Source: CHEAA-run China Appliance magazine

China’s refrigerator industry entered 2023 with high expectation for an economic recovery after the tight pandemic prevention and control measures came to an end in the last month of 2022. But a year has passed, the rebounding momentum has not been as strong as expected for the home appliance industry in general, but refrigerator industry has been an exception, posting good shipment and sales numbers.

Here’s the shipment performance. From January to November 2023, shipments of refrigerators stood at 79.796 million units, up 14.3% YoY, with 40.036 million units shipped to overseas markets, up 25.1% YoY, and 39.76 million units to domestic market, up 5.1% YoY, according to

What do these numbers say? First, they point to an obvious recovery driven by revenge spending. There has been a V-shaped recovery compared to year 2022 when shipments of refrigerators stood at 75.58 million units with a plunge of nearly 13% after two years of fast growth driven by the stay-at-home lifestyle during the pandemic. In fact, the combined refrigerator shipments in the first eleven months of 2023 have exceeded the annual performance of 2019. Second, overseas markets have become the major growth driver. After experience a surge in exports in 2021 due to disrupted global supply chains, the refrigerator industry again saw a big rise in exports in 2023.

But to some extent, the recovery is still below the expectation of industry players. While the recovery of domestic market fell short of the industry’s expectation, there has not been enough boosters to sustain the export growth and the profitability level has not been satisfactory. Retailers in Europe and North America showed a desire to replenish inventory in early 2023 after their high inventory sold in 2022, which drove up the exports of refrigerators of China. But it’s worth noting that the demand for lower-priced products rose significantly, pointing to a consumption downgrade in Europe and North America caused by high inflation and high interest rates. Beyond that, lower-priced products have also been the major demand of emerging markets of China. These indicate that the profitability level and the product structure of China’s refrigerator exports fell short of expectations. Given the volatile global situation, any changes in shipping costs or raw material prices could make a big impact on China’s refrigerator exportation. Chinese refrigerator companies should adjust and optimize their product structure timely in their development of overseas markets.

Retailing data look good too. From January to November 2023, retail sales value of refrigerators in domestic market stood at 92 billion Yuan, up 6.0% YoY, and the growth rate of sales value for Q4 is expected to reach 10% YoY, according to All View Cloud. The refrigerator retail sales vary across different channels. Under the influence of the pandemic in the past three years, many emerging e-commerce platforms such as Douyin, Pinduoduo and Little Red Book rose alongside offline chain stores, e-commerce platforms and supermarkets. Among them, sales from emerging categories such as Douyin multiply with lower-priced products selling in large numbers, squeezing big market share from other channels, especially the market share of offline retailers in third and fourth tier market.

The fast growth of shipment and sales have boosted the refrigerator’s industry’s confidence. On December 10, Haier’ interconnected refrigerator factory, with an annual production capacity of 2 million units, was put into operation in Haier COSMOPlat Industrial Internet Ecological Park in Qingdao. A month before that, the first phase of the Homa’s refrigerator smart manufacturing base was put into operation, expanding the company’s total refrigerator production capacity to 18 million units. Besides, if we include the Gree’s Luoyang-based production base, Midea’s Jingzhou-based production base, and Panasonic’s Wuxi-based production base which have all started production in 2022, we find that China’s refrigerator industry has increased total production capacity by over 15 million units in the past two years. But the production capacity utilization rate of the refrigerator industry hit a historic low in 2022, and only maintained a level of less than 60% in 2023. Considering that most of the newly added production capacity are for high-end smart products, industry insiders have reasons to believe that there is still a surplus of low-end product production capacity.

In fact, three noteworthy phenomena, namely the strong driving force of exports, the rapid rise of emerging e-commerce platforms, and the redundancy of production capacity for low-end products, indicate a trend of declining profits behind the booming production and sales of the refrigerator industry in 2023. With no significant positive factors in sight, refrigerator companies have no reason to be blindly optimistic. On the contrary, they should explore market opportunities in niche markets, targeted demographics, and distribution channels with an awareness of a possible decline in scale and profitability in the new year.