Sramana Mitra: Where is your contract manufacturer in the US?
Peter Mann: They’re in Connecticut.
Sramana Mitra: Are you selling the new product in the US only?
Peter Mann: We sell in the US, Canada, and China.
Sramana Mitra: Talk to me more about how come you’re selling it in China and how you’re selling it in China.
Peter Mann: We’ve been getting requests from companies in China to sell our products. They expressed interest in selling America-made products. The air quality there is bad and it’s very well reported on. The EPA has standards for measuring air quality – the air quality index. They measure two different ranges of particulate sizes. Two years ago, the US embassy in Beijing started recording using the same standards to report on daily air quality levels. Before that, it was the Chinese government but there wasn’t a lot of confidence in those numbers. Once they use the EPA metrics, people realize how serious a problem it is. That has driven awareness and huge demands for air purification products as well as higher-end air purifier products.
In the market research report that I read recently, it’s supposed to be doing 34% a year. In a few years, depending upon what research you read, it’s supposed to be between $20 billion and 30 billion in sales. In the US, it’s just a billion dollar market. China is a much bigger market with much more demand. There’re really few products that come close to what we offer. There’s nobody that has the product we have in the US. We started small in China. We sell through distributors.
Sramana Mitra: Are they online distributors or physical distributors?
Peter Mann: Physical distributors who sell primarily to Chinese consumers.
Sramana Mitra: There’s a market developing in China right now where e-commerce companies are being set-up in China. These guys order wholesale from US manufacturers to sell US products into China.
Peter Mann: We are aware of that, but we haven’t signed any deals with those sites to date.
Sramana Mitra: What about other geographies? Obviously, there are several countries where air pollution is a very big problem. The things that drew you to start this company are very big problems in Brazil and India, for example. What are your plans to expand into those countries?
Peter Mann: We are evaluating those markets. I know India, in particular, is similar to China in terms of severity of the problem. The market and the people haven’t gotten to the point where they’re actively looking for products to solve that problem. India will get there but the market today is not there yet, from a demand standpoint. We’re a relatively new company and it’s easier to sell where the demand is than trying to create the demand. It hasn’t really got market acceptance. It’s in the very early adopter stage in those places. We’re very interested in those markets, but the market size is very small at the moment for a higher-end product like ours.