Source: Department of Information Consultancy of CHEAA
Economic recovery has been the key focus of China’s economy in H1 2021, but the growth rates, especially consumption growth, have been slowing down starting Q3 under the influence of a number of factors including COVID-19, flood, typhoon, tightened market regulation and power rationing. But with a complete industrial chain, China’s home appliance industry still received a large influx of overseas orders due to its role as a substitute for closed overseas factories amid coronavirus when global demand rallied. Thanks to this, the overall performance of export was better than that of domestic market despite the soaring cost of international shipping and raw materials.
From January to September 2021, China’s home appliance industry maintained the fast-growing trend of H2 2020 in export with an accumulative export value of 77.61 billion USD, up by 31.4% YoY, of which the growth rate for Q1, Q2 and Q3 was 68%, 29.3% and 10.6% respectively. While the export performance reached an all-time high, the growth rate of it has been declining on a month-over-month basis as a result of the following factors: (1) the strong growth made in H2 2020 that formed a high base for growth; (2) restraints on the supply end such as power rationing, production limitation and the high cost of international shipping; (3) the fixing of broken overseas supply chains; (4) declining global fiscal support to ease the influence of COVID-19. Excluding the influence of the high base factor, the growth rate was 43.4% compared to the first three quarters of 2019.
From January to September 2021, the growth rate of home appliance export kept slowing down in both value and volume starting Q2 under the influence of growing raw material cost, and the growth rate of export value was always higher than that of export volume. By category, the accumulative growth rates of export volume and value for large appliances came to 10.6% and 22.2% respectively from January to September 2021; the accumulative growth rates of export volume and value for portable appliances 18.6% and 35.5% respectively; the accumulative growth rate of export value for components 40.2%.
When it comes to regions, China’s home appliance export to all regions posted strong performance though the growth rate slowed down, of which developed economies acted as the main driver of growth. Specifically, home appliance export to the US amounted to 18.25 billion USD in H1 2021, up by 30.3%YoY; export to the EU and Great Britain rose by 37.4% YoY by value; export to Japan rose by 26.1% YoY by value; export to BRICS countries grew by 40.4% YoY by value; export to ASEAN countries grew by 29.3% YoY by value; export to West Asia and North Africa grew by 13.2% YoY by value.
To sum up, China’s home appliance industry shows strong resilience in the face of coronavirus-hit global market. On one hand, government bodies carried out targeted measures to stabilize trade situation while cut the red tape to help enterprises improve efficiency after conducted several rounds of surveys regarding exports. On the other hand, as overseas home appliance manufacturers suspended production amid coronavirus, China’s home appliance industry leveraged its complete industry chain to provide stable supply to consumers across the world as a country that resumed production earlier than other countries.
The accumulative export of home appliances from China is expected to touch 100 billion USD as of the end of the year. But the strong growth in H2 2020 coupled with the current situation where a large amount of consumption demands have been brought forward by coronavirus put great pressure on the growth of H2 2021.