As of April 23, multiple institutions, including Ovi Cloud, have released data on the home appliance market for the first quarter of 2023. During this period, reporters from Beijing Business Daily also visited major stores and interviewed stores and consumers. It is not difficult to see that although the home appliance industry has experienced a commendable recovery, it has not yet reached the level before 2019. At the same time, the performance of segmented tracks is different, and emerging categories emerge endlessly. However, the trend of high-end and nested products has not changed. Seeking growth in the "Red Sea" is undoubtedly a greater test for enterprises.
In the first quarter of this year, although the domestic home appliance market is still in a declining state, the recovery trend is faintly visible. Excluding 3C products, the retail sales of the home appliance market in the first quarter were approximately 155.4 billion yuan, a year-on-year decrease of 3.5%. However, the decline was mainly concentrated in January, with a decline of 23.9%. In February and March, the year-on-year growth was 28.1% and 0.8%, respectively.
Another sign of recovery is the gradual recovery of the offline market. During the pandemic, consumers stayed at home for a long time, resulting in a rapid shrinkage of the offline market. Prior to 2020, the retail sales in the offline market were higher than those in the online market for a long time; In 2021, online and offline retail sales will be evenly divided, accounting for 50% each; In 2022, online sales surpassed the offline market for the first time with a proportion of 54.4%. However, in the first quarter of this year, the two channels remained stable again, and it is expected that the offline market will form a counter surplus after that.
Beijing Business Daily reporters visited offline home appliance markets such as Suning and Gome and found that there has been an increase in traffic compared to the same period last year. However, some businesses have revealed to reporters that the true peak of shipment has not yet arrived.
A salesperson from Haier washing machines told Beijing Business Daily that the true peak of offline purchases would have to be during the "May Day" holiday or an important milestone like "June 18th".
The salesperson stated that during the May Day holiday and June 18th period, most of the discount plans for home appliances come from manufacturers or higher-level distributors, and the discount intensity is obviously greater. Other promotions at other time points are more organized by the mall as coupons, such as returning 500 yuan consumption coupons to consumers after purchasing 1000 yuan or how much value is stored, and then giving consumers rebates or discounts. This kind of discount feels more like a means of diversion, It's not as powerful as the price reduction of real gold and silver.
Some consumers have also expressed similar views towards Beijing Business Daily reporters. Mr. Zhang, a consumer, said that the centralized promotion season for home appliances is more convenient for comparing goods with three stores, and it can be confirmed that the promotion efforts are not small.
Home decoration demand
Indeed, the consumption season can ignite the enthusiasm of customers and businesses, but for the entire home appliance market, it still relies more on home decoration demand.
From the perspective of the overall market size of the industry, the demand for home decoration showed an upward trend from 2016 to 2020, but decreased after 2020. With the gradual relaxation of epidemic control, the home decoration market will also recover. It is expected that the market size of home decoration will be about 2.85 trillion yuan in 2023.
Industry perspectives point out that home decoration demand is the main purchasing motivation for consumers. According to survey data from Ovi Cloud, in 2022, 47% of homebuyers aimed to replace their homes, 24% of homebuyers bought their homes for the first time, both of which are aimed at self living and are the main groups for purchasing household appliances. Other home purchasing behaviors do not attach too much to home decoration demand. For example, 15% of the group aimed to invest, and 9% of the group registered for school districts, It is difficult to have a significant promoting effect on the shipment of household appliances.
Household appliance industry observer Xu Yiqiang pointed out that the promotion season is more about driving the shipment of some small household appliances. However, for traditional white and black appliances such as refrigerators, color TVs, and air conditioners, the importance of the home decoration market is irreplaceable because only large products have higher prices, supporting the sales of the household appliance market. On the other hand, small household appliances are in a state of "high quantity but low value".
From a data perspective, the shipment volume of air conditioners, washing machines, and color televisions in the first quarter of this year was approximately 10.67 million units, 7.04 million units, and 7.44 million units, both of which were far lower than the 66.53 million units of small household appliances. However, in terms of retail sales, the air conditioning category contributed nearly 40 billion yuan in retail sales, with approximately 22.6 billion yuan for color TVs, 19.8 billion yuan for refrigerators, and only 13.6 billion yuan for small household appliances.
Nesting and integration
It is worth noting that the demand for home decoration has driven the growth of bundled household appliances.
According to the latest statistics from IDC, the shipment volume of smart home devices in China reached 220 million units in 2022, with a slight increase compared to the same period last year. The sales volume of the whole house smart market will exceed 10 billion yuan, and it is expected that the compound growth rate will reach 46.9% in the next five years.
Senior industrial economy observer Liang Zhenpeng pointed out that the most obvious advantage of bundled home appliances is to enhance user experience. In today's consumer market, it is no longer the logic for businesses to meet consumer demands, but the logic for businesses to actively create demand. By using bundled home appliance products to set up scene spaces in offline stores, it can further stimulate consumers' purchasing desire.
Accompanied by the integration is the diversification of product functions, where different functions are combined to break through the original boundaries. For example, in the context of the decline in traditional color TV shipments, the game TV segment is growing against the trend and its proportion in the television industry is constantly increasing. From 2021 to the first quarter of this year, its proportion was 5.3%, 15.4%, and 20.4%, respectively.
In addition, the retail sales of integrated dishwashers have also achieved rapid growth compared to traditional desktop and sink products. In the first quarter of this year, the online market of integrated dishwashers increased by 84.7%, while the offline market increased by 54.8% year-on-year.
Liang Zhenpeng believes that the change of household appliance integration has also affected the sales channels. In the past, online channels were dominated by JD, Taobao, and Tmall. Now it is not difficult to find that Tiktok, Xiaohongshu and other channels have come from behind. The influence of live broadcast is indispensable. Compared with traditional online retail, live broadcast with goods provides consumers with a stronger sense of presence and experience.
The black home appliances that meet entertainment needs are also integrated and useful. Nowadays, the color TV market has shifted from pursuing size and image quality to a complete set of entertainment intelligent solutions.
Recently, at the "Yunqi Future · Vision Promising" Large Screen Interactive Innovation Forum, Huang Haihua, General Manager of Beijing Shiguo Technology Co., Ltd., introduced to reporters from Beijing Business Daily that the company's turnkey solution for smart TV systems, including customized launchers for operators, SDK and API access for video content, smart TV operation backend systems, and hardware products, can help radio and television operators achieve intelligent Ip transformation through integration.
Experts believe that it is certain that the current home appliance market is moving towards the Red Sea. After several rounds of home appliance migration to the countryside, the market gap is gradually filling up. Now, enterprises need to work diligently and strive to open up new growth opportunities.