Kone's Thirty Years of Deep Roots in China: Local Manufacturing and Maintenance Network

📌 Background

2026 marks the 30th anniversary of Kone's entry into the Chinese mainland market. The Finnish company established a factory in Kunshan in 1996, and today its Shenzhen Qianhai Southern Headquarters is about to be put into operation, maintaining a high-end position in China's elevator industry. China is Kone's largest single market globally. Facing a downturn in the new elevator market, Kone is relying on local manufacturing and existing maintenance services to hedge against cyclical fluctuations. At the same time, the company continues to invest in low-carbon technologies such as the industry's first carbon-neutral elevator, aligning with China's green building and urban renewal policy directions.

👤 Target Customers

Customers include high-end residential and commercial real estate developers in China, owners of public buildings and infrastructure projects, property management companies, and existing elevator users. Revenue sources are new elevator procurement contracts, as well as maintenance and modernization contracts.

💰 Revenue Streams

1) New elevator sales: Revenue from new elevator sales collected according to procurement contracts, with cumulative shipments in Greater China reaching 1.5 million units; 2) Maintenance subscriptions: Annual maintenance and modernization subscription fees collected, with a maintenance volume of 600,000 units contributing stable recurring revenue. In the first half of 2026, Kone's total orders reached €4.894 billion, a year-on-year increase of 4.2%, and order backlog stood at €9.631 billion (figures from public company releases); 3) Modernization projects: Equipment and installation service fees for old elevator upgrades collected according to modernization contracts; 4) Extended warranty upgrade packages: Annual maintenance upgrade and operation guarantee package fees for older elevators (opportunity item; this revenue has no verifiable public benchmark).

🧮 Cost Structure

Costs primarily include manufacturing and local supply chain expenses at factories such as Kunshan, labor and spare parts inventory across nationwide maintenance outlets, R&D investments, and compliance costs such as carbon-neutral certification.

🛡️ Moat

The moat stems from thirty years of localized manufacturing and supply chain systems, with Yushan Town where the Kunshan factory is located serving as a global elevator production powerhouse; endorsements from high-end brands and Asian Games-level benchmark projects; and being the first to release the industry's first carbon-neutral elevator, possessing a first-mover advantage in low-carbon technology.

🔑 Keys to Success

• Localized manufacturing and continuous winning of high-end project bids
• Conversion and digital connection of the existing maintenance base
• Differentiation through low-carbon and intelligent technologies

⚠️ Risks

• Continued downturn in China's real estate sector compressing new elevator demand
• Intensified price competition from domestic manufacturers
• Foreign M&A and changes in China's market policy environment

🏢 Cases

• In 1996, Kone established a factory in Kunshan, kicking off its layout in mainland China; in 2026, its Shenzhen Qianhai Southern Headquarters is about to be put into operation
• Kone provided elevators, escalators, and maintenance services for the Hangzhou Asian Games, and released the industry's first carbon-neutral elevator in 2023

📊 SWOT Analysis