The Kitchen Appliances Market in China has performed well and shown improvements in recent years. The increasing urbanization rate in China is one of the drivers for the growing appliance market in China. The urbanization rate in China was 56.1% in 2015 and now it has reached 61% so the Urbanization rate is increasing by 1% every year which is driving demand for household as well as Kitchen appliances.
Compared to developed countries, the penetration rate of household appliances in China is relatively low. Hence, China has great potential in the household appliance market. In the next five years, the household appliance market in China will integrate cloud computing, Big Data, the internet of things, and other cutting-edge technology.
In the past, domestic brands in China’s household appliance market have focused on middle- and low-end markets while high-end markets were dominated by foreign brands. With the development of China’s living standards, domestic demand for high-end products is increasing, which will motivate domestic brands to launch more of these products over the next five years.
The demand for the Kitchen Appliances product is related to the real estate sector. More the number of households translate into more demand for kitchen and other household appliances. Since 2018, the tightening policy of China’s real estate market has significantly affected the performance of the household appliances market in China, including the kitchen appliance sector.
China is the leader in technology adaptation in the appliance product market. kitchen appliance consumers in China are more demanding of quality, appearance, and function. To fulfill their needs, companies in this sector have been dedicated to providing a variety of products with different functions and technology innovation. In terms of product intelligence, value-added functions such as Wi-Fi, intelligent reminder, and remote control are now applied in kitchen appliance products.
China has been on the frontlines both of post-COVID-19 economic recovery, and of the societal changes the pandemic has precipitated. Consumers increased their net purchase intention by the largest degree toward essential, health-oriented products, such as sanitary and health products, fresh food, and life insurance, while expressing negative net purchase intention towards non-necessities such as hair and beauty products, and large home appliances.
Key Market Trends
Appliance Penetration Rate In Tier 2 And 3 Cities Will Drive The Demand In Future
China has great potential in the household appliance market. The penetration rate of basics household appliances in China in tier 1 and 2 cities has reached 85%. While the penetration rate of household appliances in China in tier 3 and 4 cities is less than 50%, which indicates that households in these areas will be a major growth market for this industry. it is anticipated that demand for replacing appliances will be a major driver of growth in tier 1 and 2 so, the focus for tier-1 and 2 cities will be replacing current appliances, while in lower-tier cities it will be first-time purchases.
China Import Of Kitchen Appliance Is Very Low Compared To Its Exports
Compared to exports, imports in China’s household appliance market are very low, which is only 0.9% of domestic demand. Major imported products are dishwashers and electric stoves which occupy 55.7% of the total imported value. In the future, imports are expected to increase at an annual rate of 5.7%. However, imported products will continue to account for a small percentage of the domestic market due to the cultural and lifestyle differences in China. In addition, favorable government policies and the remarkable performance of domestic brands impede imports.
Competitive Landscape
Influenced by adjusting the policy of China’s real estate market and fierce competition among market players, the household appliance market in China has underperformed. Additionally, the gross margin rate of the kitchen appliances sector was over 40%. China is quite ahead in the technology adoption in the appliance segment. Various national and international players have their presence in the China Kitchen Appliance Industry. The Major players in the market include Midea Group, Hangzhou Robam Appliance Co. Ltd, Ningbo FOTILE Kitchen Ware, Galanz Group, Bosch, Haier, Hisense, Skyworth, Sichuan Changhong Electric Co., Ltd, and TCL Technology but, none of them has an absolute advantage. On the whole, because consumers value the brand, quality, durability and other factors of kitchen appliances higher than prices, price reduction competition is not the best competitive strategy for the kitchen appliance industry.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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