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China Large Appliances Market Forecast to 2020: Ken Research

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Title: China Large Appliances Market Forecast to 2020: Ken Research


1
China Large Appliances Market Forecast to 2020
Ken Research
2
How China Large Appliances Market Is
Positioned? Large appliances are considered as
durable consumer goods which have varying
replacement rate depending on type of appliance
and user experience desired. It is a very dynamic
market and continuous innovation is required to
make the products more economical and user
friendly.
3
It was reported that urban households in China
own television sets, washing machines,
refrigerators and air conditioners per 100
households. Urbanization in China was at in
2015 which translates into million people
living in urban locations. Living conditions of
rural population is also improving as an
investment in infrastructure has helped in better
connectivity and living conditions of people.
There is significant rise in the ownership of
large appliances in rural areas especially air
conditioners and refrigerators. It has increased
from air conditioners in 2010 to air
conditioners and to refrigerators per 100
household in rural areas in 2014. Demand for
large appliances in China is mainly driven by
replacement of existing old products with new
ones. Demand for large appliances has increased
from million in 2010 to million in 2015
registering a CAGR of . In terms of revenue
market has increased from USD billion in 2010
to USD billion in 2015 registering a CAGR of
. Programs like Go rural subsidy, subsidized
trade in home appliances, launch of energy saving
products has helped large appliances companies to
make substantial sales increase in 2011. Volume
sales increased from million in 2010 to
million in 2011.
4
  • The sales of large appliances during 2013
    witnessed launch of many smart consumer
    appliances which became the major growth driver
    especially driving the replacement demand. This
    helped the large appliances market to register a
    positive growth rate of in 2013. Programs like
    go rural have helped to develop sales network in
    rural areas which has benefitted the market in
    2013 and years after.
  • What have been the Major Segments that has Driven
    Change
  • Demand for refrigerator has risen initially in
    2011 but after that continuous decline was
    registered in sales volume. Sudden rise in demand
    for refrigerator in 2011 was mainly due to demand
    coming from rural areas especially on account of
    subsidy offered which started in 2009.
  • Majority of the demand for refrigerator in urban
    areas was witnessed for larger size refrigerators
    with multiple doors, energy saving rating and
    other added features. Average size of the
    television being demanded in China has registered
    a consistent increase. The demand preference has
    increased in first quarter of 2012 from 37.8
    inches to 45.3 inches in first quarter of 2016.

5
  • Demand for television was mainly driven by
    replacement with high end technology products.
    For instance, CRT TV is not manufactured by any
    major TV manufacturing company in China. Consumer
    preference has changed to LED and Curve
    television with many other added features.
    Television market in china was dominated by
    Skyworth, Hisense, TCL, Changhong and others. Top
    three companies have accounted for a revenue
    share of more than during 2015.
  • During 2015, around million washing machines
    were sold with an aggregate value of USD
    million. Replacement demand for existing washing
    machines was the major reason for growing demand
    for washing machine. Replacement demand has
    accounted for more than of total domestic
    sales of washing machine in China during 2015.
  • Market demand for new technology based air
    conditioners was on the rise in 2015. Retail sale
    of artistic high end intelligent air conditioner
    accounted for sales volume in 2015 registering
    year-on-year increase of .

6
Sale of new air conditioner to replace existing
air conditioner accounted for approximately of
total sales in 2015. Distribution and sales
network for large appliances has evolved over a
period of time. More and more companies are
focusing to create a centralized distribution
network to reduce inventory and give better
consumer experience by promoting timely delivery
and installation. Companies such as Haier have
separate logistics company to handle distribution
and sales network of large appliances in
China. Which Large Appliances are Majorly
Preferred by Chinese? With ever improving
technology and picture quality, demand for large
screen television is on the rise. The demand for
television with size greater than 45 inches has
consistently increased during the period
2012-2015. Decline in final price of the
television has helped to augment the market for
large screen size. Reduced thickness achieved
with improvement in technology has reduced the
space occupied and is also the very important
reason for the increased replacement demand for
CRT TV in urban cities where personal space is in
limited quantity.
7
With rising purchasing power of consumers in
China, the demand for high end technology and
large volume refrigerators has increased. The
volume share of multi-door and bi-fold
refrigerators has showcased an increase with
share increasing from in 2011 to in 2015.
The companies are launching smart and efficient
refrigerators with advancement in technology
through consistent product modification. There
has been substantial decline in product demand
for low cost machine mainly due to smaller
capacity and demand for high end and automatic
and smart machine. From macroeconomic
perspective, rising urbanization and high per
capita income in urban areas has led to increase
in demand for high end and costly refrigerators
as they are technologically more advanced and
have high capacity. Demand for pulsator type or
front loading washing machine was on the rise on
account of its efficiency and reduced water
consumption and faster cleaning.
8
  • These positive attributes have contributed
    significantly to growth in share for pulsator
    type washing machine. Rising demand for energy
    efficient and increased scarcity of water has
    promoted the sale of roller type washing machine.
  • Increased demand for energy efficient and low
    water consuming washing machines has promoted the
    sale of more expensive roller type washing
    machine. Increased demand for these products has
    led to increased share of products which are
    priced above RMB 3,000.
  • Front loading washing machines have shown
    continuous increase in demand on account of its
    high efficiency and low water consumption.
  • The share of front loading washing machine have
    increased significantly over the years with
    market share rising from in 2013 to in
    2015. Most of the new washing machine launched in
    China market is of front loading type. Top
    loading machines still dominate the market owing
    to their low prices.

9
Focus on energy efficient products has led to
increased demand for inverter type air
conditioners (frequency conversion) which are
more efficient and consume less power compared to
normal air conditioner. These air conditioners
being energy efficient products, saves a part of
the cost on electricity bill this saving on
electricity bill promotes the consumers to invest
in energy efficient air conditioners. Over the
years, the volume share of frequency conversion
type air conditioner has increased from in
2011 to on 2015. Air conditioner is high
priced product with majority of demand coming
from products priced above 3,000 RMB. In 2015,
of the demand for air conditioners was originated
from products priced above RMB 3,000 demand for
high priced product. This was mainly on account
for better and more energy efficient products.
Demand for air conditioner was mainly reported
from urban areas where per 100 household
ownership was reported at 107.4 in 2014.
10
  • How the Logistics is Handled for Large Appliances
    by Online Companies in China?
  • Most of the manufacturers have their own logistic
    system and they use their services for supply to
    warehouse and delivery at location of
    whole-sellers, retailers and exclusive stores.
    Fully developed logistics system is necessary to
    cut down on inventory and ensure faster delivery
    in very competitive market.
  • Midea group consolidated its internal and
    external social logistics resources, improving
    its overall capability to provide logistical
    solution. It launched an integrated logistic
    system covering 17 provinces and cities
    nationwide, initially completing the construction
    of a highly efficient end to end logistic system
    from storage, trunk routes and branch transport
    to the last kilometer delivery.
  • Haier has started a new subsidiary to handle its
    logistics requirement for supply of large
    appliances and ensure proper integration of
    online and offline sales. In 2015, self-built
    warehouses were constructed adding up to a total
    of self built warehouses.

11
  • The operations in 3rd and 4th tier cities were
    still in development phase and need excellent
    logistics network to fully integrate these areas
    to the main system. HUB coverage was expanded to
    further enhance the delivery speed to villages
    and to doors in 3rd and 4th tier markets.
  • Other major companies manage their logistics
    through parties depending on their needs and
    region they target. Many companies include
    logistics cost as part of their operations.
    Companies also maintain good relationship with
    large retailers to tap the tier1 and tier2
    cities. In tier3 and tier4 cities they rely on
    flagship stores, exclusive shops, and other
    traditional and nontraditional methods for
    effective delivery of products to the consumer.
  • Key Factors Considered in the Report
  • Comprehensive analysis of China Large Appliances
    Market and its segments
  • Listed major players and their positioning in the
    market
  • Identified major industry developments in last
    few years and assessed the future growth of the
    industry
  • Large Appliances Market of China with their
    Products

12
For more information about the publication, refer
to below link https//www.kenresearch.com/consume
r-products-and-retail/consumer-electronics/china-l
arge-appliances-market/57225-95.html Related
Reports https//www.kenresearch.com/consumer-prod
ucts-and-retail/consumer-electronics/india-led-tel
evision-market-research-report/585-95.html https
//www.kenresearch.com/consumer-products-and-retail
/home-and-office-furnishings/india-vacuum-cleaner-
market-research-report/680-95.html https//www.ke
nresearch.com/consumer-products-and-retail/home-an
d-office-furnishings/india-kitchenware-products-ma
rket-research-report/671-95.html Contact UsKen
ResearchAnkur Gupta, Head Marketing
CommunicationsAnkur_at_kenresearch.com91-901537824
9
13
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