Source: CHEAA-run China Appliance magazine
Clothes dryers come into view of many as a bacteria remover amid the coronavirus outbreak as videos on using dryer to disinfect masks go viral. Enterprises and distributors seize the opportunity to highlight this selling point. During the outbreak, BSH donated its washers and dryers to a number of hospitals based in Hubei province, Zhejiang province as well as Jiangsu province for medical workers to clean and disinfect their clothes; Gome, a leading home appliance retailer, placed dryers at the entry of its stores to allow consumers to disinfect their clothes free of charge.
Will the rising awareness of healthcare speed up the process of dryers penetrating into households in China?
The rising healthcare awareness fuels the market growth of dryers
"In fact, as the purchase power and healthcare awareness of Chinese consumers rise, dryer is more and more recognized by families in pursuit of quality life with the clean, comfortable experience it offers, making it a critical trend of the laundry sector which is in an attempt to upgrade consumption. The dryer market has seen drastic changes in recent years." Jin Liang, General Manager of Gome’s Beijing branch, says. He offers us a set of nationwide sales data on Gome’s platform: sales of dryers grew by more than 100% year-on-year (of which sales in Beijing up by 120%) in 2019, and the CAGR of dryers in the past five years rose by more than 600% in China.
Statistics from market consultancy All View Cloud point to the same trend. For the first half of 2019, standalone dryers saw retail sales value up by 80% year-on-year and retail sales volume up by 95% year-on-year; for January to October 2019, online sales volume of dryers grew by 88.58% year-on-year. I noticed that, during the June 18 shopping day 2019, sales of dryers on Suning.com surged by 186.2% year-on-year by value in only the first hour, while sales value of dryers on JD.com hit record-high 10,000 units in only 10 minutes.
In terms of reasons behind the growth, dryer reduces secondary pollution caused by the ambient environment compared to the traditional way of hanging clothes on the clothesline. Plus, with the bacteria-removing function, the product offers a healthy, hygienic, and comfortable experience that is aligned with consumers’ current concept of a healthy lifestyle.
The sudden outbreak of covid-19 brings dryer into the sight of the public, many industry insiders point it out during the interview. “The coronavirus can be killed after heated for 30 minutes at 56 degrees Celsius. Thus, if we set the temperature at 60 degrees and heat the clothes for at least 30 minutes in the dryer. The virus on the clothes can be killed.” Lu Jianguo, head of the Testing and Measurement Institute of China Household Electric Appliance Research Institute (CHEARI) says and adds that, “currently, some families buy a dryer simply out of the need of bacteria removing.”
“The outbreak boosts the sales of dryers significantly. Sales volume of dryers in the latest month grew by 50% year-on-year, which I believe was largely driven by the outbreak. It doesn’t seem possible to wash some clothes such as down jacket each time you take it off to remove bacteria amid the outbreak. But with a dryer, you can handily address this issue.” My interviewee from Little Swan who prefers not to be named further introduces that, despite the heating process, dryers are usually equipped with other bacterial killing technologies, such as plasma, ultraviolet light and ozone. “Our dryers use ultraviolet light to kill bacteria in the scope of 60-70cm.”
Zhang Yuan, head of marketing of BSH’s laundry division tells me that, “consumers start to realize the importance of bacteria removal during the outbreak. This leads them to learn more about dryer, which will surely make a positive impact to the future growth of the market.”
Barriers still exist despite the joint efforts of industry players in promotion
Speaking of the expansion of dryers in China, an industry insider once pointed out that, as a niche segment of laundry sector, it started late in China and has not develop to full market competition yet, which means joint efforts from multiple sources including enterprises and distributors are needed to make it recognized as a necessity by consumers.
More and more industry players started to eye this sector and get involved in the past two years. Monitored data from All View Cloud show that, there were 51 brands on the market in the first half of 2019, up by 16 year-on-year, of which the number of popular models rose to 248 in the first half of 2019 from 203 the year before.
“The improved manufacturing capability and updated technologies allow domestic players to make innovations and launch more targeted campaigns, which is one of the reasons behind the growth of the sector.” Jin Liang further explains that, “most products on the market have been either vented model or condenser model in the past few years when most domestic makers only had one mold for dryer and heavily relied on imported core components. But now, heat pump model dominated the market with an overwhelming market share by retail sales value, making it the mainstream of the market.”
Despite the progress made, industry players have not stopped going forward. I noticed that, Haier unveiled a clothes care machine that combines air cleaning and drying to allow instant heating as well as clothes care on January 6 2020. Plus, it rolled out 20 more products that covers heat pump dryer, condenser dryer and vented dryer at the same occasion.
Liu Jianguo, General Manager of Panasonic Appliances Washing Machine (Hangzhou) believes that, the market demands have not been fully unleashed but will be as people’s healthcare awareness grows. Standalone dryer outperforms the washer-dryer combo in terms of drying performance as well as bacteria removal effect. Panasonic will step up investment in the R&D and promotion in standalone dryer down the road.
“BSH remains bullish on the potential of dryer in China with or without the outbreak. That’s why we invested in our Chuzhou-based dryer factory last year. As the second dryer factory of BSH globally, it is scheduled to come on stream in the first half of 2021. We will step up the R&D and production of dryer to meet the rising demands of Chinese consumers.” Zhang Yuan says.
Dryer makers are not alone. Mainstream distributors are also actively promoting the product. Gome, a leading home appliance retailer, has been doing this in the past five years. Jin Liang points out that, the impact the outbreak has on dryer market will be limited. The market still needs years to grow. “Currently the penetration of dryer in China is less than 1%, far less than the 65% of Europe and 90% of North America. The reason is that Chinese consumers have not fully develop the awareness. As a product that highlight experience, its promotion cannot be done solely by manufacturers. Distributors could act as a bridge and deliver more information to educate consumers.”
At a high price, dryer is not so accessible for consumers in China. “The price of a dryer and the price of a washing machine is almost 1:1 in Europe. But when I took over the dryer division five years ago at Gome, that price difference was around 3:1 in China, which, with no doubt, scared away consumers.” Jin Liang tells me that, he is excited to see that Midea and Haier adjust their pricing of dryers during the pandemic. “Heat pump dryer has been sold at more than 6500RMB before the outbreak. But now, Midea set one of its dryers at 4990RMB, a very strong pricing strategy.”
I notice that, washer-dryer combo, a high-end product of the washing machine sector, also sees rising sales in recent years, accounting for 40.4% of washers sold offline and 25.7% online in 2019, according to All View Cloud. During the outbreak, a number of consumers turn to this product, which could boost up a new wave of sales.
Many industry insiders have confidence in the prospect of combo considering its advantage over standalone dryers in terms of price as well as space. But there are disagreements too.
Jin Liang points out that, combo is no match for standalone dryer when it comes to drying capacity, efficiency and effect. “We have done a survey regarding this. The result showed that, less than 10% of buyers still use the drying function of a combo after purchasing it for three years. I believe it means the consumer experience of combo is not as expected.” Jin Liang believes that, combo is a transitional product for Chinese consumers, and industry players would love to dive into a market same size as the current washing machine market when the penetration of standalone dryer are as high as Europe and North America. He believes this also requires enterprises to sacrifice interests as combos are currently on fast rise.