A report from China Galaxy Securities Co., Ltd. highlights that the International Energy Agency forecasts the number of air conditioning units in the European Union to reach 275 million by 2050, more than double the 2019 figure.

While multiple constraints have historically limited air conditioner installation in Europe, these challenges are creating significant opportunities for innovative, easy-to-install products.

The immense popularity of the PortaSplit unit in Europe demonstrates that leading Chinese manufacturers in the hard goods sector have developed formidable global competitiveness.

These companies are progressively transitioning from merely exporting products, to establishing overseas production capacity, and ultimately to building international brands.

Chinese consumer goods leaders are pursuing a dual strategy of globalized manufacturing and international branding, enabling them to shift production while simultaneously accessing and localizing operations in target consumer markets, thereby continuously increasing their global market share.

Climate Factors Unlock European AC Demand

Historically, Europe's short-lived summer heatwaves resulted in weak air conditioning demand and low consumer installation rates, with the IEA reporting a penetration rate of just 19% in 2022, far below the global average of 37%.

Recent years of global warming and recurring El Niño events have repeatedly driven extreme summer heat across Europe, with another significant heatwave occurring in the summer of 2026.

In late June, temperatures in several cities across France, Germany, the UK, and Spain approached 40°C.

During a 2026 heat dome event, European temperatures were approximately 15°C higher than the seasonal average, significantly stimulating market demand for air conditioners.

Structural Bottlenecks in Europe Create a Niche for Innovation

Prominent structural issues in Europe—such as being able to afford a unit but not the installation, or facing outright prohibitions—are core constraints suppressing higher penetration rates.

Installation is hindered by multiple factors: strict restrictions on drilling into historic building facades and hanging external units, with lengthy approval processes; high labor costs where installation fees of 1,500-2,000 euros can exceed the cost of the unit itself, coupled with long wait times; existing residential infrastructure being primarily designed for heating, compounded by high energy prices making additional electricity costs from AC use unaffordable for many households; and concerns that increased AC usage will raise energy consumption, complicating the achievement of 2050 carbon neutrality goals.

While these factors suppress overall penetration, they create a vast substitution space for innovative products that require no drilling or professional installation.

Midea's PortaSplit: A Case Study in Branded Exports

Addressing the surge in demand from European heatwaves and the pain points of local installation rules, Midea launched the PortaSplit air conditioner.

Its benefits—no drilling, no professional installation required, portability, low noise, and high energy efficiency—made it an instant hit in Europe, selling out in many areas with resale prices doubling.

Midea is ensuring supply by ramping up production at its Shunde factory in Guangdong and utilizing the China-Europe Railway Express for faster logistics.

The success of PortaSplit exemplifies Midea's commitment to its Original Brand Manufacturing strategy, which aims for OBM revenue to constitute 45% of its overseas smart home business income by 2025.

It also reflects the strong global competitiveness of China's leading hard goods exporters and their ongoing evolution from product exports to capacity exports and finally to brand exports.

European Sales May Boost Export Confidence Amid Sluggish Figures

Data shows that from January to May 2026, China's household air conditioner exports fell by 6.8% year-on-year, with a 4.2% drop in May alone.

Current production scheduling data is weak, with planned export volumes for July through September down 11.7%, 13.6%, and 7.8% respectively compared to the same period last year.

However, given that the heatwave has also stimulated demand for traditional split-type air conditioners in Europe, and considering that China is the largest source of EU air conditioner imports, it is anticipated that subsequent export production schedules may be revised upward, injecting confidence into corporate production planning.

Key Risk Factors

Potential risks include uncertainties in the international landscape and intensifying market competition.