This article **China Household Electrical Appliances Association
Blooming with brilliance, the rivers of time flowing. Say goodbye to the cold of winter, we are about to usher in a new year. At the dawn of the Jiachen year, we review the development process of China's home appliance industry in 2023 and look forward to a new journey in 2024.
In 2023, China's economy will be in a period of recovery and upward recovery with post-epidemic recovery and policy efforts. In the first half of the year, China's residents' travel and some service consumption recovered rapidly, and the recovery process of durable consumer goods such as household appliances lagged behind, but the recovery trend did not change. In terms of overseas markets, the global economy has risen steadily, the year-on-year inflation data in Europe and the United States have continued to fall, overseas inflationary pressure and destocking pressure have eased, exports have recovered significantly since the second half of the year, and the annual growth rate has turned positive.
Although the domestic consumption recovery of the home appliance industry is still expected to be weak in 2024, and the global economic recovery is also zigzag, Chinese home appliance enterprises have adhered to technological innovation, explored user needs, and improved the level of global operation over the years, creating strong industrial resilience, and it is believed that the home appliance industry will continue to maintain stable growth in 2024, and is expected to contribute to further stimulating the domestic consumer market under the promotion of relevant national policies.
According to data from the National Bureau of Statistics, in 2023, the cumulative main business income of China's home appliance industry will reach 184 trillion yuan, a year-on-year increase of 7%; profit was 156.5 billion yuan, a year-on-year increase of 121%。
According to the annual performance forecast announced by listed home appliance companies, all major appliance companies have achieved stable growth, and the growth rate of some enterprises in the third quarter has declined. Judging from the survey feedback of more than 100 member companies by the China Household Electrical Appliances Association, more than 60% of enterprises will maintain revenue growth in 2023, and nearly 50% of enterprises will maintain profit growth. In 2023, the trend of bulk commodities will continue to diverge, metal commodities will run at a high level, chemical commodities will run at a low level, and on the whole, raw materials will be relatively low, and the cost pressure on the home appliance industry will be slightly eased. In 2023, the RMB exchange rate will generally show strong resilience and effectively play the role of a stabilizer, while enterprises will continue to take action at the level of reducing costs and increasing efficiency. The above factors have contributed to the improvement of industry scale and profits, but the profit growth rate in the second half of the year has decreased slightly.
According to data from the National Bureau of Statistics, in 2023, the output of China's household appliances will increase steadily. Among them, the output of refrigerators, air conditioners, and washing machines increased by more than 10% year-on-year, respectively. 28%。Small household appliances and kitchen appliances have grown to varying degrees. In 2023, the domestic market of household appliances will recover steadily under the national policy of promoting consumption, especially the policy incentives of key provinces and regions. According to the total data of Aowei Cloud Network, the scale of China's home appliance retail market (excluding 3C) will reach 849.8 billion yuan in 2023, a year-on-year increase of 36%。Beijing, Shanghai, Guangdong, Jiangsu and other places have introduced stimulus policies such as trade-in to stimulate the potential of replacement, and various home appliance brands and e-commerce platform enterprises have actively participated. Affected by the high temperature weather, the domestic market of air conditioners is showing a hot selling scene, and the annual sales are **75%, which drove the overall growth of the domestic market.
Although the emerging category market has stabilized, the growth trend is still gratifying due to the low overall ownership. According to the total data of Aowei Cloud Network (**c), in the field of clean electrical appliances in 2023, the sales of floor scrubbers will increase by 45%; The retail sales growth rate of clothes dryers is 164%;The overall scale of dishwashers was 1.94 million units and 11.2 billion yuan, a year-on-year increase of 23% and 96%。Affected by the positive impact of technological innovation, traditional products have also burst into new vitality, such as the technological iteration of high-speed motors, which has promoted the retail sales of hair dryers to reach 90 in 2023600 million yuan, an increase of 29 percent year-on-year9%。
In recent years, there has been an obvious fission in the domestic household appliance consumer market. On the one hand, the trend of consumption upgrading of household appliances remains unchanged, and even under the impact of the epidemic, the sales of high-end new products have maintained growth. According to GFK data, from January to October 2023, the share of refrigerators with more than 10,000 yuan, washing machines with more than 6,000 yuan, dishwashers with more than 8,000 yuan, and vacuum cleaners with more than 5,000 yuan in the retail market still increased significantly compared with 2022. On the other hand, after the end of the epidemic, consumers' sensitivity to home appliances** is also increasing. Aowei data shows that in the online retail market, compared with mid-to-high-end products, entry-level products perform better. In particular, TVs below 2000 yuan, air conditioners below 1500 yuan, and refrigerators below 2000 yuan have performed well, the key reason is that in the environment of lack of consumer confidence, the gap between brands is not enough to make up for the difference, and consumers prefer cost-effective products.
Since 2023, in addition to the European region that is still sluggish due to geopolitical conflicts, the economies of the United States, the Middle East, India, Japan and other places have shown recovery growth. The export of the home appliance industry has been disturbed by factors such as the destocking cycle, the weakening of the pull effect, the transfer of production capacity to overseas, and geopolitics. However, in the second half of the year, with the gradual increase in the demand for overseas home appliance markets, the decline in inventory has led to a significant recovery in home appliance exports. According to the data of the General Administration of Customs, in 2023, the export value of China's home appliance industry will be 985800 million US dollars, a year-on-year increase of 136%。
China's home appliance exports to various countries continue to diverge, developed economies tend to improve, and developing economies are steadily improving. Among them, the cumulative decline in exports to the United States and Australia and Canada continued to narrow; Although the EU and the UK are improving, the situation is not yet stable; continued weakness on Japan; The BRICS and West Asian and North African countries continue to improve; The growth rate of ASEAN countries has slowed down.
From the perspective of the global market, the internationalization process of China's home appliance enterprises has a history of more than 20 years, which has gone through a series of development processes from OEM and ODM to independent brands, overseas factory construction, overseas acquisitions, and joint ventures. The internationalization system of some leading enterprises has been developed for more than ten years, the marketing system and business partners have become mature and perfect, and the overseas income of enterprises is also increasing year by year. At this stage, the trend of "regionalization" of the first chain has emerged, and the difficulty of market development has increased. Some emerging market countries, such as ASEAN, the Middle East and Africa, South America and other regions, have become an important choice for enterprises to deploy globally.
2023 is a year when the impact of the epidemic subsides and the economic order returns to its place, but there is still an obvious time lag and obstacle in the transmission of the current macroeconomic recovery to residents' employment and income, to the performance of enterprises, and to market confidence. The home appliance industry has a deep understanding of the low willingness to consume and the slow recovery of the domestic market. In the case of inventory cycle, weakening of the pull effect, transfer of production capacity overseas, geopolitics and other factors, the export of China's home appliance industry has withstood external pressure, and the key target markets have shifted from Europe and the United States to countries along the "Belt and Road".
Entering 2024, the recovery of the home appliance industry is expected to continue, and the easing of real estate policies, the continuous improvement of the macro economy, and the introduction of policies to promote consumption will help the home appliance industry continue to recover in 2024. However, it is worth noting that the employment pressure of residents is still large, the growth rate of disposable income is still slowing down, and consumer confidence is still weak, which also indicates that in 2024, the domestic consumption recovery of the home appliance industry will still be weak. In the questionnaire conducted by the association on more than 100 member companies, 20% of the companies expect revenue growth of more than 10% in the first quarter of 2024, 33% of the companies expect to grow within 10%, 28% expect to be flat, and 18% expect a decline.
In addition, we also observe that the current round of cost dividends is nearing the end. All kinds of bulk raw materials** have basically remained stable after a significant decline in the second quarter of 2022, and the cost dividend is mainly reflected in the third quarter of 2022 to the third quarter of 2023, and the profit margin contribution of subsequent raw materials** tends to converge.
In the short term, the risks faced by the export of household appliances are mainly due to superimposed factors such as overseas inflation, inventory cycles, local regional conflicts, and technical barriers. At the same time, Southeast Asian countries represented by India and Vietnam, as well as Mexico, which benefits from the nearshore outsourcing policy of the United States, also seize the opportunity to accelerate the transfer of attracting and undertaking global labor-intensive industries and low value-added links. In this context, the flexibility and adaptability of the globalization strategy of China's home appliance enterprises are particularly important, and it is imperative to choose appropriate areas to invest and build factories. At the same time, the competitive advantage of the whole industry chain, digital iteration, continuous cultivation of R&D and innovation capabilities, as well as the continuous penetration of channels and brands in China's home appliance industry have become an important embodiment of the global market influence of China's home appliance industry.
China is the world's largest exporter of home appliances, and also has a huge consumer market for home appliances. Although the industry is generally conservative in its expectations for 2024, and the internal and external environment is still complex and severe, in the face of the home appliance industry that has entered the stock market, there are still many opportunities for the trend of systematization, home furnishing integration, high-end superimposed demand segmentation, health, and intelligence. At the same time, in the field of relatively low ownership, such as dishwashers, dryers, cleaning appliances, etc., the industrial development is full of momentum.
2024 is a key year for China's home appliance industry to move towards the goal of "global home appliance technology innovation leader" in the "14th Five-Year Plan".