Air pollution in China has become one of the most intensely discussed livelihood issues that Chinese government focused on the 12th National People’s Congress (NPC) that was held in Beijing on March 5, 2016. Chinese Premier Li Keqiang declared a “war on pollution” at the Communist-controlled NPC parliament in 2014, but three years later, average particulate levels in Chinese cities still do not meet the World Health Organisation (WHO)’s standards, which considers anything over 10 PM2.5 as health hazard (Maximum annual average PM 2.5 exposure). According to this infographic, in 2016, Beijing had an annual average 7.3 times above WHO’s recommended safe levels.
At the same time, in the context of environmental issues, the rapid rise of environmental protection industry including air purifiers and anti-dust mask offers a great business opportunity in the world’s biggest polluter. Anti-pollution masks also called ‘kouzhao’ (In Chinese口罩) usually, cover the nose and mouth, and include cotton masks with cute designs, surgical masks, and imported high-end filters. In 2014, officials in Shanghai considered distributing free protective masks to residents, after the financial hub of China “suffered one of the worst spells of air pollution on record,” reported The Telegraph. At this time, PM2.5, ambient fine particles less than 2.5 micrometers in diameter causing cardiovascular diseases and lung cancers, rocketed to levels that were more than 20 times those deemed safe by the WHO. If overall, the air quality has improved since then, the Chinese government keeps failing to lower coal use, the country’s biggest source of energy (70 percent) and air pollution (40 percent of the smog in Beijing only). Although coal is currently the major cause of the air pollution in China – about 33% of air pollution is due to industrial plants, 200 news coal power plants will be built across the country, increasing coal’s production by 20 percent in the next three years, according to the website ABC.Net.
In December 2016, northern China (including Beijing, Tianjin and around 70 other northern Chinese cities) has been covered for weeks in a thick toxic smog, composed of high concentrations of PM2.5. It is one of the worst episodes of air pollution the country has seen, affecting 460 million people.
The “red alert” was declared in 24 cities, prompting the closing of schools and airports, restricting traffic and asking citizens to stay indoors. In response, online shoppers splurged on filtration masks, pollution monitors, air filters and purifiers and other anti-pollution gadgets, with e-commerce firms and brands reporting record demand, as explained by Reuters. With challenges come opportunities: every winter, more precisely from December to April when China’s air pollution is at its worst, especially in Northeast China which is the home to seven of the country’s ten smoggiest cities, sales of masks in China are surging. Global Times describes in an article that over a five-day period in December 2016, Internet retailer JD.com Inc sold to domestic consumers about 110,000 air purifiers and 15 million US-branded filtration masks through its online marketplaces. China’s anti-pollution market, still dominated by Western brands which control more than half of Chinese market, is heating up, and many budget manufacturers and low-cost producers from Japan and China are now trying to get a slice of it.
Overview of the Anti-pollution Mask Industry in China
The demand volume of masks in China has grown continuously since 2012, and state media estimate the Chinese pollution mask market was worth nearly 4 billion yuan ($600 million) in 2015. Along with the improvement of the living standard of people in urban areas and the rise of the middle-class, people’s awareness of pollution protection is increasing all the time, especially for young children, and will maintain a rapid growth.
China’s mask enterprises are mainly distributed in the eastern region, and Bohai Rim, Yangtze River Delta Region, and Pearl River Delta Region are the major production areas. Shandong province serves as the center of the masks industry in China with another production hub, Dadian, dubbed the “mask village” for producing the cheapest pieces.
There are about 310 mask processing and supporting enterprises in Dadian village, Jiaozhou City of Shandong with an annual production capacity of 1 billion pieces, realizing about CNY 1.2 billion ($174 million) of output value that accounts for more than 32% of market shares nationwide.
Currently, common anti-haze masks widely available in every convenient store are priced at CNY 1 or 2 ($0.15 to 0.40) to CNY 30 or 40 ($4.5 to 5.8), and they are made from cotton yarn, activated carbon, and other materials. Along with the continuous increasing of Chinese residents’ incomes and the improving of people’s living standard, people have a stronger awareness about environment and health. Consumers are willing to pay more to protect themselves from air pollution’s effects, and they look for more comfortable and effective masks, such as Vogmask or Cambridge masks, which generally range in price from CNY 150 to 250 CNY ($22 to 37). To meet growing demand in China, new market entrants like Airinum focus on the high-end market, with stylish design and high-quality replaceable filters.
Common Consumer Psychology
“In China, people just pretend or assume that it is useful. It’s a mass behavior,” indicates Wong Chit Ming, a researcher at Hong Kong University’s school of public health. “You may feel a little better…but there’s no real evidence this might help.”This is a common consumer psychology among the Chinese who are entirely concerned about the threat of air pollution. For him, Chinese people have the impression that this could resolve the problem of air pollution and they should, therefore, do something to protect themselves from the harmful air, which will comfort them in emotion whatever the practical effect.
Style Preferences for the Anti-pollution Mask Industry in China
China Textile Commercial Association officially released ‘the community standards of PM2.5 protective masks’. The standards were implemented on March 1, 2016. Before this date, China had no quality standards for face masks for personal use, and the majority masks available claiming to reduce particulate matter by 99% on the market were not protecting against PM2.5.
At present, the variety of types of anti-dust masks sold both in the online shops and outlets have contributed to the disorder of this market. Those most popular kinds of masks are always those masks which have a relatively simple wearing process. Still, the vast majority of Chinese residents use cheap cotton masks that offer little protection. Also, expensive respirator-style masks aren’t made to fit Chinese anti-pollutions well, according to a study from Daxue Consulting. Even those benefiting from China’s Kou Zhao boom admit that their masks can only do that much.
Except for the most common cotton masks, active carbon mask which can be recycled and its adsorption force stand out amongst the similar products becomes another hot choice in China market. As some researchers analyze, China’s functional mask market has not been arousing general consumption groups’ attention due to its late start. But now it gently stands up on the table.
The future of Anti-pollution Mask Industry in China
There is an increasing demand for both functional and comfortable masks, so much improvement have been achieved in protective measures, what’s more, these functional masks are equipped with high technological contents. Thus additional value increases correspondingly. For example, masks for controlling bacteria and protecting virus should carefully suit with people’s facial form. Obviously, such malignant environment we are living in is difficult to be improved thoroughly in a short time. Therefore mask market appears to surge high unprecedentedly, bringing vigor to the anti-pollution industry.
Many investors have seen this opportunity; it is estimated that the production value of China’s functional mask market will grow up to CNY 10 billion in the next five years.
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Daxue Consulting, Market Intelligence China