China Air Conditioner Shipments Drop 25.5%: Distributors Abandon Inventory Buildup

China's household air conditioner market is undergoing a structural shift in the distribution channel: distributors are no longer building up inventory, and the rate of decline in manufacturer shipments significantly outpaces the slowdown in retail sales.

AVC data: shipments and retail diverge

According to AVC PSI monitoring data for Q3 2026, shipments of household air conditioners to China's domestic market totaled 15.96 million units, down 25.5% year on year. Retail sales over the same period fell by 9.4% in volume and 15.9% in value. The gap between the depth of the shipment decline and the retail decline, in the editors' assessment, indicates that the market is not simply "failing to sell" but is actively liquidating previously accumulated warehouse stock, and the pace of manufacturer shipments is slowing in response.

Why the channel is liquidating inventory

Among the factors shaping the current situation, the editors highlight several:

• The effect of the trade-in stimulus program (以旧换新), which previously drove a wave of consumer demand, is gradually fading; new purchases are not compensating for the demand released earlier.
• The ongoing correction in the real estate market: declining sales volumes and fewer new home handovers reduce demand for air conditioners as part of pre-installation packages.
• Consumers have become more sensitive to price, energy efficiency, and actual user experience, which is slowing the pace of fleet replacement.

Under these conditions, distributors prioritize liquidating existing warehouse stock over receiving new batches: inventory represents frozen capital and operational risk.

Manufacturer and distributor: different priorities

For manufacturers, shipment volume determines the production plan and business scale. For distributors, the key metric is inventory turnover speed and margin preservation. In a fiercely competitive brand landscape, purchasing at inflated prices creates risk: subsequent retail price cuts compress the margin on already-purchased stock.

The channel structure is also shifting: traditional large retail chains and specialized e-commerce platforms continue to liquidate their high baseline inventory, while fragmented channels (Douyin, Pinduoduo) show growth, but a significant share of that growth falls in the budget segment. Manufacturers must simultaneously manage volumes, channel price balance, and distributor margins.

From competing for volume to competing for shelf space

The editorial team of Refrigeration Express (制冷快报) notes that the market is transitioning from a growth-based model to a model of competition for existing demand. Growth driven by scaling and "pushing" product into the channel is giving way to growth through product differentiation, channel digitalization, and after-sales service quality. Manufacturers need to adjust production and shipment rhythms based on actual retail data rather than planned volumes.

For distributors, the priority becomes reducing warehouse risk and improving capital turnover. Demand for air conditioners has not disappeared, but the form of its release is changing: when a distributor stops buying "for the warehouse," the manufacturer has to restructure its entire logistics to match the new channel rhythm.

Sources: AVC PSI monitoring data, industry analysis by China Home Appliance Network (中国家电网). Data is as of Q3 2026. Material prepared by the editorial team of Refrigeration Express (制冷快报), author — Yang Su (杨素).