Research and Markets: According to the China Household Electrical Appliances Association, Total Output Growth in 2008 Decreased From Over 26% In 2007 To 14% In 2008

The pace of domestic electrical appliances production slowed in 2008, affecting supply at the retail level throughout the year. According to the Ministry of Industry and Information Technology, the total production output of home appliances decreased in the second half of 2008, mainly due to shrinking demand in exports. According to the China Household Electrical Appliances Association, total output growth in 2008 decreased from over 26% in 2007 to 14% in 2008. Sales of domestic electrical appliances were thus affected, registering 13% growth in 2008, down from 28% growth in 2007.

Relatively good news for manufacturers involved falling prices of raw materials such as aluminium, steel, copper and crude oil in 2008, which will contribute to lower manufacturing costs, and perhaps higher production capacity in strong performing segments. Small kitchen appliances enjoyed such growth due to the "Potato Effect" (where consumers consume a lot of potatoes during food shortages and/or economic crises). On this basis, consumers will continue to buy cheaper, more versatile staples even in recessionary times, while giving up on unnecessary items not used on a daily basis.

The Domestic Electrical Appliances in China report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data (2003-2008), allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, format trends or distribution issues. Forecasts to 2013 illustrate how the market is set to change.

Product coverage: large kitchen appliances (dishwashers, refrigerators, home laundry appliances, cooking appliances, microwaves) and small electrical appliances (microwaves, food preparation appliances, small cooking appliances, vacuum cleaners, irons, hair care appliances, shavers, oral hygiene appliances, heating and cooling appliances)

Data coverage: market sizes (historic and forecasts), company shares, brand shares

Why buy this report?

• Get a detailed picture of the domestic electrical appliances industry
• Pinpoint growth sectors and trends and identify factors driving change
• Understand the competitive environment, the market's major players and leading brands
• Use five-year forecasts to assess how the market is predicted to develop

Executive Summary:

A mixed picture dependent on maturity

Growth is beginning to diminish as products such as fridge freezers become more mature. Still underdeveloped products include automatic washer dryers, and most small home appliances. Dishwashers was the most dynamic product type in both volume and value terms in 2005, albeit from a very low base. Products such as microwaves and irons, although seeing stable growth over the review period, are starting to show signs of maturity. Some products, such as air conditioners, are perceived as being saturated in large cities, but continue to witness vigorous growth in secondary cities and rural areas.

Manufacturers focus on products with wider margins

Due to the low level of sales in China compared with the traditional large appliances, small electrical appliances, such as personal care appliances, vacuums and irons, have not enjoyed much focus from manufacturers. However, the shrinking profit margin offered by traditionally popular products has forced manufacturers to move towards those products with still-low penetration, which offer greater potential for growth. However, different products face different obstacles, preventing quick investment.

A very low level of product awareness with regard to small kitchen appliances, low demand for vacuum cleaners, very low entry barriers for some other small kitchen appliances such as kettles, and surprisingly high concentration in personal care appliances, all contribute to a mixed future outlook for small electrical appliances.

Manufacturers seek to consolidate in face increasingly fierce competition

From refrigeration to air treatment appliances, from laundry machines to kitchen appliances such as microwaves, the process of large players acquiring their smaller counterparts is prevalent.

Apart from the already highly concentrated sales revenue, the volume shares of most product types tend to be dominated by the top players. Concentration is not only shaped by market forces, which favour the larger players, but the enthusiasm of the major electrical appliance groups for merger and acquisition activity. At least five such events occurred in 2004/5, having a profound impact on the market's structure.

Changing consumer lifestyles favour premium segment

As well as the movement of retail sales, manufacturers' activities were largely affected by changes in consumer lifestyles over the review period. 2005 was a year of new premium products, a trend evident across the market, especially in refrigeration appliances and home laundry appliances. With busier lifestyles many consumers are demanding home appliances with more features with which require minimal effort in usage. Meanwhile, Chinese consumers are more influenced the promotion of speciality chains, and are becoming new-product-friendly.

Sales shift away from large cities

While the small and mid-sized cities saw a high level of competition in sales of home appliances, sales of many electrical appliances remained small or negligible in rural areas over the review period. Such products include dishwashers, cooker hoods, microwaves, air conditioners, and almost all small home appliances. This situation is due largely to the lack of distribution network and purchasing power in these areas. Such regions offer potential for future growth, and are expected to see increased focus by manufacturers in coming years.

Stimulating demand Haier's chief task

Holding the largest domestic electrical appliances brand in China, Haier Group launched new products to stimulate demand and regain momentum in the saturated environment, including 3-door and side-by-side refrigerators, tumble dryers and cooker hoods. For increasingly saturated home electrical appliances, price cutting is also a frequently adopted strategy to maintain brand share, especially when product innovation is difficult to achieve. Most products, even small home appliances, suffered deceleration of value growth over the review period. To stimulate demand, manufacturers and retailers are utilising every method possible, including changes to packaging, product innovation and seasonal promotion, in order to encourage consumption.

Key Topics Covered:

• Executive Summary
• Production Slows in 2008
• Manufacturers Supported by Drop in Raw Material Prices
• Haier Goes Green As Official Sponsor of 2008 Olympics
• Midea Plans To Increase Its Production Capacity
• Home Appliances To the Countryside Programme Takes Off
• Despite Continued Economic Slowdown, Rural Penetration Will Boost Sales
• Key Trends and Developments
• Government Encourages Rural Consumption of White Goods
• 2008 Olympics Provides A Platform To Showcase Green Technology
• Energy Conservation Remains A Top Priority
• Market Indicators

Some of the Tables include:

• Table 1 Household Penetration of Selected Total Stock Domestic Electrical Appliances by Sector/Subsector 2003-2008
• Table 2 Replacement Cycles of Domestic Electrical Appliances by Sector 2008
• Table 3 Household Ownership of Durable Goods by Type of Household 2008
• Market Data
• Table 4 Sales of Domestic Electrical Appliances by Sector: Volume 2003-2008
• Table 5 Sales of Domestic Electrical Appliances by Sector: Value 2003-2008
• Table 6 Sales of Domestic Electrical Appliances by Sector: % Volume Growth 2003-2008
• Table 7 Sales of Domestic Electrical Appliances by Sector: % Value Growth 2003-2008
• Table 8 Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: Volume 2003-2008
• Table 9 Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: Value 2003-2008
• Table 10 Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: % Volume Growth 2003-2008
• Table 11 Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: % Value Growth 2003-2008
• Table 12 Company Shares of Large Kitchen Appliances 2004-2008
• Table 13 Brand Shares of Large Kitchen Appliances 2005-2008
• Table 14 Company Shares of Small Kitchen Appliances (Non-cooking) 2004-2008
• Table 15 Brand Shares of Small Kitchen Appliances (Non-cooking) 2005-2008
• Table 16 Large Kitchen Appliances by Distribution Format: % Breakdown 2003-2008
• Table 17 Forecast Sales of Domestic Electrical Appliances by Sector: Volume 2008-2013
• Table 18 Forecast Sales of Domestic Electrical Appliances by Sector: Value 2008-2013
• Table 19 Forecast Sales of Domestic Electrical Appliances by Sector: % Volume Growth 2008-2013
• Table 20 Forecast Sales of Domestic Electrical Appliances by Sector: % Value Growth 2008-2013
• Table 21 Forecast Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: Volume 2008-2013
• Table 22 Forecast Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: Value 2008-2013
• Table 23 Forecast Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: % Volume Growth 2008-2013
• Table 24 Forecast Sales of Large Kitchen Appliances by Sector and by Built-in/Freestanding Split: % Value Growth 2008-2013
• Table 25 Sales of Refrigeration Appliances by Subsector: Volume 2003-2008
• Table 26 Sales of Refrigeration Appliances by Subsector: Value 2003-2008
• Table 27 Sales of Refrigeration Appliances by Subsector: % Volume Growth 2003-2008
• Table 28 Sales of Refrigeration Appliances by Subsector: % Value Growth 2003-2008
• Table 29 Sales of Fridge Freezers by Format: % Breakdown 2004-2008
• Table 30 Sales of Fridges by Format: % Breakdown 2004-2008

Companies Mentioned Include:

• Haier Group
• GD Midea Holding Co Ltd
• Zhejiang Shuaikang Co Ltd
• Wuxi Little Swan Co Ltd
• Galanz Enterprises Group Co
• Ningbo Fotile Kitchenware Co Ltd
• Guangdong Kelong Electrical Appliance Co
• Hefei Rongshida (Group) Co
• Nanjing LG Panda Appliance Co Ltd
• Hangzhou Deyi Electric Appliance Industry Co Ltd
• Matsushita Electric (China) Co Ltd
• BSW Household Appliances Ltd
• Samsung Electronics Co Ltd
• Hefei Meiling Group Co Ltd
• Shanghai Whirlpool Co Ltd
• Guangdong Jinling Electrical Appliances Co
• Changling (Group) Holding Co Ltd
• Guang Dong Macro Gas Appliance Co Ltd
• Shandong Xiaoya Electrical Appliances Co
• Shaoxin Putian Appliances Co Ltd
• Shanghai Hitachi Electrical Appliances Co Ltd
• Sakura Corp
• Aucma Group
• Yuli Electric Appliances Group Co
• Zhongshan Weili Electrical Appliances Co
• Beijing Baiye Appliance Ltd
• Zhejiang Supor Cookware Co Ltd
• Cai Bou Trading (Shanghai) Co Ltd
• Gillette Co, The
• Guangdong Nanhai Libang Electronics Co Ltd

For more information visit http://www.researchandmarkets.com/research/fa4613/domestic_electrica

Source: Euromonitor International

Research and Markets
Laura Wood, Senior Manager,
press@researchandmarkets.com
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716