By Zhou Lei
The last 10 years has been a decade of glory for China's home appliance industry. The home appliance industry as a whole has achieved rapid development, its industrial scale has expanded rapidly, substantial progresses have been achieved in environment protection, technologic innovations, and other aspects, and industrial layout and product structure have been optimized. In 2011, China's home appliance industry achieved an industrial output of RMB 1.14 trillion Yuan, increasing by 3.2 times over the RMB 269.12 billion Yuan in 2002.
China has become a major home appliance country
In the past 10 years, China's home appliance industry has achieved rapid development, its industrial scale has expanded rapidly, its competitiveness has improved significantly, and its status in the global home appliance industry has improved continuously; it has been a decade of golden development for the home appliance industry.
"In the past 10 years, I have witnessed the miracle of the home appliance industry's breakthroughs and leap-forward development", said Jiang Feng, chairman of China Household Electrical Appliances Association. In 2002 when China had just joined the WTO, the total output value of China's home appliance industry was RMB 269.12 billion Yuan, and the export value was US$ 8.75 billion Yuan, its volume equivalent to the sales value of a large multi-national company. In 2011, total output value and export of the industry had increased to RMB 1.14252 trillion Yuan and US$ 47.23 billion Yuan respectively, 4.2 times and 5.4 times of those in 2002.
In terms of manufacturing volume, China has become the undisputed home appliances manufacturing center of the world. Output of China's major home appliances has ranked among the firsts in the world for many years, and Chinese products have large market shares. In the white appliances sector, the export value of China's whole-unit appliances accounts for 30 percent of the global export market, small appliances maintain a 60 percent share of the global export market, and the market share of large appliances has also been increasing noticeably. In 2009, China's microwave ovens and air conditioners accounted for 75 percent and 57 percent of the global export market, compression refrigerators 30 percent, and automatic washing machines 23 percent. In the black appliances sector, China produced a total of 787.59 million TV sets from 2001 to 2010, selling 400.47 million units in the home market while exporting the rest 387.12 million units; of these TV sets, 283.92 million units were flat-panel TVs, with 109.27 million units sold at home and 174.65 million units exported.
In the rise of China's home appliance industry, leading enterprises have been playing an increasingly important role. China now has a number of home appliances enterprises whose sales value exceeds RMB 10 billion Yuan or even RMB 100 billion Yuan and whose production and sales of a single product have exceeded 10 million units. They not only dominate the Chinese market, but also possess significant shares in the global market. Among white appliances enterprises, annual sales revenue of Haier and Media exceed RMB 100 billion Yuan. In 2010, production and sales of Media's and Gree's air conditioners exceeded 20 million units, each accounting for 20 percent of the global total; production and sales of Galanz' and Media's microwave ovens exceeded 20 million units, each accounting for 25 percent of global total; production and sales of Haier's refrigerators exceeded 13 million units, accounting for 10 percent of global total; and production and sales of Haier's and Media's washing machines exceeded 10 million units, each accounting for 10 percent of global total. Among black appliances enterprises, Hisense, Changhong, TCL, Skyworth, and Konka, all of who had made their fortune by manufacturing TV sets, ranked among the top 20 of the electronic information industry, and their annual revenue have all exceeded RMB 10 billion Yuan.
Seize opportunities to explore the market
In the past 10 years, China's home appliance industry has managed to convert pressure into driving force and challenges into opportunities, seize market and policy opportunities, increase the volume of the market, and improve their strength
China's joining the WTO has enabled China's home appliance industry to extend beyond the home market into the global market. In the face of fierce international competition, home appliances enterprises have made active efforts to go abroad. They have not only managed to increase product export quickly, but also increased their efforts in overseas acquisition and foreign investment. Haier has been the bellwether in leading China's home appliance industry to go abroad. It now ranks 1st among global white appliances brands. In 2011, Haier's share in the global market was 7.8 percent, ranking first in the world for 3 consecutive years. Media's internationalization strategy has also entered the fast lane. It has established an oversea production base in Vietnam, acquired high-quality air conditioner companies in Egypt, Brazil, and India, and set up offices in Malaysia, Indonesia, and Thailand, and now it has basically completed its business deployment in the Middle East, Latin America, and other emerging markets.
The Chinese government's policies to expand domestic demands have presented valuable development opportunities to the home appliances industry. The government has introduced such policies and measures as "home appliances going to the countryside", "trade-in", and "energy-saving products and citizen-benefiting project" that aim to expand consumption. These have helped the home appliances industry to carry out strategic adjustment. Take the "home appliances going to the countryside" policy as an example, as of the end of August this year, a total of 269 million units of relevant products had been sold, achieving sales revenue of RMB 642.2 billion Yuan. The policy has provided great help for home appliances enterprises to explore the rural market.
Reform and upgrading accelerated
The home appliances industry attaches great importance to technology innovation and market promotion and makes great efforts to develop and popularize new products, improve the class of their products, and increase the proportion of high-end products; product structure has been improved and optimized.
In the black electric appliances sector, color TV products have successfully evolved from CRT to flat panel: currently, the market penetration rate of flat-panel TV is as high as 95 percent; the transitions from analog to digital, from standard resolution to HD, from one-way to two-way, and from 2D to 3D have been accelerated. In the white electric appliances sector, high-efficiency, large-volume, and multi-sector refrigerators, cylinder washer, fixed frequency and high-efficiency air conditioners, and various frequency air conditioners have become mainstream choices for upgrade consumption; the popularization rate of small appliances has increased; the development of small electric appliances that are suitable for Chinese consumers, including electromagnetic ovens, soybean milk machine, and electric pressure cooker, is in full swing with no sign of slowing down.
In order to promote the home appliances industry to be more innovation-oriented, China Household Electrical Appliances Association compiled China's first home appliance industry technology roadmap last year. Taking into account the demands of society and market in the future and based on analysis of the environment, problems, opportunities, and technology development trend of the development of the industry, the roadmap proposes specific development goals in such aspects as energy conservation, low carbon and environment protection, performance and reliability, product intelligence, and advanced manufacturing, with 2015 and 2020 being 2 key target years. Guided by this roadmap, the home appliances industry is working hard to build up technology innovation capability, tackle edge-cutting technology problems, and lay a solid foundation for the industry to become more competitive.
