Small Appliances High-growth Brakes: A Temporary Decline
With huge profits and a broad market, the small household electrical appliance industry was considered as a home appliance gold mine two years ago. However, since the second half of last year, the growth rate of this industry has begun to slow down, and some deep-seated problems have begun to escalate. What happened to the small home appliance industry, is it experiencing a phased growth obstacle or is it nearly a year?
Misadjusted temporary recession
Small home appliances industry slowed down. According to statistics released recently by the China Business Information Center, the retail sales of small household appliances such as vacuum cleaners, microwave ovens and induction cookers began to show negative growth. National Bureau of Statistics data also showed that the growth rate of home appliance production began to slow or even decline in the second half of last year. The growth rate of product growth was only single-digit, the output of electric fans increased by 10%, the vacuum cleaners increased by 3%, and rice cookers increased by 7%. , The output of electrothermal roasting appliances decreased by 4%, and that of hot and cold water dispensers decreased by 2%.
Although the 2011 annual report of domestic small household appliances enterprises has not been released yet, the signs of recession in the industry have already appeared. It can be seen from the performance trend of the domestic leading soybean milk machine company, Jiuyang, and the layoffs of the US-based NEC Group. Jiuyang's 2011 third quarterly report showed that the company’s total revenue was 1.41 billion yuan, a year-on-year decline of 11.35%, and net profit attributable to shareholders of listed companies was 175 million yuan, down 9.2% year-on-year. As for the reasons for the change in performance, Nine Yang said that the slowdown in the growth rate of the small home appliance industry and the new business such as clean water have not been made. However, in fact, since 2006, the performance of Jiuyang has clearly emerged as a parabola with high and low prices. Its 2006-2010 net profit growth rate was 13.66%, 736.84%, 71.71%, 13.32%, and -3.09%, respectively. .
In addition, the sales revenue of Midea Group, the leading domestic small home appliance company, also began to decline. In 2010, sales revenue exceeded 30 billion yuan, a growth rate of nearly 30%. However, the growth rate in the second half of last year dropped back to about 10%. At the end of last year, the US-based NEC Group began drastically layoffs. The company's NEC has been streamlined from the original 60-plus joint-venture sales subsidiaries to 11 companies, and the remaining institutions have been partially consolidated into 50 divisions. In addition, some small sales subsidiaries have reduced the number of people by 20-30, while large sales branches have reduced the number of people by 40-50.
For such a change, Fang Hongbo, chairman of Midea’s electrical appliances, told the media that some of America’s sales companies are actually shrinking in order to cope with the external environment, and the personnel tightening is also for the winter.
In fact, not only the United States and the Nikken Group waved layoffs. According to industry sources, the layoffs involved almost all the small household electrical appliance companies. “Only other companies have not been such a big fan of the Nikkei, and there is no such concern for the NEC Group.†According to industry sources, Ningbo, Zhejiang, Shunde, Guangdong, and Qingdao, Shandong, the three major townships of small household appliance industries all began to significantly reduce the proportion of labor, all the signs that the development of small household appliances industry began to enter recession.
Once in a timeless scenery
In recent years, due to the rapid replacement of small household appliances and large profit margins (up to 50% in profits, much higher than color TVs, refrigerators, and other home appliances), more and more home appliance companies have entered. In addition, according to the “China Consumer Electronics Market Survey Reportâ€, there are about 40 small household appliances in each household in Europe and the United States, while in China, there are less than 10 household appliances in each household, which has huge market potential and attracts A lot of money went into the small household appliance industry.
Since 2005, Galanz has expanded its business from microwave ovens to induction cookers, electric kettles, water purifiers and many other business segments to establish the Small Appliances Division. Hisense and Haier have also invested heavily in the field of small household appliances. In October 2010, Midea Group, the second largest industrial group of Midea Group, was formally established. The small home appliances business group started with electric fans and rice cookers began to appear as a group army, highlighting this domestic comprehensive household appliance company. The importance of small household appliances industry. Foreign-funded enterprises also scrambled to enter the market first, and through acquisitions, they “locked up†the Chinese market. For example, the French SEB acquired Supor and the Dutch Philips negotiated the purchase of Pentium.
"The strength of the domestic and foreign-funded enterprises proves that the international home appliance giant is very optimistic about the future prospects of the small household appliance market in China," said home appliance analyst Liang Zhenpeng. Xu Dongsheng, general secretary of the Household Electrical Appliance Industry Association, said: “Over the past few years, we have just taken advantage of the favorable factors such as the transfer of global manufacturing industries to China and the accelerating pace of urbanization in China. The home appliance market has also been stimulated by national policies, and the entire industry has developed rapidly. Businesses see opportunities, quickly enter the industry, and get explosive growth."
In addition, in recent years, the overall manufacturing level of China's small household electrical appliance industry has increased, coupled with the continuous growth of China's domestic demand market, consumers are paying more attention to the pursuit of quality of life, which also accelerates the penetration rate of small household appliances.
Induced export shrinkage
China's small home appliances industry accounts for a very large proportion of exports, such as South America represented by Brazil, Eastern Europe represented by Russia, South Asia represented by India, and African countries. These countries and regions have become the major markets for the growth of China’s home appliance exporters. Therefore, the slowdown in the growth of the small home appliance industry cannot be separated from the impact of the entire macroeconomic situation.
The economic slowdown in developed countries, political turmoil in the Middle East, and the debt crisis in Europe have increased global economic uncertainty, coupled with high manufacturing and trade costs such as exchange rates and raw materials, which have caused heavy losses in exports of small household appliances. According to the online data of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, the export volume of microwave ovens in the fourth quarter of 2011 increased by only about 15% year-on-year.
In addition, the small home appliance industry and home appliances are different, the family's increasing demand for small appliances is to improve the demand for sexual life, the economic situation is not good, the purchasing power of residents is declining, is bound to reduce the domestic small household appliances to improve the type of purchase needs.
However, Jiang Feng, chairman of the China Household Electrical Appliances Association, pointed out that during the “Eleventh Five-Year Plan†period, China’s small household appliances maintained a share of around 60% in the global export market, and China has become the world’s leading producer of small household appliances. During the "Twelfth Five-Year Plan" period, with the improvement of people's living standards, the domestic small household appliances market will usher in a greater consumption space.
The pain of transformation after high growth
In addition to external factors, small household appliances companies are also faced with bottlenecks in their development and encounter challenges in their lives.
Taking the example of a professional small household electrical appliance enterprise, in 2008, 9 Yang Soymilk makers accounted for more than 90% of the market's share. But two years later, Group Appliances Corporation rushed to steal 30% of market share from Jiuyang. Haier relied on the advantages of the group to rush into the small appliance industry.
In this regard, home appliance analyst Liu Buchen said that the United States, Haier, such a hundred billion level home appliance companies rely on the scale of production and sales and the joint operation of the Division's advantages, to expand, it will indeed impact on domestic small household electrical appliances companies, but also eat food Jiuyang, Supor, Pentium and other small household electrical appliance companies have a lot of market share.
In fact, with the increase of competitors and the rapid development period of the small household appliance industry, problems such as serious homogeneity, lack of standards, and non-standard industries have also been exposed. A senior industry source pointed out that professional small household electrical appliance enterprises can hardly maintain their outshining status in the diversified development of the home appliance industry. If these companies want to seek greater development, they must “backwards on the big treeâ€, otherwise the market share will be Will be eaten quickly.
As for the crisis in the United States, the insiders of the United States have repeatedly stressed that "transition and upgrading", that is, from the first increase in scale to the simultaneous development of scale and profit. Liang Zhenpeng pointed out that in recent years, the rapid development of the United States has developed into a hundred billion empire in a few short years. Before 2010, the United States has always advocated maintaining growth, adjusting the structure, and increasing profits. Now it is paying more attention to the latter two. It is precisely because of this, only this time the personnel reduction, "This is the pain of the transition after high growth."
In fact, the number of enterprises in the small household appliances industry is now too high, and the survival of the fittest is the law of the market. In addition, there are obvious cyclical changes in the household appliance industry. After rapid development every few years, there will always be a period of slow development in one or two years. During this period, there will be survival of the fittest, companies will fall behind, and industries will shuffle.
From heavy manufacturing to heavy brands
Many small home appliances companies in China started as OEMs or OEMs. However, under the influence of the financial crisis, the OEM strategy appeared to be “unreliableâ€. The reporter learned that many enterprises with sales volume below 400 million yuan have turned from failures to conversions, resources have been further concentrated, and the transformation of small household appliances companies has accelerated. Last April, Aisida, a kitchenware company, acquired BBK to create a dual-track model of “kitchenware + small household appliancesâ€. Pang Guangshun, general manager of Dongling Domestic Marketing, a well-known small household appliance brand, also recently stated that in order to achieve the transition to a higher-level OBM (owner-operated factory-owned brand) model, Dongling recently adjusted its domestic sales strategy. Coincidentally, in view of the drawbacks of simple OEMs, Zhuhai BDO Runda Company, which also started with OEM, also proposed a "transition domestic market" strategy as early as in 2008.
Luo Qingqi, chief consultant of Pare Consultancy, believes that some small home appliance companies are gradually making strategic adjustments to get rid of low-cost dependency and to get rid of the passive situation that has long been at the end of the international industrial chain. This will become a trend in the future. An industry expert who declined to be named pointed out that these companies want to make a transition, but they will encounter funding problems. Under such circumstances, the introduction of strategic partners and the introduction of venture capital will become future integration methods.
The consolidation of China's small household appliances industry will intensify almost the consensus in the industry. The industry believes that the industry trend is difficult to change in the short term, but small appliances should strengthen its own brand building. According to data from the China Mechatronics Import and Export Association, among the eight indicators of the export prosperity index in the fourth quarter of 2011, the “manufacturing cost improvement†and “private brand ratio†were in the “somewhat poor†range, with the “proportion of private brands†being the lowest. ; Other indicators maintain the "general" range. The low proportion of own-brand brands is still the weakness of Chinese manufacturing companies, and most companies still remain in the OEM model. Chinese home appliance companies should realize the importance of self-owned brand promotion, from heavy manufacturing to heavy brands, and increase product development efforts. However, brand building, promotion, and channel influence are not instantaneous, they need to be done overnight, and require long-term and unremitting efforts.
Technological innovation is the way out
The user experience of small home appliances is of utmost importance. This reporter interviewed dozens of consumers randomly. They all stated that many small home appliances still have some flaws in their design and function.
In the case of the most common household products such as soybean milk makers and food processors, many consumers believe that the effect of juicing and soda milk is really good, but the product is very cumbersome to clean. For example, it is very difficult to brush the filter and the sharpness of the head is very easy to hurt. Hand. Dishwashers have been criticized by many consumers. They believe that dishwashers can wash dishes, but that consumers are still more troublesome than washing dishes.
In this regard, an industry source said that some foreign-funded enterprises in the industrial design of small household electrical appliances invested a lot of money each year, while domestic companies have little attention to industrial design, many home appliances have design flaws.
Ren Xuwei, president of the China Household Electrical Appliances Research Institute, said that industrial design has decided a way out. Chinese home appliance companies must participate in the global appliance market and must devote more energy to independent innovation. Therefore, high value-added technological innovation and self-owned brands have also become the two core labels for “Creation in Chinaâ€. China's home appliance companies must innovate in terms of product technology, quality, appearance, sales, and management, and continue to create new, unusual, special, and fast small home appliances.
In addition, due to the low barriers to entry, complaints about small household appliances have been persistently high in recent years, and the growth rate of consumer complaints has exceeded 40%, which has greatly affected the industry reputation of small household appliances in China. “To manage this chaotic situation, in addition to relying on fierce market competition, it is to standardize the market with industry standards.†Chen Gang, deputy secretary-general of the China Household Electrical Appliances Association, introduced to the reporter that the Home Appliances Association has established joint induction cookers and pressure cookers with Midea and Supor. Industry standards, "Our industry standards will not be too high, 1/3 of the companies are very easy to achieve, 1/3 of the companies strive to achieve, and the remaining 1/3 can only be eliminated."
Misadjusted temporary recession
Small home appliances industry slowed down. According to statistics released recently by the China Business Information Center, the retail sales of small household appliances such as vacuum cleaners, microwave ovens and induction cookers began to show negative growth. National Bureau of Statistics data also showed that the growth rate of home appliance production began to slow or even decline in the second half of last year. The growth rate of product growth was only single-digit, the output of electric fans increased by 10%, the vacuum cleaners increased by 3%, and rice cookers increased by 7%. , The output of electrothermal roasting appliances decreased by 4%, and that of hot and cold water dispensers decreased by 2%.
Although the 2011 annual report of domestic small household appliances enterprises has not been released yet, the signs of recession in the industry have already appeared. It can be seen from the performance trend of the domestic leading soybean milk machine company, Jiuyang, and the layoffs of the US-based NEC Group. Jiuyang's 2011 third quarterly report showed that the company’s total revenue was 1.41 billion yuan, a year-on-year decline of 11.35%, and net profit attributable to shareholders of listed companies was 175 million yuan, down 9.2% year-on-year. As for the reasons for the change in performance, Nine Yang said that the slowdown in the growth rate of the small home appliance industry and the new business such as clean water have not been made. However, in fact, since 2006, the performance of Jiuyang has clearly emerged as a parabola with high and low prices. Its 2006-2010 net profit growth rate was 13.66%, 736.84%, 71.71%, 13.32%, and -3.09%, respectively. .
In addition, the sales revenue of Midea Group, the leading domestic small home appliance company, also began to decline. In 2010, sales revenue exceeded 30 billion yuan, a growth rate of nearly 30%. However, the growth rate in the second half of last year dropped back to about 10%. At the end of last year, the US-based NEC Group began drastically layoffs. The company's NEC has been streamlined from the original 60-plus joint-venture sales subsidiaries to 11 companies, and the remaining institutions have been partially consolidated into 50 divisions. In addition, some small sales subsidiaries have reduced the number of people by 20-30, while large sales branches have reduced the number of people by 40-50.
For such a change, Fang Hongbo, chairman of Midea’s electrical appliances, told the media that some of America’s sales companies are actually shrinking in order to cope with the external environment, and the personnel tightening is also for the winter.
In fact, not only the United States and the Nikken Group waved layoffs. According to industry sources, the layoffs involved almost all the small household electrical appliance companies. “Only other companies have not been such a big fan of the Nikkei, and there is no such concern for the NEC Group.†According to industry sources, Ningbo, Zhejiang, Shunde, Guangdong, and Qingdao, Shandong, the three major townships of small household appliance industries all began to significantly reduce the proportion of labor, all the signs that the development of small household appliances industry began to enter recession.
Once in a timeless scenery
In recent years, due to the rapid replacement of small household appliances and large profit margins (up to 50% in profits, much higher than color TVs, refrigerators, and other home appliances), more and more home appliance companies have entered. In addition, according to the “China Consumer Electronics Market Survey Reportâ€, there are about 40 small household appliances in each household in Europe and the United States, while in China, there are less than 10 household appliances in each household, which has huge market potential and attracts A lot of money went into the small household appliance industry.
Since 2005, Galanz has expanded its business from microwave ovens to induction cookers, electric kettles, water purifiers and many other business segments to establish the Small Appliances Division. Hisense and Haier have also invested heavily in the field of small household appliances. In October 2010, Midea Group, the second largest industrial group of Midea Group, was formally established. The small home appliances business group started with electric fans and rice cookers began to appear as a group army, highlighting this domestic comprehensive household appliance company. The importance of small household appliances industry. Foreign-funded enterprises also scrambled to enter the market first, and through acquisitions, they “locked up†the Chinese market. For example, the French SEB acquired Supor and the Dutch Philips negotiated the purchase of Pentium.
"The strength of the domestic and foreign-funded enterprises proves that the international home appliance giant is very optimistic about the future prospects of the small household appliance market in China," said home appliance analyst Liang Zhenpeng. Xu Dongsheng, general secretary of the Household Electrical Appliance Industry Association, said: “Over the past few years, we have just taken advantage of the favorable factors such as the transfer of global manufacturing industries to China and the accelerating pace of urbanization in China. The home appliance market has also been stimulated by national policies, and the entire industry has developed rapidly. Businesses see opportunities, quickly enter the industry, and get explosive growth."
In addition, in recent years, the overall manufacturing level of China's small household electrical appliance industry has increased, coupled with the continuous growth of China's domestic demand market, consumers are paying more attention to the pursuit of quality of life, which also accelerates the penetration rate of small household appliances.
Induced export shrinkage
China's small home appliances industry accounts for a very large proportion of exports, such as South America represented by Brazil, Eastern Europe represented by Russia, South Asia represented by India, and African countries. These countries and regions have become the major markets for the growth of China’s home appliance exporters. Therefore, the slowdown in the growth of the small home appliance industry cannot be separated from the impact of the entire macroeconomic situation.
The economic slowdown in developed countries, political turmoil in the Middle East, and the debt crisis in Europe have increased global economic uncertainty, coupled with high manufacturing and trade costs such as exchange rates and raw materials, which have caused heavy losses in exports of small household appliances. According to the online data of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, the export volume of microwave ovens in the fourth quarter of 2011 increased by only about 15% year-on-year.
In addition, the small home appliance industry and home appliances are different, the family's increasing demand for small appliances is to improve the demand for sexual life, the economic situation is not good, the purchasing power of residents is declining, is bound to reduce the domestic small household appliances to improve the type of purchase needs.
However, Jiang Feng, chairman of the China Household Electrical Appliances Association, pointed out that during the “Eleventh Five-Year Plan†period, China’s small household appliances maintained a share of around 60% in the global export market, and China has become the world’s leading producer of small household appliances. During the "Twelfth Five-Year Plan" period, with the improvement of people's living standards, the domestic small household appliances market will usher in a greater consumption space.
The pain of transformation after high growth
In addition to external factors, small household appliances companies are also faced with bottlenecks in their development and encounter challenges in their lives.
Taking the example of a professional small household electrical appliance enterprise, in 2008, 9 Yang Soymilk makers accounted for more than 90% of the market's share. But two years later, Group Appliances Corporation rushed to steal 30% of market share from Jiuyang. Haier relied on the advantages of the group to rush into the small appliance industry.
In this regard, home appliance analyst Liu Buchen said that the United States, Haier, such a hundred billion level home appliance companies rely on the scale of production and sales and the joint operation of the Division's advantages, to expand, it will indeed impact on domestic small household electrical appliances companies, but also eat food Jiuyang, Supor, Pentium and other small household electrical appliance companies have a lot of market share.
In fact, with the increase of competitors and the rapid development period of the small household appliance industry, problems such as serious homogeneity, lack of standards, and non-standard industries have also been exposed. A senior industry source pointed out that professional small household electrical appliance enterprises can hardly maintain their outshining status in the diversified development of the home appliance industry. If these companies want to seek greater development, they must “backwards on the big treeâ€, otherwise the market share will be Will be eaten quickly.
As for the crisis in the United States, the insiders of the United States have repeatedly stressed that "transition and upgrading", that is, from the first increase in scale to the simultaneous development of scale and profit. Liang Zhenpeng pointed out that in recent years, the rapid development of the United States has developed into a hundred billion empire in a few short years. Before 2010, the United States has always advocated maintaining growth, adjusting the structure, and increasing profits. Now it is paying more attention to the latter two. It is precisely because of this, only this time the personnel reduction, "This is the pain of the transition after high growth."
In fact, the number of enterprises in the small household appliances industry is now too high, and the survival of the fittest is the law of the market. In addition, there are obvious cyclical changes in the household appliance industry. After rapid development every few years, there will always be a period of slow development in one or two years. During this period, there will be survival of the fittest, companies will fall behind, and industries will shuffle.
From heavy manufacturing to heavy brands
Many small home appliances companies in China started as OEMs or OEMs. However, under the influence of the financial crisis, the OEM strategy appeared to be “unreliableâ€. The reporter learned that many enterprises with sales volume below 400 million yuan have turned from failures to conversions, resources have been further concentrated, and the transformation of small household appliances companies has accelerated. Last April, Aisida, a kitchenware company, acquired BBK to create a dual-track model of “kitchenware + small household appliancesâ€. Pang Guangshun, general manager of Dongling Domestic Marketing, a well-known small household appliance brand, also recently stated that in order to achieve the transition to a higher-level OBM (owner-operated factory-owned brand) model, Dongling recently adjusted its domestic sales strategy. Coincidentally, in view of the drawbacks of simple OEMs, Zhuhai BDO Runda Company, which also started with OEM, also proposed a "transition domestic market" strategy as early as in 2008.
Luo Qingqi, chief consultant of Pare Consultancy, believes that some small home appliance companies are gradually making strategic adjustments to get rid of low-cost dependency and to get rid of the passive situation that has long been at the end of the international industrial chain. This will become a trend in the future. An industry expert who declined to be named pointed out that these companies want to make a transition, but they will encounter funding problems. Under such circumstances, the introduction of strategic partners and the introduction of venture capital will become future integration methods.
The consolidation of China's small household appliances industry will intensify almost the consensus in the industry. The industry believes that the industry trend is difficult to change in the short term, but small appliances should strengthen its own brand building. According to data from the China Mechatronics Import and Export Association, among the eight indicators of the export prosperity index in the fourth quarter of 2011, the “manufacturing cost improvement†and “private brand ratio†were in the “somewhat poor†range, with the “proportion of private brands†being the lowest. ; Other indicators maintain the "general" range. The low proportion of own-brand brands is still the weakness of Chinese manufacturing companies, and most companies still remain in the OEM model. Chinese home appliance companies should realize the importance of self-owned brand promotion, from heavy manufacturing to heavy brands, and increase product development efforts. However, brand building, promotion, and channel influence are not instantaneous, they need to be done overnight, and require long-term and unremitting efforts.
Technological innovation is the way out
The user experience of small home appliances is of utmost importance. This reporter interviewed dozens of consumers randomly. They all stated that many small home appliances still have some flaws in their design and function.
In the case of the most common household products such as soybean milk makers and food processors, many consumers believe that the effect of juicing and soda milk is really good, but the product is very cumbersome to clean. For example, it is very difficult to brush the filter and the sharpness of the head is very easy to hurt. Hand. Dishwashers have been criticized by many consumers. They believe that dishwashers can wash dishes, but that consumers are still more troublesome than washing dishes.
In this regard, an industry source said that some foreign-funded enterprises in the industrial design of small household electrical appliances invested a lot of money each year, while domestic companies have little attention to industrial design, many home appliances have design flaws.
Ren Xuwei, president of the China Household Electrical Appliances Research Institute, said that industrial design has decided a way out. Chinese home appliance companies must participate in the global appliance market and must devote more energy to independent innovation. Therefore, high value-added technological innovation and self-owned brands have also become the two core labels for “Creation in Chinaâ€. China's home appliance companies must innovate in terms of product technology, quality, appearance, sales, and management, and continue to create new, unusual, special, and fast small home appliances.
In addition, due to the low barriers to entry, complaints about small household appliances have been persistently high in recent years, and the growth rate of consumer complaints has exceeded 40%, which has greatly affected the industry reputation of small household appliances in China. “To manage this chaotic situation, in addition to relying on fierce market competition, it is to standardize the market with industry standards.†Chen Gang, deputy secretary-general of the China Household Electrical Appliances Association, introduced to the reporter that the Home Appliances Association has established joint induction cookers and pressure cookers with Midea and Supor. Industry standards, "Our industry standards will not be too high, 1/3 of the companies are very easy to achieve, 1/3 of the companies strive to achieve, and the remaining 1/3 can only be eliminated."
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