Date: 2017/2/15 Source: China Appliance (run by CHEAA)
After entering Chinese market in 1990s, dishwashers have long remained a relatively small market size, with BSH, Haier, Midea and Panasonic accounting for 80% of the market. After decades of development, this sector is coming into more and more Chinese consumers’ view. Statistics from China Market Monitor Co. Ltd (CMM) suggest that Chinese dishwasher sector saw retail sales of 1.56 billion Yuan from Jan to Oct 2016, a year-on-year increase of 107.2%, of which online sales saw a year-on-year increase of 158.9% while offline sales saw a year-on-year increase of 92.7%. This industry is embracing its strategic market opportunity after saw a surge for two years in a row, thanks to an increased recognition of consumers, more market entrants, updated technology, and more importantly, an adaptation to Chinese tastes.
More brands speed up strategic deployment
Dishwashers are getting trendy. “The swelling middle class and the 80s or 90s generations contribute a lot to the growth with their strong buying power and a preference for high-end products. Besides, an increased international exposure allows consumers to look at new products, and dishwasher is one of them. Last but not least, a growing number of new entrants in the past two years also play a part.” Huang Lei, director of dishwasher division at BSH Home Appliances Holding (China) Co., Ltd, shares his view on what lies behind this market surge.
Starting from 2015, leading home appliance makers, both new entrants and established brands, have been deploying their dishwasher lines.
With new products rolled out, new entrants are bringing a change to this industry. Fotile placed its first in-sink dishwasher on market in March 2015. Robam rolled out two dishwasher lines featuring “large capacity and large power” in June 2016. Joyoung rolled out its first countertop dishwasher line in May 2016. Galanz rolled out its Aegean Sea dishwasher line in October 2016.
Established brands change to win. After stepping into online market in 2016, Haier customized a countertop dishwasher named Xiaobei through crowdfunding in March 2016, the first case in China. BSH, a leading enterprise in dishwasher smartization, rolled out a smart dishwasher line with its Home Connect system in July 2016. Panasonic rolled out a mini dishwasher line in October 2016.
These brands position themselves differently. Home appliance brands tend to expand their portfolio to meet various needs, while kitchen appliance brands are looking at specific segments. Robam tells our correspondent that, “Robam plans to make only built-in products in the future, and aim at Chinese-style large kitchen. Drawer dishwashers are designed for kitchens of small size.”
As to distribution channels, brands differ too. Su Lei, Senior Market Manager of In-sink Dishwashers at Fotile, tells us that, “Our main distribution channel is offline, though we do sell through online channels. In year 2016, our in-sink dishwashers registered a 400% increase year-on-year in sales, a rather exciting performance.” Different from Fotile, Midea and BSH have long been devoted to their online market. Statistics from All View Cloud (AVC) indicate that, top 10 best sellers online often came from Midea or BSH before Haier launched its Xiaobei dishwasher line.
Robam reveals that, “Industry leaders attach an increased attention on dishwashers, and see it as a strong growth point in the future. This plays a big part in the surge of dishwasher market.” Vatti’s plan for private offering of A-shares in 2016 suggests that it is estimated to raise less than 550 million Yuan, and plans to use part of them into its dishwasher sector.
Few technological improvements
Technologies on dishwashers have grown mature after years of development, laying a solid foundation for market expansion. There are four cleaning systems commonly used in dishwasher sector: spraying, turbo, evaporating and ultrasonic. In Chinese market, only Fotile’s in-sink dishwashers have three cleaning modes (spraying, turbo and ultrasonic), while most dishwashers on the market use a spraying system. Gao Feng, Senior Engineer at Midea, says, “In spraying mode, dishwashers uses high-pressure water to clean.”
Su Lei from Fotile tells us that, “Our in-sink dishwasher integrates three modes, but turbo and ultrasonic modes are mainly used to wash fruits and vegetables. To clean tableware, we use spraying mode.” Gao Feng from Midea says, “Ultrasonic cleaning mode uses water as a medium, and performs with tableware in water. This mode doubles water and electricity consumption. Though it excels in removing residue, it still needs to work with spraying mode to really clean up.”
Drying technology is another critical point for dishwashers. Sun Hong, Planning Director of Hair’s dishwater sector in China, says that, “Water drops on tableware are dispersed by high pressure air from the fan, and then dried up by heat.”
Drying technologies differ. According to Huang Longzhong, R&D Manager of Sanhua Holding Group, dishwashers dry up tableware through an open mode or a closed mode. In open mode, steams generated are vented out, and in closed mode, they are condensed and eliminated within a dishwasher. Huang Lei from BSH says, “Condensing drying is mainstream drying mode on market. Apart from that, there are heat exchange technology, using a water tank to create temperature difference, and BSH’s Zeolite drying system, using natural zeolite to exchange heat and really achieving energy efficiency excellence.”
Stay close to needs of Chinese households
Chinese industry players have come a long way in adapting dishwashers to Chinese tastes, and this contributes a lot in its market surge. For a long time, Chinese dishwasher market has been sluggish because consumers were little exposed to this product, and apart from that, Chinese small size kitchens, installation issues, Chinese dietary habits also play a part.
Chinese dishwasher market has long been dominated by products of European standards. But Chinese dietary habits differ from European distinctly. Chen Changsheng, Vice Director of Dishwasher Department at Galanz, says, “For instance, European and American consumers put clean tableware back into their cabinets, but Chinese consumers don’t do that. Besides, Chinese consumers want their tableware to be totally dried up. Consumers from different regions of China use tableware of various shapes, which might not be fitting to standard racks.” Sun Hong from Haier says, “We don’t just manufacture or sell popular overseas models. We develop models for Chinese.” Built upon integrated global resources, Chinese industry players develop products suited to Chinese tastes, making this their unique advantage.
To accommodate to the variety of Chinese kitchens, industry players rolled out products accordingly. Huang Lei from BSH tells us that, “BSH expands its product portfolio to include more models than what they do in European market. Apart from built-in types commonly seen in European market, we have countertop ones, compact ones, built-in ones and ultrathin ones on Chinese market.”
Gao Feng from Midea tells us that Midea have adapted the racks and elevated the drying performance of their dishwashers to accommodate to Chinese needs. Products on European or American markets usually take 1 to 2 hours to clean up. But considering Chinese consumers’ concern of high electricity consumption, Midea reduces the time. What’s more, Midea adapted their dishwashers’ drainage system based on the style of Chinese kitchens.
Fotile elevates their products to Chinese needs through innovation. Fotile’s in-sink dishwasher has a variety of functions, and saves up kitchen space greatly. Su Lei from Fotile says, “Our dishwashers are capable of removing pesticide residue. According to test data from Guangdong Detection Center of Microbiology, they can remove up to 90% of pesticides including Clenbuterol, Dichlorvos and Omethoate.” Thanks to these cross-boundary functionalities, Fotile’s in-sink dishwashers have won a number of awards including Red Dot Award, CHEAA-granted Award for Scientific and Technological Advancement and CHEAA-granted Appliance Award.
Chinese dishwasher market needs further development
According to Chinese search engine Baidu, the search index of “dishwasher” for 2016 has doubled from 2011. Though dishwasher sector has drawn increased attention in recent years and seen a surge in sales, its penetration rate registers less than 1%. Consumers’ awareness needs further improvement.
Industry players have been committed to addressing concerns of consumers. Gao Feng from Midea says, “Consumers now have doubts about dishwashers’ cleaning performance and have concerns about high water and electricity consumption.” As to consumers’ exposure to this product, Huang Lei from BSH says, “since introducing dishwashers to Chinese market in 2002, BSH has been committed to expanding its presence through road exhibition, allowing more people to know dishwashers. In recent two years, we have organized several experience activities for consumers. And they left with a better understanding of dishwashers and said they wished they had known it earlier.”
Dishwasher sector is at a new stage but not really at a tipping point of blooming. Robam tells our correspondent that, Chinese dishwasher market is at a popularization stage and is not mature yet. Most brands get involved in this sector in only the recent two years. This sector is set to bloom when consumers’ awareness improves.