OSAKA -- Japan's Daikin has kicked off an air conditioning "subscription" service in Africa that let's users turn on the AC -- only on days they need it -- through a smartphone app.
With no need to purchase the machine itself, users pay an initial installation fee of around $77 and roughly $1.40 for a day's use of the cool air. The first African country to receive this new service is Tanzania.
It marks a business model shift for Daikin, which had until now focused primarily on manufacturing and selling the devices. It also marks a push into digital services, an area the Japanese giant sees necessary as it prepares for the entry of Tesla.
"We wanted to try a new operational model," said Taro Mitani, Daikin's head of collaboration with startups. While Africa's demand for air conditioners only accounts for 3% of the world, with only 1% of households equipped with AC units, Daikin sees tremendous growth potential.
The plan is to install 50,000 devices as a first step, in the likes of beauty parlors and restaurants.
China's Midea Group and South Korea's LG Electronics are front-runners in the African market. But while they offer devices at affordable prices, maintenance services are not prevalent on the continent.
Daikin has found that around seven in 10 AC units in Africa were broken and abandoned. The subscription model -- under which Daikin continues to own the devices -- will offer a better alternative, the Japanese company believes.
Daikin has teamed up with Tokyo-based...
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