China’s booming smog-related businesses

A couple wearing protection masks visits the Temple of Heaven in Beijing on February 7, 2017. Photo: Andy Wong/Associated Press

China’s notorious choking smog in recent years has created a boom for anti-smog businesses in the country, from protective masks to newly rising anti-smog products like air purifier, fresh air system and indoor PM2.5 testers.

Meanwhile, more and more companies are eying this market in order not to miss such a great opportunity. To promote the healthy development of the newly rising market and guarantee the quality of anti-smog products, the Chinese government has also stepped up their efforts to set new standards for this market.

The 3rd issue of the Oriental Outlook magazine published on January 19, 2017 ran a cover story on the booming anti-smog businesses in China in recent years, bringing insights from several insiders from the industry.

Below is the excerpt of the story.


Increasing demand

China’s mask market once boomed in 2003 due to SARS, and it began to rise again 10 years later because of the country’s escalating air pollution since 2013.

While the sales of masks, mostly for industrial and medical use, in the whole country was 288 million in 2011, the sales of masks for civilian use increased rapidly in 2013, especially during winter months when choking smog shrouded most of China’s northern cities, according to Chen Haida, secretary-general of safety and health protective products committee of the China Textile Commerce Association.

The sales of masks for industrial, medical and civilian use reached 1.8 billion in 2016 from 1.2 billion in 2012, and the increase was mainly caused by the large demand for the so-called anti-haze masks.

As people are much more concerned about the haze than before, the demand for anti-haze masks is still increasing, according to Chen who expects the increase rate at around 30% each year.

Besides protective masks, other anti-smog products such as air purifier, fresh air system, and PM 2.5 tester are also showing huge market potential in China.

The sales volume of air purifiers in China was 3.98 million in 2014, up 59.2% from that in 2013, and the number continued to rise to 6.5 million in 2015, according to a report by Zhiyan.org.

It is also reported that the sales volume of air purifiers from January to June in 2016 was 4.5 million, increasing by 58% year-on-year, amounting to the whole year sales volume of North American markets in 2015.

However, although the sales volume of air purifiers broke 6.5 million in 2015, the penetration rate of air purifiers is less than 0.1% in China, while it is more than 20% in countries like the US, Japan and Canada, according to Shen Hao, laboratory head of the Shanghai Institute of Measurement and Testing Technology. “This means China’s air purifier market still has a huge potential to grow,” he said.

Fresh air system is another choice for people living in China to tackle haze. It was from 2012 when choking smog become a hot topic in China. It is also from that year that fresh air market began to rise in China, according to Jin Caihong, manager of Broad Group.

According to a report by All View Cloud, the market size of fresh air system in China reached 4.5 billion yuan in 2015, and is expected to break 6 billion yuan in 2016. By 2020, it is expected to reach 50 billion yuan.

“The fresh air system market has been increasing with a compound annual growth rate (CAGR) of 80% since 2013,” said Jin. While only upscale residences, international schools and office buildings installed fresh air systems before, more and more ordinary families and individuals are purchasing fresh air systems now, according to Jin.

Quality concerns

As smog-inspired business is growing in China, many more companies are stepping into the industry than before in order not to miss the opportunity to make quick money. And this has created big challenges for consumers to identify the products which are truly helpful in protecting themselves against the smog.

With the increasing demand for anti-haze masks, many companies which used to make industrial or medical masks are turning to produce anti-haze masks, but it’s hard to make sure that all of them are making real anti-haze masks as they claim and it’s also difficult for the customers to identify the truly effective products.

“Not all masks can effectively protect us from the haze,” said Wang Yan who is in charge of mask export business for Shanghai Gangkai Purifying Products Co., adding that unless the consumers have some professional knowledge, it’ll be quite difficult for them to pick the masks which can effectively filter PM2.5.

In fact, lots of masks in China are OEM (Original Equipment Manufacturer) products with a brand of another company.

“You don’t have to have experience to start mask business. You can just find an OEM who makes masks and tag your own brand on them,” said a business insider who declined to be named.

Such OEMs are mainly located in Yangtze River Delta provinces of China, and mostly are in Zhejiang and Jiangsu province. One of the OEMs in Yiwu, Zhejiang province, makes masks for as many as 50 brands, some of which are foreign brands and renowned domestic brands.

According to Chen Haixiang, a manager of an OEM in Shaoxing, Zhejiang province, the price of an OEM mask with a paper package and two pieces of acticarbon is 3.5 yuan ($0.51), while the one with a breathing valve is 3.8 yuan. In another OEM in Suzhou, Jiangsu province, the lowest price for a mask is only 1.8 yuan ($0.26), while they claim the product can not only protect people against the haze, but also filter formaldehyde.

“Many single-use masks at most protect us from dust and germs, so you cannot totally rely on those masks for protecting yourself against the haze. Even the so-called acticarbon masks can hardly filter PM2.5,” said Chen.

According to a report by the General Administration of Quality Supervision, Inspection and Quarantine of China (QAQSIQ) which conducted a sampling inspection on China’s air purifier markets in 2016, 15 batches of air purifiers produced by 14 companies among all of 61 batches inspected failed to meet several quality standards including safety index, function index and electromagnetic compatibility index.

Although such a sampling inspection cannot fully reflect the quality of all the air purifiers on the market, when more than 20% of the samples are unqualified, it means the products have quality problems, according to Zhu Yan, an engineer from the China Household Electric Appliance Research Institute.

According to the report by QAQSIQ, among the sampled companies, 48.2% were big companies, 25% were medium-sized companies and 26.8% were small companies, but the ratio of unqualified samples was 10%, 43.7% and 33.3% respectively for the three categories of companies.

“It shows that the quality of the products made by big companies is higher than those made by small and medium-sized companies,” said Zhu.

New standards

In April 25, 2015, China released its first national standard for daily protective mask which was implemented from November 1, 2016. This is the first standard on protective mask for civilian use in China, which includes the indicator of PM 2.5 protective performance which can be classified into four grades of A, B, C and D, based on the air quality index. People are suggested to wear protective masks of grade A during severely hazardous weather.

But it should be noted that the new standard is not mandatory, which means companies can choose not to follow the specifications when producing masks. “Customers should buy masks from companies which produced protective masks according to the new standard. In this way, more and more companies will follow the new standard,” said Li Guimei, vice chairman of the China Nonwovens & Industrial Textiles Association.

In September 2015, China also issued a new national standard for air purifiers, which was implemented from March 1, 2016, specifying the effective area, lifespan, names and definitions of the purifiers, as well as stipulating Clean Air Delivery Rate (CADR) and CCM or Cumulate Clean Mass as the core parameters of an air purifier.

“The higher the CADR is, the more effective the air purifier will be. But when we purchase a purifier, we should take into consideration the area of our room,” said Zhu.

Before the new national standard, customers usually refer to indexes indicating how much pollutant like PM 2.5 or formaldehyde the purifier could filter, but the purifying rate is only a relative indicator which can hardly reflect the true purifying efficiency of the air purifier, according to Zhu.

CADR and CCM are the two core indicators of the effectiveness of an air purifier. But the new national standard is only a bottom line for air purifier companies if they want a sustainable development. “They must know how to make their products stand out in the market. With the intensifying competition, appearance, smartness and some other functions are also key elements for them to compete with other brands,” said Xu Liheng, CEO of Baomi company.

However, not every type of anti-smog product has a unified standard, as is the case with the PM2.5 testers.

According to Wu Hongjiang, a partner of Hanvon Technology Co., over 90% of the companies selling PM2.5 testers do not have factories, but also commission OEMs to produce their products. “There are indeed companies entering this field just for making money,” he said.

What’s more, almost all companies selling PM2.5 testers neither have research teams nor produce the core part of a PM2.5 tester, the PM2.5 sensor, but only an external sensor, according to Jiang Yuanbin, a marketing director of a branch company of Panasonic China.

While calls for a national standard for indoor air quality testers are rising, Wu expected the new standard to be released at least after two years because the industry is still not mature enough for the government to draw up a new standard.


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