Source: Department of Information Consultancy of CHEAA
With covid-19 putting the world on hold in the first half of 2020, the global economy experiences a screeching halt and after that, a slow recovery. The black swan event changes the trend of global economy and upsets the dynamics of China’s home appliance industry. At a stage that features slow growth of new demands and an adjustment of development patterns, China’s home appliance industry has been hard hit by the sudden outbreak, but it gradually get back on track with a market demand rally following the effective coronavirus containment and the implementation of consumption boosting policies.
Production
China’s home appliance industry posted revenue of 1.03 trillion Yuan from January to September 2020, down by 6.53% year-on-year, and profit of 83.3 billion Yuan, down by 2.76% year-on-year, according to National Bureau of Statistics. The narrowed month-on-month decline indicates a significant recovery.
China’s home appliance enterprises have fully restored production. Of white goods, output of refrigerators, freezers and washing machines achieved positive growth on a year-on-year basis while output of air conditioners remained negative, according to National Bureau of Statistics. It’s worth noting that output of refrigerators and freezers surged significantly driven by rising overseas orders.
Domestic sales
While domestic retail sales of home appliances witnessed a slight decline in 2019, it got even worse in the beginning of 2020 due to the sudden outbreak of coronavirus. From January to September 2020, domestic sales value of home appliances came to 483.5 billion Yuan, with year-on-year falling rate narrowed by 16.1%, according to All View Cloud.
Category wise, air conditioner sector suffered the biggest plunge; refrigerator sector made one of the best-selling white goods; portable appliances, especially cooking appliances such as electric air fryers and grillers, cleaning appliances such as vacuum cleaners and electric mops, and personal care appliances such as electric hair clippers and massaging machines, gained increased popularity due to the stay-at-home lifestyle amid the outbreak. It’s worth noting that electric three-in-one ovens (microwave ovens, steamer and griller) and dishwashers achieved strong growth.
Channel wise, most categories (air conditioner, air purifier and garment steamer excluded) achieved positive growth at online channels from January to September 2020, while offline channel suffered the biggest plunge in recent years. From January to September 2020, most categories fell significantly in offline sales value, except for several products including electric three-in-one ovens (microwave ovens, steamer and griller) and dishwashers.
Exports
Exported home appliances from China posted value of 59.069 billion USD from January to September 2020, up by 9.1% year-on-year, while imported home appliances to China posted value of 3.122 billion Yuan, down by 7.7% year-on-year, making a trade surplus of 55.947 billion USD, up by 10.2% year-on-year.
In terms of white goods, refrigerators and freezers have been a highlight of home appliance exports, with 500L and larger capacity refrigerators up in both export value as well as volume throughout the year at an average year-on-year growth rate of 30%, and export volume of freezers on a rise. Exports of air conditioners maintained a growth in both volume and value starting Q2. Exports of washing machines haven’t fully stepped out of the sluggishness, but achieved a positive growth in August. Large capacity tumble washing machines stood out with a surge of more than 40% in both export volume and value from January to September 2020.
As to portable appliances, export value of vacuum cleaners maintained strong with a year-on-year growth of 17.6%; food processors at a growth rate of 18.4% year-on-year; electric fans at a growth rate of 16.6% year-on-year; electric ovens and grills at a growth rate of 14.3% year-on-year. It’s worth noting that electric hair clippers grew vigorously at 29.3% year-on-year in export volume and 58.6% year-on-year in export value from January to September 2020.
The exports of components have been sagging with a negative growth throughout the year due to the reduced manufacturing capacity of overseas factories amid the coronavirus.
Region wise, home appliance exports to North America, Asia, Europe and Oceania achieved a positive growth from January to September 2020 while that to Latin America and Africa remained a negative growth. Country wise, exports to major countries have been picking up with ASEAN countries stood out with a robust growth.
Outlook
With coronavirus prevention and control getting normalized, consumers’ confidence are gradually restored and home appliance channels get back to track. These, coupled with a warming real estate market, power the rebound of home appliance demands. Market data show that domestic market have been warming up starting Q3. It is believed that it will further recover as New Year comes closer and the year-on-year growth is expected to be within -10%.
As to overseas market, home appliance exports for 2020 have mainly been boosted by growing overseas orders amid coronavirus. The momentum is expected to maintain in the short-term. Plus, with Q4 being a high season of overseas sales, home appliance exports for 2020 is expected to go beyond anticipation and set a new record.