Electrical Equipment / Components & Telecoms

In 2022, faced with the huge challenges of the external environment, the contraction of domestic demand under the influence of the epidemic, and the unprecedented business pressure brought by the decline of external demand under the global economic recession, China's household appliance enterprises have maintained a stable development pattern through product structure adjustment, comprehensive improvement of quality and efficiency.

With the official implementation of the policy of Class B control of novel coronavirus infection by the state, the China Household Appliance Association predicted that the domestic market was expected to recover significantly in 2023, and the "internal circulation" would vigorously support the development of the household appliance industry in the spring.

Retail sales hit the lowest level in three years, and export growth of international trade weakened

According to the National Bureau of Statistics, from January to November 2022, the main business income of the household appliance industry was 1.58 trillion yuan, up 1.7% year on year. Since 2022, the prices of bulk raw materials used in household appliances have risen rapidly and then fallen back. The prices of copper, aluminum, plastic, cold-rolled sheet and other materials have declined year-on-year, and the pressure on the cost side of household appliance enterprises has eased; The US dollar has appreciated significantly, and the exchange earnings of enterprises are high; At the same time, in order to cope with the adverse business environment, the enterprise has been careful to control all expenses. Benefiting from the above factors, the overall profit of the industry did not decline in 2022.

Although the performance of main business income and profit indicators was basically stable, the decline of several key indicators such as the output of main products, domestic retail sales, and international trade exports reflected the seriousness of the situation. In 2022, the production of household appliances was greatly impacted by the epidemic, the production schedule was unstable, and the output of most products fell, which was a phenomenon not seen for many years. The decline in production reflects the shortage of consumer orders and the continued weakness of the domestic home appliance market. According to the all-channel data of AVC, the overall retail sales volume of China's home appliance market in 2022 was 708.1 billion yuan, down 7.4% year-on-year, the lowest in the past three years.

In 2021, the international trade export of China's home appliances broke through the threshold of 100 billion dollars for the first time, hitting a new record high. In 2022, the global economic recovery will slow down significantly due to multiple factors such as repeated outbreaks, the Russia-Ukraine conflict, high inflation and insufficient demand. In the face of a more complex and uncertain global environment, combined with the impact of a high base, the export pressure of China's home appliance industry rose sharply, and the export growth trend also tended to weaken. According to customs data, the export volume from January to November 2022 was 90.1 billion US dollars, down 5.6%.

Although the growth trend has weakened, according to historical data, the international trade export in 2022 will be the second highest level after 2021. In 2022, the volume of international trade exports of complete electrical appliances will decrease at the same time. In terms of parts and components, the positive growth trend since the third quarter of 2020 has tended to weaken in the past two months, but the overall growth remains double-digit. Since 2022, the export of China's home appliance industry to various countries has shown a trend of differentiation. Under the overall downward trend, the export to ASEAN is outstanding. From January to November, the export volume of Chinese household appliances to ASEAN countries increased by 12.6%, which has been growing at a double-digit rate since the first quarter of 2020, and the growth rate has maintained a leading position in all countries and regions.

Higher growth rate of smart home appliances and continuous recovery of consumption

Although some key indicators have declined, there are still bright spots in industrial development. In 2022, the state issued a series of favorable policies aimed at "stabilizing growth and promoting development" of the household appliance industry. Focusing on "replacing the old with the new" and "green intelligence", household appliance manufacturing and circulation enterprises worked together to promote sales. Some green and intelligent household appliance products grew at a high rate. At the same time, despite the pressure on the market, the product structure has been continuously upgraded, and the consumption trend of health, high-end and systematization has not decreased. In the domestic market, Haier continues to build high-end brand Cassati and scenario-based brand Three-winged Bird, providing important support for its growth throughout the year. In addition to its successful internationalization strategy, Haier Group's global operating income in 2022 will be 350.6 billion yuan, up 5.4%.

During the epidemic, the concept of health was raised to an unprecedented level. In 2022, fresh air air conditioners continue to show strong growth power. Midea, Gree, Haier, TCL, Oxfam, Changhong, Hisense and other mainstream air conditioning brands have launched a new generation of upgraded products, further improving user comfort in terms of fresh air volume, noise, temperature and humidity regulation. All kinds of washing machines, clothes dryers, washing and drying integrated or washing and protecting integrated drum washing machines, mini washing machines, and partitioned multi-cylinder washing machines with the function of health sterilization have become the new driving force to promote the growth of the washing machine market. Refrigerators with large capacity and sterilization function also received much attention during the epidemic.

Dishwashers, clothes dryers, integrated stoves, floor washers and other emerging categories have withstood the impact of the general environment and still maintained growth, becoming the engine of market growth. As a phenomenal household appliance category, intelligent cleaning appliances, after explosive growth in the first two years, are still bright in 2022, although the growth rate slows down. In addition, the personal care, beauty and health products under the "beauty" economy have also attracted a considerable number of buyers.

Household appliance consumption may continue to recover. In 2023, the recovery of the domestic market is more certain. After the first quarter, as the epidemic situation in various regions has reached its peak and social and economic life has become normal, household appliance consumption may show signs of recovery in succession. China Household Appliances Association believes that, on the whole, the support of "internal circulation" will emerge in the future, providing momentum for the sustainable development of the industry.

First of all, from the perspective of industrial structure, considering the high penetration rate of mature household appliance categories in China, as the property cycle attribute of the household appliance industry continues to weaken, the industry demand is more from the stock update, and the growth is mainly from some emerging categories that improve the quality of life through technological innovation. Secondly, with the recovery and improvement of residents' income level, the consumer market will gradually recover, which will have a positive impact on the domestic market. However, considering that the recovery of residents' income will still take some time, the recovery of consumption will be gradual. Third, with the relaxation of the real estate policy, the household appliance industry, as the post-cycle industry of real estate, especially some industries with pre-channel, such as kitchen appliances and bathroom, is expected to enter the improvement channel. In addition, the recovery of the home decoration industry will also drive certain consumption. Compared with domestic sales, the overseas market faces many factors, including high global inflation, declining consumer demand, and the transfer of orders to overseas factories. Therefore, the export market will remain under pressure.