Lu Xian, President of GiantKONE: Urban Renewal Ignites Retrofit Demand, Elevators Urgently Need to Become "Home Appliances"

 Lu Xian, President of GiantKONE: Urban Renewal Ignites Retrofit Demand, Elevators Urgently Need to Become "Home Appliances"

With the rapid development of China's new urbanization, the elevator market has grown from nothing to maturity, and foreign brands have also grown and prospered in the vast Chinese market.

KONE Group was founded in Finland in 1910 and has a history of more than 110 years. In 1996, KONE Group entered the Chinese market. In 2005, KONE Group and Giant Elevator formed a joint venture, GiantKONE Elevator Co., Ltd. (hereinafter referred to as "GiantKONE"), becoming one of the first foreign elevator brands to establish a joint venture in China. In 2016, GiantKONE became a wholly owned subsidiary of KONE Group.

On the occasion of its 20th anniversary, a reporter from China Business Journal interviewed Lu Xian, President of GiantKONE.

Lu Xian said that China's elevator industry is in an unprecedented period of transformation: on the one hand, under the concept of urban renewal, about 900,000 old elevators in use for more than 15 years have generated huge demand for renovation and retrofit. On the other hand, elevators are one of the key factors in measuring "good housing," and are accelerating their transformation toward intelligence and green development.

"The explosion of renovation and retrofit demand has brought elevators face to face with ordinary consumers (C-end users)." In Lu Xian's view, the perception of "an elevator is a home appliance" should be cultivated, so that elevators are no longer cold machines, but gradually move closer to home appliance products in terms of function, design, and user experience. "Consumers should no longer see elevators as professional special equipment, but as an inseparable part of family life."

New Urbanization Drives the Takeoff of the Elevator Industry

China Business Journal: Over the past 20 years, China's new urbanization has advanced by leaps and bounds. What assistance has this brought to the rapid development of the elevator industry?

Lu Xian: China's new urbanization began in 2000 and entered a period of rapid development starting in 2007, which has been a huge driving force for the development of the elevator industry. On the one hand, many world-renowned elevator brands have established production bases in China; on the other hand, China's elevator industry chain has also become very complete.

I have worked in the elevator industry for more than 20 years, and I have been fortunate to experience the entire industry from its initial starting point to its peak in 2018, and now to its entry into a period of transformation. Although the current real estate market is declining somewhat, China is still the world's largest market for new elevator equipment, with newly installed equipment accounting for more than half of the world's total each year.

China Business Journal: On March 31 this year, the Ministry of Housing and Urban-Rural Development issued the national standard "Code for Residential Projects," expanding the scenario elements for elevator installation. Will this bring new opportunities to elevator companies?

Lu Xian: According to the new regulations, low- and mid-rise residential buildings that previously did not require elevators now need them installed, and those that previously required only one now need two. This is certainly good news for the elevator industry and market.

But we have also noticed that as consumer demand for "good housing" grows, requirements for elevators have also risen. Previously, consumers focused more on whether elevators were sturdy and comfortable to ride, but now they are beginning to require additional functions such as prohibiting electric bikes from entering, as well as intelligent functions such as facial recognition and contactless buttons.

Old Elevator Renovation and Retrofit Spawn Customized Demand

China Business Journal: In 2024, the renovation and retrofit of old residential elevators was included for the first time in the scope of support from ultra-long-term special treasury bond funds. What impact does this have on the development of the elevator industry? What issues should be noted in the elevator renovation and retrofit process?

Lu Xian: The implementation of the national subsidy policy has solved the core problem of old elevator renovation and retrofit—funding. Previously, without the national subsidy, although residents all agreed to replace the elevators, they would hit a wall as soon as it came to how much money to pay and who would take the lead. Therefore, although the capacity of the elevator renovation and retrofit market was increasing in the past, the actual business growth was not as fast as market expectations.

At present, the national subsidy for each old elevator is 100,000 to 150,000 yuan, which is enough to cover the required funds for low-rise buildings. But for mid- and high-rise buildings, this money is far from enough, and residents or owners need to share the funding gap. This is also a major difficulty currently faced in the practice of old elevator renovation and retrofit.

China Business Journal: After years of development, has China's elevator industry gradually entered the aftermarket stage?

Lu Xian: As of the end of 2024, China's stock of elevators has exceeded 11 million units, and more than 900,000 elevators have been in use for more than 15 years.

After experiencing the period of rapid development of urbanization, China will enter a stage of renewing existing old urban buildings for some time to come, so the demand in the elevator aftermarket will also grow, specifically including maintenance, spare parts supply, and component retrofitting.

The 2025 Government Work Report once again mentioned urban renewal, and I believe this will be the source of most of the elevator market's capacity. In addition to direct opportunities for new elevator installation, many old buildings will no longer undergo large-scale demolition and reconstruction under the concept of urban renewal, and the demand for retaining and retrofitting old elevators will grow, bringing elevator companies mixed opportunities.

China Business Journal: In order to vigorously develop the old elevator renovation and retrofit business, what preparations has GiantKONE made from production to R&D?

Lu Xian: Most old elevator renovation and retrofit orders are customized. GiantKONE has specially set up an R&D team focused on retrofit business and launched multiple flexibly configured retrofit solutions; on the sales side, it has brought in employees from engineering and maintenance fields, who can use their professional knowledge to more accurately understand project needs and efficiently advance the implementation of renovation and retrofit solutions.

In the process of elevator renovation and retrofit, we often encounter the problem that some elevators needing retrofitting are of other brands. This requires us not only to be familiar with our own product structures and component designs, but also to consider the design and characteristics of the original brand's elevators.

Elevators Need to Let Consumers "Afford Them and Use Them Well"

China Business Journal: The elevator industry is exploring intelligent and digital development paths. What are the reasons for this transformation? Could you introduce in detail GiantKONE's exploration and practice in these areas?

Lu Xian: As a traditional industry, the elevator industry needs to transform toward green new quality productive forces. KONE Group's development pace has always been highly aligned with China's national strategy, so GiantKONE also began exploring intelligence and digitalization very early.

For example, GiantKONE has connected to KONE Group's "Cloud Butler" system, using AI algorithms to achieve predictive maintenance, provide early warnings, and precisely locate risks, improving operational safety and response efficiency, and profoundly changing the elevator maintenance model.

After the "Cloud Butler" system went online, it sends all basic signals and fault codes of elevators to KONE Group's "cloud," collecting operating information from each elevator at all times. If an elevator shows abnormal signals, it will proactively send instructions to the company and users, and maintenance personnel will proactively visit to inspect.

China Business Journal: The elevator industry has begun to face ordinary consumers directly. How will GiantKONE respond to this change?

Lu Xian: In the past, when the market was dominated by new elevator business, elevator companies mostly faced B-end professional customers, who had their own research and specialized insights into the elevator market and elevator brands.

Now, especially in the old elevator renovation and retrofit business, many customers are ordinary residents, who are largely unfamiliar with elevators.

Based on this, GiantKONE has proposed the concept of elevator "home applianceization" and made some strategic changes in marketing. For example, on Douyin livestreams and Xiaohongshu, staff explain elevator technology in language consumers can understand. In GiantKONE's showroom, users can immersively experience the renewed experience that elevator retrofitting brings to daily life through virtual reality and extended reality technologies.

China Business Journal: GiantKONE has gone through 20 years. What predictions do you have for China's elevator market? What expectations do you have for GiantKONE's future?

Lu Xian: In recent years, Chinese consumers have increasingly trended toward rational consumption. On the one hand, they hope products have very high cost performance; on the other hand, their requirements for quality and functions have also upgraded. Therefore, we need to manufacture elevators for Chinese consumers that they can "afford and use well."

For GiantKONE's future development, it can be summarized in four words: "accurate, fast, intelligent, and adaptive." "Accurate" means adapting to the rapid changes in the Chinese market—whatever the market needs, we manufacture. "Fast" requires that we not only have products, but also respond quickly to changes in market demand. "Intelligent" mainly lies in the fact that the country is promoting the intelligent transformation and upgrading of industries, and consumers increasingly favor intelligent elevator functions. "Adaptive" requires GiantKONE to lead the elevator industry's new quality productive forces and green sustainable development.

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