Midea isn't selling an air conditioner. It's selling a way around the system
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
A couple of days ago I saw Elon Musk reshare something Lee Kuan Yew once said about air conditioning.
Roughly, Lee Kuan Yew's point was that air conditioning was one of humanity's most important inventions, because it made development in the tropics possible.
When I first saw it, I just thought it made a lot of sense. Living in Malaysia, it's hard to imagine working, holding meetings or sleeping without air conditioning. But as I dug deeper, I learned Europe has been hit by a severe heatwave recently, and then I saw that a Midea air conditioner had sold out in Europe. That's when it suddenly hit me that air conditioning might not just be about comfort.
It's really about cities, efficiency, productivity, and even lives.
The unit is called the PortaSplit. Its official price is around 900 euros, yet on the resale market it was flipped for over 2,600 euros, nearly three times the original price. Of more than 1,100 stores in Germany, only a handful still had stock in the end, and some people even drove 200 kilometres to grab the last unit.
It sounds crazy, but the reasons behind it are even more interesting.
Europe isn't short of money. It just can't install
It's not that Europeans can't afford air conditioners. Very often, they simply can't install them.
Average air conditioning penetration in Europe is only about 20%. Germany is under 10%, the UK around 4% to 8%, and some Nordic countries under 2%. Compare that with the US and Japan, where penetration is over 90%.
Why?
Because Europe didn't used to be that hot, so the whole system was never designed around cooling. Homes were built to keep warm, regulations protect how buildings look, you can't just drill holes in old town centres, you can't just hang an outdoor unit, tenants can't just modify their homes, and installation needs a licensed technician.
So the weather has changed, but the system hasn't.
To install an ordinary split air conditioner, you might need municipal approval, agreement from the building owners and permission from your landlord, and then you wait for an installer. The unit itself might cost a few hundred euros, installation over 1,000 euros, or even 2,000 if it's complicated, and you wait four to six weeks. By the time the installer arrives, the heatwave may be over.
The biggest headache in this market isn't a lack of demand. It's that the demand clearly exists, but it's stuck behind installation, regulation, landlords and cost.
Removing the most painful steps
And that's exactly the bottleneck where Midea's PortaSplit broke through.
It does have good specs, of course: 3.5kW of cooling, A++ energy efficiency, around 39 decibels in quiet mode, and it can heat in winter. But if all it had were good specs, it would just be a decent air conditioner, not a phenomenon.
What it really got right was removing the most painful steps for the user altogether.
No drilling through walls, no changes to the facade, no handling refrigerant on site, no waiting for an installer, and you can take it with you when you move.
Now that's interesting.
Many companies build products by competing on specs within the existing rules of the game. Who's cheaper, who's more powerful, who spends more on ads, who has wider distribution.
Midea's air conditioner isn't like that. It doesn't go head to head with European regulations. It redesigns the product so that the actions that would trigger those regulations never happen in the first place.
The law governs drilling holes, so it doesn't drill. The law governs changing exterior walls, so it doesn't change them. The law requires a licence for handling refrigerant, so there's no refrigerant handling on site. Your landlord won't let you modify the flat, so it doesn't touch the flat.
So on the surface it's selling an air conditioner, but what it's really selling is the ability to get around a complicated system.
What I find most worth thinking about in this case is this: many opportunities don't appear where "nobody has done it before". They appear where "everyone knows there's demand, but it keeps getting stuck in the process".
Whoever can shorten that path has a chance to redefine the market.
Often, innovation doesn't mean inventing a brand-new technology. Sometimes the harder innovation is truly understanding the user's living environment, their constraints, why they clearly have a need but still haven't acted, and then using product design to remove those constraints.
Features are written on the spec sheet. Constraints are hidden in everyday life.
What going global really means
From a business point of view, this isn't a small story either. Midea's 2025 revenue was about 456.4 billion yuan, with overseas revenue of about 195.9 billion, or 42.9% of the total. Europe is roughly 26% of its overseas business, which works out to around 50 billion yuan.
In the past, many Chinese appliance makers went overseas as OEMs, manufacturing for other people's brands. But now Midea's own-brand revenue makes up more than 45% of its overseas revenue. That means it's no longer just a Chinese factory. It's starting to enter overseas consumers' minds with its own brands and its own ability to define products.
When people used to talk about going global, many thought it meant translating the manual, changing the packaging and putting it on an overseas platform. That era is slowly passing.
Truly great global expansion isn't moving your product abroad. It's going to the local market, studying people's homes, laws, habits, rental rates and installation restrictions, and then redesigning a product that fits that market.
That's what's interesting about the PortaSplit. It isn't a Chinese bestseller shipped to Europe. Midea first understood Europe's problem, then designed a solution Europeans actually need.
Midea didn't invent summer, and it didn't invent cooling. It simply understood Europeans' pain point, and used a smarter product to release demand that had been stuck behind regulations, landlords, technicians and installation fees.
Sometimes the most impressive innovation isn't making a product flashier. It's taking something users found troublesome, difficult and dreaded, and turning it into something done in three minutes.