Page 204 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
more than one fifth of China’s home appliance exports. demand is seen as crucial for the Chinese economy that
In 2017, China’s export value of home appliances to the has been seeking to undergo a painful transition from
US hit a record high of US$14.4 billion, up by 8.1 percent an export and manufacturing-led economy to a more
year-on-year, accounting for 23.1 percent of China’s total market-oriented economy (SCMP).
export value of home appliances, down by 0.3 percent
year-on-year. In the past 10 years, China’s export value of Laundry
home appliances to the US witnessed a CAGR of 7 percent
(CHEAA, How Badly). China’s home appliance industry enters a stage that
features accelerated upgrading, transformation and
In 2018, revenue for the Household Electrical changes after 30 years of development. As to the laundry
Appliance Manufacturing industry in China is expected sector, upscale products, including front loaders, inverter
to total US$50.2 billion, up 5.5 percent from 2017. washers, and large-capacity, smart, healthcare washers,
The industry has been growing steadily, with revenue have become the mainstream of the market, propelling
increasing at an annualized rate of 7.2 percent in the the market to go high-end and specialized. With no
past five years. In 2018, industry output is estimated at doubt, front loaders have been the most powerful
619.2 million units of household electrical appliances. booster of the market. Statistics monitored by All View
Investment in R&D has increased significantly in recent Cloud showed that, from January to November 2017,
years, especially in terms of microwave oven and electric front loaders took a market share of 70 percent offline by
cooker manufacturing. With the market becoming retail sales value, and more than 60 percent online. This
more competitive, innovation has become increasingly trend can also be reflected by the rising demand of front
important. Local producers such as Robam, Vanward, loader use drive motors. According to Du Rongfa, Vice
Vatti, Macro and Midea manufacture most of the products President of Wolong Group, demands for front loader use
in the domestic market. The top four companies in the drive motors have rose year-on-year from 2016 to 2019
Household Electrical Appliance Manufacturing industry with an average growth rate of 3.3 percent. Demand
in China, Media, Vanward, Vatti, and Robam, account for could reach 34 million units as of 2019. Inverter washers
an estimated 31.0 percent of industry revenue in 2018. also took an increased share of the market year by year
The variety of product types is largely responsible for the as the concept of energy efficiency and environmental
low market share concentration. Low barriers to entry protection takes root in more and more people. Statistics
and a large number of enterprises also contribute. The from China Market Monitor suggested that, from January
output of household electrical appliances in China is to November 2017, inverter washers took a market
large, totaling about 619.2 million units in 2018. Attracted share of 55.89 percent offline by retail sales volume, a
to the industry’s high development potential, new year-on-year growth of 8.6 percent. Meanwhile, balcony
enterprises and subsidiaries of foreign enterprises set drying may soon be a thing of the past, as the dryer
up factories in Guangdong, Zhejiang and Fujian. Market sector became a significant part of laundry industry in
share concentration is expected to increase slightly in the 2017. Both separate dryers and combos expanded fast
next five years as larger enterprises acquire smaller ones in market size. According to China Market Monitor, retail
(IBISWorld, Household Electrical). sales volume of dryers in China is expected to reach
192,000 units, a year-on-year rise of 42 percent, and
China’s smart home appliances will see steady growth. the sales value 680 million yuan, a year-on-year of 81.2
Opportunities in the industry will be driven by demand percent (CHEAA, Laundry Sector).
from tech-savvy Chinese consumers who embrace smart
home technology to a greater extent than their global Home Heating
counterparts. In a 2016 international survey conducted
by Germany-based market researcher GfK, more than 75 According to ChinaIOL.com, air source heat pumps
percent of people interviewed in China said that smart (ASHP) space heaters and dryers saw an explosive boom
home technology will impact their lives in the next few in 2017, posting sales volume of 0.7 million units with a
years, compared to the global average of just over 50 year-on-year growth of 206 percent, and sales value of
percent. The survey results put smart home technology 9.6 billion yuan with a year-on-year rise of nearly 200
on par with mobile payments and wearable tech as percent. Alongside the shifting projects of household
trends that have played a key role in pushing forward ASHP units, central units also boomed, making a highlight
innovative technology in China. Growth in consumer of the industry in 2017. These units are mainly used in
204
more than one fifth of China’s home appliance exports. demand is seen as crucial for the Chinese economy that
In 2017, China’s export value of home appliances to the has been seeking to undergo a painful transition from
US hit a record high of US$14.4 billion, up by 8.1 percent an export and manufacturing-led economy to a more
year-on-year, accounting for 23.1 percent of China’s total market-oriented economy (SCMP).
export value of home appliances, down by 0.3 percent
year-on-year. In the past 10 years, China’s export value of Laundry
home appliances to the US witnessed a CAGR of 7 percent
(CHEAA, How Badly). China’s home appliance industry enters a stage that
features accelerated upgrading, transformation and
In 2018, revenue for the Household Electrical changes after 30 years of development. As to the laundry
Appliance Manufacturing industry in China is expected sector, upscale products, including front loaders, inverter
to total US$50.2 billion, up 5.5 percent from 2017. washers, and large-capacity, smart, healthcare washers,
The industry has been growing steadily, with revenue have become the mainstream of the market, propelling
increasing at an annualized rate of 7.2 percent in the the market to go high-end and specialized. With no
past five years. In 2018, industry output is estimated at doubt, front loaders have been the most powerful
619.2 million units of household electrical appliances. booster of the market. Statistics monitored by All View
Investment in R&D has increased significantly in recent Cloud showed that, from January to November 2017,
years, especially in terms of microwave oven and electric front loaders took a market share of 70 percent offline by
cooker manufacturing. With the market becoming retail sales value, and more than 60 percent online. This
more competitive, innovation has become increasingly trend can also be reflected by the rising demand of front
important. Local producers such as Robam, Vanward, loader use drive motors. According to Du Rongfa, Vice
Vatti, Macro and Midea manufacture most of the products President of Wolong Group, demands for front loader use
in the domestic market. The top four companies in the drive motors have rose year-on-year from 2016 to 2019
Household Electrical Appliance Manufacturing industry with an average growth rate of 3.3 percent. Demand
in China, Media, Vanward, Vatti, and Robam, account for could reach 34 million units as of 2019. Inverter washers
an estimated 31.0 percent of industry revenue in 2018. also took an increased share of the market year by year
The variety of product types is largely responsible for the as the concept of energy efficiency and environmental
low market share concentration. Low barriers to entry protection takes root in more and more people. Statistics
and a large number of enterprises also contribute. The from China Market Monitor suggested that, from January
output of household electrical appliances in China is to November 2017, inverter washers took a market
large, totaling about 619.2 million units in 2018. Attracted share of 55.89 percent offline by retail sales volume, a
to the industry’s high development potential, new year-on-year growth of 8.6 percent. Meanwhile, balcony
enterprises and subsidiaries of foreign enterprises set drying may soon be a thing of the past, as the dryer
up factories in Guangdong, Zhejiang and Fujian. Market sector became a significant part of laundry industry in
share concentration is expected to increase slightly in the 2017. Both separate dryers and combos expanded fast
next five years as larger enterprises acquire smaller ones in market size. According to China Market Monitor, retail
(IBISWorld, Household Electrical). sales volume of dryers in China is expected to reach
192,000 units, a year-on-year rise of 42 percent, and
China’s smart home appliances will see steady growth. the sales value 680 million yuan, a year-on-year of 81.2
Opportunities in the industry will be driven by demand percent (CHEAA, Laundry Sector).
from tech-savvy Chinese consumers who embrace smart
home technology to a greater extent than their global Home Heating
counterparts. In a 2016 international survey conducted
by Germany-based market researcher GfK, more than 75 According to ChinaIOL.com, air source heat pumps
percent of people interviewed in China said that smart (ASHP) space heaters and dryers saw an explosive boom
home technology will impact their lives in the next few in 2017, posting sales volume of 0.7 million units with a
years, compared to the global average of just over 50 year-on-year growth of 206 percent, and sales value of
percent. The survey results put smart home technology 9.6 billion yuan with a year-on-year rise of nearly 200
on par with mobile payments and wearable tech as percent. Alongside the shifting projects of household
trends that have played a key role in pushing forward ASHP units, central units also boomed, making a highlight
innovative technology in China. Growth in consumer of the industry in 2017. These units are mainly used in
204
