Air pollution in China has become one of the most intensely discussed livelihood issues that the 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 of 7.3 times above the WHO’s recommended safe levels.
At the same time, in the context of environmental issues, the rapid rise of the 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 new 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 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 more than 300 mask processing and supporting enterprises in Dadian village, Jiaozhou City of Shandong with an annual production capacity of nearly 1 billion pieces, realizing about CNY 1.1 billion ($160 million) of output value that accounts for more than 80% of market shares nationwide (data based in 2017).
Currently, common anti-haze masks widely available in every convenient store are priced at CNY less than 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 improvement of people’s living standard, people have a stronger awareness about the 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 120 to 245 CNY ($19 to 37, based on 2019 Tmall/Taobao prices and currency exchange rates). 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 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.
Division of Chinese Mask market
Simple market research shows that on Taobao/Tmall, the top-selling mask brands are replicas of each other. Top brands sold in Dec 2018 to Jan 2019 are listed in the table below:
|Mask brands||Monthly sales|
These brands and their products are the same in almost all aspects including materials, designs, promotional strategies, pictures used online and textual description. It is very likely that these masks are produced by the same producer. However, there is no trace showing the actual manufacturer of the products, and thus unable to identify whether the domestic mask product is highly concentrated or not.
Based on another market research article, the overall mask market in China is mostly controlled by the international giants 3M, which occupies almost 90% of all the market share, followed by Honeywell and Ludun 绿盾 with less than 5% respectively. Other brands such as Uvex and Hakugen have a non-significant market segment of less than 1% respectively.
To be noted that, among all these brands, only Ludun 绿盾 is produced by Chinese domestic company Sinotextiles Corporation Limited, other brands are all international based.
Another market analysis renders different views on the masks industry in China. According to a market report, there are four major domestic mask producers owning 7 major brands. The largest domestic mask manufacturer is Shanghai Dragon Corporation 上海龙头股份 (market share 6.52% with 2 brands) followed by Shanghai MNP Inc 上海美科 (market share 7.14% with 3 brands), Teda Tianjin 天津泰达 (market share 5.90% with 1 brand) and Dongguan Rongxin 东莞容鑫防静电技术 (market share 1.00% with 1 brand) in a descending order.
The future of the Anti-pollution Mask Industry in China
There is an increasing demand for both functional and comfortable masks, so much improvement has 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 a 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.
New market studies in late 2018 found that ‘intellectual’ masks are now more welcomed than traditional anti-pollution masks. Now major mask buyers in China not only consider the function of anti-pollution but want to buy more ‘intellectually’ equipped masks. With some AI microchips implanted into masks, those new products can both monitor the anti-pollution function and other rates affecting human body performances including heart rates, air pressure, humidity and other air-related live data. Some other products even developed a replaceable filter with AI function, and these products are more like sports equipment than simply anti-pollution masks. Their filters can be replaced to imitate different air pressure level and add on training difficulties when people try to exercise under a thin-air condition and to improve cardio abilities. Most buyers of this new type of AI-based masks are female, and 53% of the buyers are less than 30.
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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