BSRIA at the 2019 China Wall Hung Boiler Industry After-sales Service ConventionNovember 2019

On 24th September BSRIA attended the China Wall Hung Boiler Industry After-sales Service Convention and presented their view on the after-sales market potential of “coal-to-gas” projects in China. The event was organized by CGAC (China Quality Supervising and Test Center for Gas Appliances) and was attended by wall-hung boiler manufacturers, distributors, installers and after-sales servicing companies.

The convention aimed to emphasize the importance of after-sales service in the aftermath of large-scale Coal-to-Gas projects, which aim to replace coal stoves with natural gas wall hung boilers. The Coal-to-Gas projects have been initiated and subsidised by local authorities. The programme started in 2015, but the price limitation for boilers installed proved to be a steep barrier for most premium brands. However, unlike the first installation market, the replacement market, in the aftermath of the Coal-to-Gas programme, is open to all market players and is showing great potential for manufacturers.

BSRIA’s representative at the event Cecilia Xu said: “Unlike the mature European wall hung boiler market, China’s wall-hung boiler segment has only developed in the past 25 years. Nobody was fully prepared for the extremely high demand triggered by the Coal-to-Gas programme in 2017, and suddenly wall hung boiler manufacturers had to rush to deliver products on time. Manufacturers and distributors struggled to keep up with market demand and as a result the market was flooded with lower quality products, offering poor after-sales service. Nevertheless, this opens opportunities for market players unable to capitalise on the first installation market. 

Cecilia Xu summarised three specific advantages of the coal-to-gas replacement market: large quantities, quick returns and lack of brand preference. Twelve million units of wall hung boilers were planned to be installed from 2017 to 2021 according to a government document. Although the original plan has been amended during the years, the authorities have not given up in their determination to carry out the Coal-to-Gas projects and the overall “Coal-to-Gas market size” will exceed ten million units by 2021 according to BSRIA’s estimation. The accumulated “Coal-to-Gas wall-hung gas boilers market” will be almost as large as the total regular wall hung gas boilers market in China, which should not be overlooked. Moreover, the Coal-to-Gas market is now dominated by basic products and these are of questionable quality with shorter life and thus, boiler replacement is expected to occur earlier than originally expected. According to BSRIA’s estimation, the replacement market will witness its first peak in 2022 / 2023. 

End-users installing their first boilers usually do not have brand awareness, and most of them barely know what a wall hung boiler is. The market is very fragmented; nearly 200 new brands were registered and participated in the Coal-to-Gas market starting from 2016, according to CGAC’s data. 

BSRIA has paid close attention to the “Coal-to-Gas market” from the beginning and will continue to monitor developments very closely. Although the “Coal-to-Gas market” is surrounded by uncertain policy, it is still very much worthy of manufacturers’ attention.