Interpreting the “Rise” of Skyworth Air-conditioner from the Perspective of "Born for Users"

September 21,2015

    On September 19, 2015, Skyworth Air-conditioner Annual Distributor Conference 2016 and New Products Release Conference was held in Zhongshan, Guangdong with a theme of "Start from the Top". Lin Weiping, the chairman of board of directors of Skyworth Group, Yang Dongwen, the president of Skyworth Group, Liu Tangzhi, the vice president of Skyworth Group and the president of Color TV Business Division, Peng Jing, marketing general manager of China Region of the Color TV Business Division of Skyworth Group, Xiao Youyuan, the president of Skyworth Air-conditioner and several industrial experts and distributors of Skyworth Air-conditioner from all over China gathered together to jointly unveil how Skyworth struggles to survive in air-conditioner industry and make a deep exploration on the development direction of Skyworth Air-conditioner.

    Since its establishment in June last year, Skyworth Air-conditioner has kept low-profile in operation. Except for the air-conditioner roll-out ceremony at the beginning of the year, Skyworth Air-conditioner and its leader team have seldom come under the spotlight. This release conference was also the first public event held by Skyworth Air-conditioner that is open to the industry, media and all walks of life.

    From the establishment of Skyworth Air-conditioner, the industry has doubted whether it can survive. After all, since 2014, affected by the overall economic environment of China, the air-conditioner industry has been caught in a dim development status, with sluggish market, weak market demand, overstocked products and excess production capacity being the normal state. Air-conditioner enterprises including the industrial leader Gree have unexceptionally begun to show a declining trend. Generally speaking, the air-conditioner industry has arrived at a crossing of development. As a new force in the market, how can Skyworth Air-conditioner guarantee survival and strive for development?

    So we have made an interview with Xiao Youyuan, the president of Skyworth Air-conditioner. When asked this question, Xiao has given us a confident and affirmative answer:

    In the past, traditional air-conditioner enterprises did not attach much importance to user concept, so their development was solely based on production scale and capacity. With the advent of the mobile Internet era, under the shock of massive information, the user consciousness has been awaked and the user demand has gradually become the core. Based on this understanding, Skyworth Air-conditioner believes that today's customers demand for products with a higher individuality, quality and cost performance. Therefore, under the strong support of Skyworth Group, Skyworth Air-conditioner has declared its march into the "chaotic realm". Guided by the principle of user orientation, it has established a clear-cut stand from the moment it entered the market: Skyworth Air-conditioner is born for users, it will create values for users and make achievements in the market.

    Under the context of the Internet era, the new concept of user orientation keeps stimulating the traditional manufacturing industry. The whole household appliance industry keeps thinking about how to integrate the Internet thinking and the manufacturing industry and promote its own competitiveness. Enterprises like Midea and Haier have begun to practice the concept. However, it is unpredictable whether the traditional manufacturing industry can "get accustomed to the new climate” of the Internet era as there is no universal operation model for all enterprises. A good model must find a right integrating point into the reality to make the enterprise survive.

    Perhaps Skyworth Air-conditioner is currently the first enterprise in the air-conditioner industry to elevate the concept of "Born for Users" to the corporate concept level. Xiao Youyuan believed that, as a new brand of the industry, Skyworth withstands less constraint from a large system. Compared with other brands, Skyworth Air-conditioner has gone to the battle front without burden, and can realize the concept of user experience more thoroughly and considerably. Whether it is to create brand, products or channels, Skyworth has considered from the perspective of users and aimed to create higher values for the users.

    In the interview, Xiao made a brief statement on the following three aspects regarding the specific implementation of "Born for Users".
    Establishing a Cutting-edge Brand Philosophy, Born for Users

    With the transformation and development of Chinese society, the main consumer groups and consumption trend of China are changing. The generations of 85s and 90s are emerging rapidly in the society, becoming the "increment" core of the whole consumption market. The consumption trend has displayed characteristics such as youth orientation, Internet basis, high quality, individuality and high value and the consumption value has become increasingly rational and quality and value oriented. From the very beginning, Skyworth Air-conditioner has targeted on the future mainstream consumer groups and consumption trend, come up with a brand philosophy that aims to "produce entry-level luxury air-conditioners for the youth".

    Creating Top-class Technologies and Products, Born for Users

    After the air-conditioner, including household appliance brands, going through an industrial crisis featuring excess production capacity and inventory and shrinking demand, some brand manufacturers have realized that competition in output and price are not the best weapon to success, so several brands also choose to abandon the traditional strategy of low quality and low price.

    To the contrary, Skyworth Air-conditioner has developed in the direction of high cost performance. Earlier this year, when the first Skyworth air-conditioner came off the assembly line, Yang Dongwen, the CEO of Skyworth Group, officially put forward the general directive that "Skyworth will only produce good air-conditioners". In this interview, Xiao stated three "weapons" that Skyworth uses to produce "good air-conditioners", which are high quality, high integrating degree and high added-value.

    Then what exactly are high quality, high integrating degree and high added-value?

    First, high quality is the only principle that Skyworth air-conditioners uphold from industrial design to manufacturing process.

    Secondly, a high integrating degree means compliance with the market demands. In the past, traditional air-conditioner enterprises dominated the product research and development, which guided the market consumption with their own technical strength, product innovation and technical upgrade but neglected the demands of users. For Skyworth Air-conditioner, the product research and development must be user oriented, and the reform of product technologies shall base on a thorough understanding of the market need, so as to design and develop products which can meet the demands of users.

    As to the high added-value, Skyworth Air-conditioner wishes that its products can meet the demands of target customers and arouse a sense of belonging among the customers.
    Establishing High-level Channels and Services, Born for Users

    As a famous household appliance brand in China, after many years of accumulation, Skyworth Group has developed solid strength in channels and services. It's learned from the conference and the interview that Skyworth Air-conditioner has received full support from Skyworth Group, such as the mature and complete RGB sales channels and direct channels, and the construction of dealer channels, as these channels will combine to form its comprehensive offline channels. On one hand, it can reduce the intermediate channel links and control cost to provide the customers with products of a higher quality; on the other hand, it can more deeply master the information of customers, understand the demands of customers with big data analysis and thus better satisfy the demands of customers; meanwhile, the profit margin at the level of terminal sales will be higher. And the active involvement of distributors will also make the terminals provide better services to the customers. Skyworth Air-conditioner has established such channels with an aim to achieve a win-win result for customers, channels and manufacturers.

    Meanwhile, Xiao disclosed that Skyworth Air-conditioner is also actively establishing online channels. It has established channels such as the Online Mall of Skyworth Group and Tmall store. Very soon, you will be able to buy Skyworth air-conditioners on the Internet.

    Xiao believed that the ”rise” of a new air-conditioner brand in the current air-conditioner industry truly relies on user orientation and products and services that suit to user demands. Skyworth Air-conditioner is taking such a path. "Born for users"--for Skyworth Air-conditioner, this chaotic era might also be the best era.

    At the conference site, Skyworth Air-conditioner has exhibited some of their products, including several series of wall mounted air-conditioners, upright air-conditioners and central air-conditioners. The appearance of the products is characterized by a simple and individualistic style that is different from the complex or monotonous appearance of air-conditioners in the past, indicating naturalness and simplicity are the main elements of industrial design of Skyworth Air-conditioner. The products feature not only the obvious workmanship and exquisite appearance, but also functional configuration not second to any first-tier brands, somehow proving that Skyworth Air-conditioner has lived up to its ambition of "Start from the Top".

    At the site, the author has also experienced the smart home system of Skyworth. Its staffs demonstrated how to check the running state of the air-conditioner with the mobile APP. Meanwhile, the newest OS of Skyworth smart TV--Coocaa 5.0 has integrated an open platform of Skyworth smart home, with an aim to make all types and brands of household appliances inter-connected, just as Yang Dongwen declared on the release conference of Skyworth smart home strategy in this March that "We do not want a closed system which only match with products of Skyworth. We also wish that software developers will develop more smart home Apps on our platform, for the collective wisdom usually can bring a higher strength." Compared with traditional household appliance enterprises which are only willing to create a platform exclusive to their brands, the smart home concept advocated by Skyworth is more scientific, reasonable and inclusive, with a higher starting point.
    Finally, the author believes when the current air-conditioner industry is in fierce competition, the entry-level luxury air-conditioners with a high cost performance might be an opportunity for breaking the traditions. The new generations of 85s and 90s attach more importance to living quality and individuality. They will be the main consumer groups in ten years. Skyworth has put forward the concept of entry-level luxury air-conditioner to snatch the early opportunities in the brand new segment market.

    However, whether Skyworth Air-conditioner can stand steadily in the newly blazed field, or will be beaten down by the strong rivals, depends on whether they can provide "entry-level luxury" products which can fully support the concept of "Born for Users". On the conference, we have indeed seen the product style of Skyworth Air-conditioner, and the product system of "Entry-level Luxury Air-conditioner" has been taking shape. Let's wait and see what will happen.