The Future of China's Household Appliances Export: surpassing the Price War

SMM News: in the past year or two, due to trade frictions and other reasons, the relocation of the home appliance industry has been a hot topic. For some household appliances affected by foreign tariff barriers, relevant manufacturers are actively trying to lay out overseas production bases in Vietnam, Indonesia and other Southeast Asian countries and India. However, after the test of the epidemic this year, both foreign brands and domestic home appliance enterprises have stronger confidence in China's home appliance industry chain.

The factory-based engineer of the above-mentioned US brand Newell in China said that last year, they all tested the possibility of building a "backup" base for the export of small household appliances in Indonesia, Vietnam, Turkey and other countries, and tested in various aspects, and concluded that it was never as mature as China's industrial chain. Although some overseas assembly bases have been piloted, the overall transfer of the industrial chain is not easy.

Xinbao has some cooperative enterprises in Indonesia and Malaysia, mainly doing product assembly, technology, marketing and supply chain supporting are still in China. Because a small household appliance needs at least 10 to 20 accessories, such as kettle heating pipe, thermostat and so on, China has a perfect supply chain, and the supply chain cannot be transferred for three or five years. Therefore, at present, China still has 80 to 90% of the global production capacity of small household appliances.

After China has effectively brought the epidemic under control, foreign brands and channels have been more determined to hand over orders to Chinese home appliance manufacturers. Zhou Nan, secretary-general of the Home Appliances Branch of the China Mechanical and Electrical Import and Export Chamber of Commerce, said that China's home appliance exports bucked the trend in the first three quarters of According to statistics from the Chinese Customs, China's exports of household appliances from January to September this year totaled 46.25 billion US dollars, an increase of 14.2 percent over the same period last year.

At the beginning of the epidemic, the export of household appliances was seriously affected. However, with the resumption of work and production, China, the world's largest home appliance supply base, began a rapid recovery in capacity in March, with a backlog of orders driving the vast majority of home appliance factories to work in March and April. In May, the epidemic spread around the world and exports fell briefly. Since June, with the normalization of the global epidemic, the advantages of China's supply chain have emerged, and orders mainly come from markets such as Europe and the United States.

Zhou Nan said that at present, most domestic household appliance enterprises have sufficient orders to ensure full production before the Spring Festival next year. In some enterprises, the delivery time of refrigerators has reached 180 days, and that of freezers has reached 90 days.

According to data from industry online, a research institution, the output of household air conditioners in China in September was 10.354 million, an increase of 4.7% over the same period last year, and sales of 10.1954 million units, an increase of 5.0% over the same period last year, of which 3.54 million units were exported, an increase of 16.5% over the same period last year, maintaining a good growth trend. Order production in North America started in September, with more orders than in the same period last year. The uncertainty of overseas outbreaks has led to a surge in exports.

In September, China produced 8.276 million refrigerators, up 26.1 percent from the same period last year; sales were 8.226 million, up 27.9 percent from the same period last year, of which 4.368 million were exported, up 57.1 percent from the same period last year. Due to the repeated effects of the epidemic, overseas supply chains are still facing challenges, and the recovery of factory capacity in various countries has slightly improved, but it is still not very satisfactory, resulting in China's refrigerator exports continue to grow at a high speed, but spare parts exports are also affected.

China produced 6.403 million washing machines in September, up 5.5 percent from the same month last year; sales were 6.411 million, up 7.6 percent from the same period last year, of which 2.059 million were exported, up 15 percent from the same period last year. This is the first time that monthly exports of washing machines have exceeded 2 million this year. The epidemic situation in China is relatively stable, while markets such as the United States and Europe are suffering from a second wave of outbreaks. Countries import washing machines from China to address the current supply gap.

What is worth paying attention to is that the export of Chinese household appliances is no longer fighting a price war, but striving to establish the competitiveness of technology and design. Galanz's open source chip production base started this year, and Tang Tianshen, a former executive vice president of SMIC, was appointed as the CEO of Yuefang Technology. Hu Ziqiang, vice president and CTO of Midea, believes that the model of global capital, R & D export and local manufacturing "will develop better in the future."

Delma is not a typical small household appliance export enterprise, accounting for about 20% of export revenue, but this year, exports of small household appliances such as humidifiers and vacuum cleaners have increased by 600% compared with the same period last year. Li Junwei, vice president of Delma Electric Appliances, said that due to design innovation, product premium has been able to cover rising costs, such as folding kettle and steam mop, and the improved layout of the Southeast Asian market has also contributed to export growth.

At 7: 00 p.m. on November 3, the factory was still brightly lit, and the production line was in a hurry to complete the order. small household appliances waiting for delivery were stacked on the large open space in the doorway, and the domestic "double 11" e-commerce season and export orders skyrocketed. The warehouse can no longer accommodate it. "the goods are usually delivered until one or two o'clock in the morning." Li Junwei said.

The world is still in the stage of fighting the epidemic, and home appliance exporters in Zhongshan, Shunde, have stepped up the expansion of cross-border e-commerce and overseas e-commerce live streaming business this year. In the future, new products, new channels and new models will make the globalization of China's home appliance industry to a new level.