Hong Kong air conditioners

That's from one of the web newspaper articles this week as Summer is getting closer to us.

A question immediately popped up in my mind: "why does Hong Kong still use traditional aircons whereas some developing countries such as China, Thailand, Malaysia all use the more advanced inverter aircons?"

I am no expert, but found the following:

China and Thailand are the #1 and #2 air-cons exporting countries in the world. Malaysia is in a lower position but still qualified for the top 10. The most expensive component of an air con is the compressor. For compressor exports, still China is the #1 whereas Thailand is in the top 6. In terms of production cost, nowadays, it makes very little difference for a traditional one or inverter (especially for split type) for China & Thailand. These two countries make no more traditional ones for their domestic markets except for international orders.

Pricing: in the old days, a product's price composes of 3 parts: production cost, sales, advertisement, storage and delivery, profit and sundries etc. It could be different nowadays but should not vary too much.

Aircon is an essential commodity in tropical and sub-tropical regions. As aircon is an essential, for bigger profit, cartels formed to dictate the last part of pricing for higher rent (profit). Therefore rousing the public awareness of the classifications of the product (thought media, expert statements, research publications etc.) and then adding on extra rent for those who want to seek the higher class. In a rich/fatty economy like HK, cartels would not just price the inverter at a fair price. They would price the inverter price to the traditional, then add on the extra rent for the inverter. That could be the reason you see them both in the market.

By the same token, the existence of window units in HK is not really the space (because split type aircons have been installed in HK government tiny housing units since the beginning of the millennium), it is there to backing the price of split type aircons. In addition to the machine prices, it is also the ridiculously high costs of the aircon installation.

It is believed the price of aircon sales and installation in Hong Kong is controlled by cartels because cartels know Hong Kong has a huge middle class that can afford. Look around the neighbouring countries, where else you could find similar situation as in Hong Kong.