Source: CHEAA-run China Appliance magazine
The washing machine market has been freezing up with a fall in both sales value and volume in 2022. Omnichannel retail sales volume of China’s washing machine industry stood at 33.81 million units in 2022, down 9.1% YoY, and retail sales value 68.2 billion Yuan, down 11% YoY, according to All View Cloud. As to overseas market, the export volume of washing machines from China stood at 26.27 million units in 2022, down 6.9% YoY, while the export value 4.21 billion USD, down 6.3% YoY, according to General Administration of Customs. The figures do not look good in comparison with the past 2021 when domestic sales touched the 70 billion Yuan milestone and export experienced a rise in both volume and value.
The washing machine industry deepens its development with functions diversified, product portfolio expanded, and distribution channels changed despite the gloominess of 2022, which paves the way for a rebound in 2023.
Function upgrade
As a well-established category, washing machine industry has the urge to stimulate the replacement needs of consumers amid the sluggish consumption, which drives the industry to upgrade the function of washing machine from washing to include drying and clothes care.
Drying has been a key direction of upgrade in recent years. With a significant rise of consumers’ recognition of dryers including standalone dryers and washer dryer combos, China’s washing machine industry ushers in the era of drying, leading to an accelerated deployment of drying products of industry players. The drying function has been upgraded for a fast and energy-efficient drying experience. It’s worth noting that heat pump models are gaining traction due to its unique technical advantages.
The production capacity of dryers grows fast. In 2022, BSH Home Appliances’ Chuzhou-based new factory of washers and dryers came into production. It is the second dryer factory of the company worldwide. In the same year, Midea’s Jingzhou-based washing machine industrial park went into operation. The factory is the third washing machine production base of Midea and is designed to manufacture tumble washers and dryers.
Clothes care is expected to be a new direction of upgrade down the road. “The future innovation will center on clothes care.” My interviewee from BSH Home Appliances explains with an example, “With air care technology, tangle-free drying function, silk quilt gentle care mode and our patented self-cleaning system, we provide our consumers a brand-new clothes care experience.” My interviewee from TCL agrees that clothes care will be a core demand in the future and introduces that TCL has rolled out its ion care technology. Beyond the above mentioned, clothes care has expanded its portfolio from washing, drying to something new. For example, some models of Panasonic offer personalized fragrance care function.
The washing process also sees innovations. In 2022, Haier unveiled its new model with serum wash function which dissolves and blends detergent into a high concentration washing serum, sprays it with high pressure, and let it fully absorbed to remove stains in a water efficient, electricity efficient, and time efficient way.
Niche market
Aside from an upgrade in function, washing machine industry sees an emergence of increasingly diversified categories including wall-mounted washing machine, portable washing machine, underwear washer, sock washer, washing robot, and shoe washer. The demand of niche markets is driving the industry to branch out into new areas. It is learned that sales of shoe washers during the National Day holiday in October up 700% YoY as it meets the shoe washing demand of consumers.
Distribution channel
Online channels rose to play a bigger role in home appliance sales during the pandemic. Statistics from All View Cloud show that, online retail sales of washing machines in China stood at 40.7 billion Yuan, down 0.1% YoY while offline market dived by 23.4% YoY with retail sales value at 27.4 billion Yuan. The optimization of pandemic prevention and control measures is expected to bring back the vitality of offline market in 2023.
In 2023, many industry players plan to put more efforts into lower tier market with large untapped replacement demands to fully unleash its pent-up consumption upgrade demand during the pandemic.