Daikin Faces a New Phase in China — Pursuing Growth Through Energy Efficiency and Digitalization Amid Market Slowdown

Despite sluggish demand, the company leverages multi-split systems and smart solutions to strengthen its brand presence

China’s HVAC market faced headwinds in the fiscal year ending March 2025, as a downturn in the real estate sector and weakened consumer spending weighed heavily on demand. Sales of both residential and commercial units declined due to reduced new construction, though replacement and renovation needs in the residential sector, along with energy-saving demand in the commercial sector, provided some support.

In response, Daikin sought to differentiate itself by focusing on residential multi-split systems. Leveraging its proprietary sales network, the company combined showrooms with online promotions, while also utilizing social media campaigns to enhance brand visibility. On the commercial side, Daikin delivered solutions for green buildings and energy-efficient factories, strengthening its position with products that reduce energy consumption.

Looking forward, Daikin is preparing to advance integrated solutions using data, IoT, and AI in residential air conditioning. Collaborations with smart-home companies and the rollout of digital controllers are expected to improve comfort while optimizing energy performance. In the commercial domain, tightening energy regulations and environmental policies will support growth, with expansion planned not only for factories and offices but also into emerging fields such as data centers. These initiatives are set to further enhance Daikin’s brand value in the Chinese market.

Key Terms Explained

Residential Multi-Split System: An HVAC system where one outdoor unit controls multiple indoor units. Known for space efficiency and energy savings.

Green Building: Environmentally conscious construction that emphasizes energy efficiency. HVAC systems play a key role in achieving certification and compliance.

IoT & AI Solutions: Systems that use sensors and data analytics to optimize HVAC operation, balancing comfort with energy efficiency. Considered a future driver of competitiveness.

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