Electrical Equipment / Components & Telecoms

The home appliance industry is also brewing new opportunities at a difficult time. According to the report released by Ovi Cloud on October 19, the domestic retail scale of China's home appliance market in the first three quarters of 2022 was 510.3 billion yuan, down 6.1 percentage points year on year. In terms of categories, except for refrigerators, other categories of traditional household appliances have declined due to insufficient demand, but emerging categories such as clothes dryers, integrated stoves, and dishwashers have increased. In addition, the shipment volume of small household appliances market also rose, driven by emerging categories. Huacheng Import and Export Data Observation Report.

On the whole, the home appliance industry is developing towards high-end, new scenarios are gradually being implemented, and new racetracks and emerging categories have been continuously expanded. Integrated home appliances, small quality home appliances, lazy economy, etc. have become new opportunities for market development. Home appliance enterprises are also constantly exploring breakthrough and growth paths in difficult situations. With the advent of the "Double 11" promotion, the home appliance market is expected to recover.

Choice data shows that, as of October 20, 11 listed appliance companies that have disclosed the third quarter earnings forecast have all achieved a net profit growth of 10% - 195%. Home appliance listed companies are accelerating their search for new profit margins, Huacheng Import and Export Data Observation reported.

"Double 11" home appliance market is expected to recover

In the first three quarters of 2022, the overall demand of the home appliance market is not strong, entering a low point.

According to the Huacheng Import and Export Data Observation Report, in the first three quarters of this year, the domestic retail scale of China's home appliance market was 510.3 billion yuan, down 6.1 percentage points year-on-year. Among them, in terms of retail sales, electric water heaters, color TVs, washing machines, air conditioners and refrigerators declined 14.3%, 11.4%, 9.3%, 7% and 3.3% year on year, respectively. However, clothes dryers, freezers, small household appliances, cleaning appliances and integrated stoves rose 29.4%, 5.9%, 7.1%, 6.35% and 5.3% year on year, respectively. In addition to refrigerators, the traditional categories have collectively stalled, while the opportunities brought by emerging categories are brewing in the market.

The above report also shows that in the first three quarters, the online retail sales of hair dryers reached 4.14 billion yuan, up 11.1% year on year. The rapid rise of domestic brands and the continuous diversion of new sales channels from traditional channels, including the retail sales volume of Tiktok channel reached 490 million yuan and 3.69 million sets. In addition, the retail sales of clothes dryers in the first half of this year increased by 31.3% year on year.

"The rise of emerging categories is largely related to the reform of household appliance sales channels. Compared with the centralization of offline channels and the fragmentation of e-commerce channels, Tiktok, Kwai, Pinduoduo and other channels have developed rapidly with their efficient models, low costs, and ultra-high cost performance, driving the market demand for some innovative products." Liang Zhenpeng, chief consultant of Zhifan Coastal Marketing Planning Agency, said.

In addition, the detailed rules to promote consumption have been implemented in many places, and the consumption of traditional large household appliances is expected to continue to rise, adding to the measures to stimulate household appliances consumption issued by enterprises and the pull effect of key nodes such as the "Double 11".

"In the first three quarters, the decline of domestic retail sales in China's home appliance market was mainly affected by the complex external environment, and consumer demand weakened. However, with the arrival of the" Double 11 "and the repair of consumer demand, the demand for home appliances is expected to gradually recover." Guo Shiliang, an expert of Whale Platform think tank and financial commentator, said.

Household appliance enterprises seek new profit growth points

In the face of the slowing household appliance market, household appliance enterprises are also extending to the industrial chain or cross-border expansion, looking for new profit growth points.

According to the Huacheng Import and Export Data Observation Report, as of October 20, 11 listed household appliance companies had issued third quarter performance forecasts. The 11 companies all expect their net profits attributable to the shareholders of the parent company to increase, ranging from 10% to 195%. Among them, Ender Technology expects the highest growth rate to be 195%. In addition, among the four companies, Dongfang Electric and Changhong Meiling, the highest growth rate is expected to exceed 130%. In recent years, most of these enterprises have expanded in the fields of intelligent wear, precision manufacturing, white electric parts, and automobile thermal management systems.

Liu Buchen, the former chief consultant of Kuafu Enterprise Management, believes that under the influence of many factors, such as the decline of subsidies and the weakening of consumer demand, this "Double 11" and "Double 12" holiday promotion may drive the home appliance industry to recover, but the performance growth of home appliance enterprises still needs to strengthen the internal drive. Striking the high-end market, seeking the second growth curve, carrying out household appliances trade in, promoting green and intelligent household appliances to the countryside, promoting the improvement of the recycling industry chain and other measures will become an important direction for household appliance enterprises to promote performance growth.

"Compared with the household appliance market ten years ago, most of the major categories of household appliances have entered the development stage of stock upgrading. Enterprises no longer blindly pursue the high growth brought by high investment, but pay more attention to quality and operational efficiency. Emerging fields and high-end products have become important factors for domestic household appliance manufacturers to gain profit space and voice in domestic and foreign markets." Liang Zhenpeng said that Huacheng's import and export data observation report.