Latin America is the core growth engine, supported by Europe and Asia-Pacific, with LatAm showing counter-seasonal trends.

Entry-level drives volume, featuring LatAm upgrades, North American down-trading, and European high-end growth. The market is in a phase of multi-region, multi-tier parallel growth.

Chinese brands strengthen global supply advantages, capturing incremental demand in emerging markets. High-end competition focuses on energy efficiency and core tech, with Korean brands gaining competitiveness.

Market sustains high growth, with LatAm's counter-seasonal demand offsetting off-peak fluctuations.

Amid intensifying climate change and geopolitical uncertainties, the AC industry is driven by both "demand expansion" and "supply chain volatility."

• Demand Shift: Frequent extreme heat is accelerating the transition from "seasonal consumption" to "climate necessity." For instance, the 2025 heatwaves in Europe boosted demand and accelerated market penetration.
• Supply & Regulation: Geopolitical tensions have caused volatility in raw materials and components，with core material prices remaining high and compressors facing seasonal shortages. Meanwhile, rising standards (e.g., EU's SEER) and low-GWP refrigerant requirements (e.g., R32 transition) have raised technical barriers for market entry.

Against this backdrop, the rolling annual data (24Q2–25Q1 vs 25Q2–26Q1) shows the overseas e-commerce AC market remains on a high-growth track. Latin America is the core growth engine, supported by Europe and Asia-Pacific, while North America sees only slight growth.

According to Sandalwood global e-commerce data, regional seasonality varies significantly:

• North America: Strong seasonality, with peak season (Q2+Q3) volume ~3.4x the off-peak.
• Europe: Moderate seasonality (~2.5x).
• Latin America: "Counter-seasonal + moderate fluctuation." Peak season (Q4+Q1) is ~1.8x the off-peak, driven by Southern Hemisphere demand.
• Asia-Pacific: Most stable (~1.4x), with balanced year-round demand.

Material substitution drives cost reduction, enhancing the expansion capability of the entry-level market

Amid raw material volatility and deepening global consumption stratification, the AC price structure is being shaped by the dual forces of "rising costs" and "downward-shifting demand."

From the demand side, diverging global purchasing power is driving growth toward the entry-level market:

• $0–300: Fastest growth (+56%), share rising to 32% (+3pct), becoming the core source of scale expansion.
• $300–600: Maintains steady growth (+38%), accounting for ~56% as the market's central pillar.
• $600+: High-end growth is relatively moderate (+21%), with share slightly declining to 12%.

From the supply side, cost and technical constraints are impacting different price segments:

• Fluctuating prices of key raw materials like copper are pushing manufacturers to adopt material substitution (e.g., aluminum for copper) to compress costs, giving the entry-level segment stronger expansion capability.
• The high-end market faces lower supply elasticity due to constraints in compressor performance, energy efficiency standards, and low-GWP refrigerant adaptation.

Regionally:

• North America: Demand concentrates in the $0–300 range (+31%), showing a structural shift downward.
• Latin America: Growth is driven by the mid-range $300–600 segment (+201%), reflecting consumption upgrades.
• Europe: Growth is led by the $600+ high-end segment (+59%).
• Asia-Pacific: Relies on the continuous expansion of the $0–300 segment (+71%), maintaining scale-driven growth.

Overall, the global price structure is not undergoing a simple upgrade or downgrade. Instead, it is forming a differentiated regional pattern: "North American down-trading, Latin American upgrading, Asia-Pacific entry-level expansion, and European high-end growth."

Chinese brands continue to strengthen the entry-level market, capturing incremental demand in emerging regions

From the overall landscape, the share of Chinese brands rose from ~30% to 32%, continuously reinforcing top-tier supply capabilities. Korean brands steadily grew to 13%, while Japanese brands declined to 12%. Small, medium, and local brands still account for 42%–44%, indicating the industry's concentration remains at a moderate level.

Breaking it down by price segment:

• In the $0–300 entry-level market, Chinese brands dominate, with their share rising from ~43% to 47% (+4pct). As Japanese and Korean brands continue to contract, the market presents a "Chinese-dominated + long-tail supplemented" pattern.
• In the mid-to-high-end markets ($300–600 and $600+), Korean brands showed significant overall improvement, rising to 16% (+4pct) and 18% (+6pct) respectively, becoming the primary growth. Chinese brands continue to penetrate the high-end sector, rising from 10% to 13% (+3pct), but saw a slight dip in the mid-range to 28% (-2pct).

Regionally:

• North America and Europe are primarily led by "Chinese supply + local/SME brands," but Chinese brands show divergent performance—share remains stable at 31% in North America, while rapidly expanding in Europe from 26% to 30%, as Japanese and Korean brands weaken YoY.
• Latin America is accelerating towards top-tier concentration, with Chinese (23%→24%) and Korean (25%→26%) brands growing in tandem, while the long-tail dropped from 51% to 48%.
• Asia-Pacific is entering a mature competitive stage. Chinese brands saw a slight increase (33%→34%), Japanese brands declined significantly (27%→23%), and local brands (India, Southeast Asia) are rising, intensifying multi-faction competition.

Overall, Chinese brands continue to expand in the entry-level market by leveraging supply chain and cost advantages, capturing the majority of incremental demand in emerging markets like Europe and Latin America, compounded by climate-driven demand. Although continuous penetration has been achieved in the high-end market (+3pct), the core of competition is shifting from "cost and scale" to "compressor performance, energy efficiency, and system solution capabilities," leaving room for further improvement for Chinese brands.