Building Product Strength for Small Home Appliances Enterprises: From Product Export to Manufacturing Export

Since 2023, the prosperity of China's home appliance export has significantly increased. Especially in the second half of the year, with the gradual increase in demand in the overseas home appliance market, the decline in inventory has driven a significant trend in the recovery of home appliance exports.

According to data from the General Administration of Customs, in November 2023, China's exports of household appliances reached 33.1816 million units, a year-on-year increase of 24%; In the first 11 months, a total of 3387.168 million units were exported, a year-on-year increase of 9.6%. Experts believe that with the end of destocking in developed economies and a decline in inflation, the effect of restocking is gradually becoming apparent. The recovery of overseas market demand is driving China's home appliance exports, and it is expected that home appliance exports will continue to be prosperous in 2024.

Make efforts in overseas markets

"Previously, orders were made through outsourcing factories, but production capacity gradually fell behind sales growth. In September 2023, we officially started production at our self built intelligent manufacturing factory, with a total area of 51150 square meters and 12 floors. Currently, the monthly production capacity can reach up to 300000 units. At the same time, the second phase of the factory is also under planning and construction, and it is expected to be delivered and put into use in May 2024," said Cheng Fei, Senior Vice President of Stone Technology, "During the overseas' Black Five Net One 'period in 2023, Stone Technology's GMV (total commodity trading volume) in North America increased by 30% year-on-year. Even with its own factory, production pressure is very high, and coupled with the production capacity of contract factories, there is still a shortage of supply. According to the third quarter report of 2023 released by Stone Technology, the company achieved a revenue of 5.689 billion yuan in the first three quarters of 2023, a year-on-year increase of 29.51%.". Stone Technology stated in its report that the revenue growth was mainly due to an increase in new product sales and an increase in domestic and foreign revenue. "From a full year perspective, the company's overseas revenue accounted for about 58% in 2022, and the proportion will be even higher in 2023," Cheng Fei revealed.

In addition to stone sweeping robots, Chinese small household appliances with rapidly growing overseas revenue also have Jimi projectors. "At present, Jimi has established 4500 stores worldwide and has ranked first in the market share of Japan's home smart projection market for many consecutive years," said Guo Xueqing, Vice President of Jimi Technology. It is understood that Jimi has established overseas companies in the United States, Japan, Germany, Singapore and other places, and the coverage of overseas channels is constantly expanding. In addition to mainstream online channels such as Amazon and Lotte Japan, the company's products have also entered the main offline retail channels in regional markets such as Europe, the United States, and Japan. In the first half of 2023, Jimi Technology achieved overseas revenue of 350 million yuan, a year-on-year increase of 39.14%.

Not only sweeping robots and projectors, but in recent years, domestic small appliances have also gone global, and many brands have established themselves in overseas markets.

According to a research report from Nanjing Securities, in the second half of 2023, China's household appliance exports showed an accelerated recovery trend, with double-digit growth in export volume and export value of categories such as washing machines, hair dryers, and electric irons. The relevant person in charge of Midea Group stated that the overall overseas sales of household appliances remained stable in 2023, achieving double-digit growth in markets such as Europe, Latin America, and the Middle East. From a category perspective, exports of refrigerators, washing machines, small household appliances, etc. have all achieved double-digit growth.

According to a research report by Guojin Securities, looking ahead to 2024, export sales will still be an important growth pole for Chinese home appliance enterprises. With the support of technology, innovation efficiency, and overseas localization operations, category upgrades and market share increases are expected to continue. At the same time, replenishing inventory in the European and American markets and increasing demand in emerging markets also contribute to the continuation of the growth momentum of export sales.

Export sales growth is expected to continue

The reporter found in the interview that many home appliance companies have also begun to pay attention to overseas brand marketing, actively research local markets, get close to overseas markets, and continuously improve brand awareness and influence from the perspective of long-term interests of the company.

The head of a leading domestic smart projector company told reporters, "In recent years, the company has gradually expanded its offline channels based on the habits of foreign consumers. Currently, the offline channel expansion in Europe is progressing well, and the chain points of product coverage are constantly increasing. Especially starting from the third quarter of 2023, the company will gradually expand its offline channels in the United States, and will continue to expand its market to Southeast Asia, the Middle East, and other regions in the future."

He emphasized that the overseas market for home smart projectors is still a competitive blue ocean, but the cultivation of overseas offline channels is a long-term process. However, from the perspective of the company's long-term development and the improvement of brand awareness, it is necessary to layout offline channels.

In addition, there are also single category home appliance companies forming teams to go global and jointly explore high-end overseas markets. Taking robotic vacuum cleaners as an example, domestic related brands are currently thriving in overseas markets. Stones, Ecovacs, Chase and others have entered the top five category rankings in multiple hot markets such as Europe, North America, Asia Pacific, and Southeast Asia, becoming local industry leaders.

According to Lv Ming, an analyst at Open Source Securities, Chinese robotic vacuum cleaners mainly adopt a high-end strategy when going abroad, mainly promoting all base station products and competing with overseas brands in a staggered manner. "Our domestic independent brands are at the forefront of the industry in terms of navigation, obstacle avoidance, mapping, and cleaning capabilities. Overseas brands' high-end products are lacking, and their technological research and development are lagging behind. Therefore, when domestically produced high-end products with complete functions enter the local market, consumers are more willing to pay for them."

According to data from Magic Mirror Meiya, the first tier players of domestic sweeping robots mainly focus on the high-end market of "800+US dollars" overseas. From January to October 2023, various companies further strengthened their high-end overseas products, and their overseas market share continued to be seized by domestic manufacturers.

Ye Yindan, a researcher at the Bank of China Research Institute, believes that the overseas layout of Chinese home appliance enterprises is developing in depth, extending from production to the integration of research, production, and sales, and from terminal product assembly to the integration of upstream and downstream industrial chains. "In the past, domestic home appliance companies mainly entered the overseas mid to low end market with high cost performance products. Now, more and more rely on research and development to enter the mid to high end market. By continuously promoting innovation and efficiency improvement, they can improve their comprehensive competitiveness in the global market. It is expected that this situation will continue to occur in the coming years, upgrading the global industrial chain and promoting manufacturing globalization."