Improving quality, efficiency, and driving force in the home appliance industry
2024-09-03
At the 2024 China International Big Data Industry Expo, audiences are learning about the functions of new smart TVs. Since the beginning of this year, the overall operation of China's economy has been stable, and policies and activities promoting the consumption of green household appliances through trade in have gradually been implemented in various regions. Coupled with factors such as the improvement of the export market, the cumulative benefits of the household appliance industry have maintained growth. According to data from the National Bureau of Statistics, from January to June 2024, the cumulative main business revenue of the home appliance industry reached 960.6 billion yuan, a year-on-year increase of 6.2%, and the total profit reached 90.5 billion yuan, a year-on-year increase of 14.1%. Several companies have reported good performance recently, with listed home appliance companies releasing their semi annual reports and multiple companies submitting reports on quality and efficiency improvement. On August 27th, Haier Smart Home released its semi annual report, which showed that in the first half of 2024, it achieved revenue of 135.623 billion yuan, a year-on-year increase of 3.03%; The net profit attributable to the parent company was 10.42 billion yuan, a year-on-year increase of 16.3%, and the profit growth rate continued to exceed the revenue growth rate. Haier Smart Home has firmly promoted brand high-end development through forward-looking layout and long-term investment, winning a competitive advantage. In the first half of the year, Haier Smart Home's Casarte brand ranked first in the retail market share of high-end categories such as refrigerators, washing machines, and air conditioners. In the first half of the year, Haier Smart Home's gross profit margin reached 30.6%, an increase of 0.2 percentage points compared to the same period in 2023. The increase in gross profit margin is due to Haier Smart Home accelerating its digital transformation, continuously promoting digital transformation in procurement, research and development, and manufacturing in the domestic market, and building a digital production and sales coordination system; By building a digital procurement platform in overseas markets to enhance cost competitiveness and improving capacity utilization through global supply chain collaboration. Midea Group's previously released semi annual report showed that its total operating revenue in the first half of the year reached 218.1 billion yuan, a year-on-year increase of 10%; The net profit attributable to the parent company was 20.8 billion yuan, a year-on-year increase of 14%. Midea's smart home business (ToC) and commercial and industrial solutions (ToB) achieved year-on-year growth of 11% and 6% respectively, while domestic and overseas revenue achieved year-on-year growth of 8% and 13% respectively, demonstrating strong momentum. Midea adheres to a development strategy that emphasizes both the ToC and ToB industries, accelerating the creation of new quality productivity and promoting industrial upgrading through technology. In the first half of the year, Midea's revenue from new energy and industrial technology was 17.1 billion yuan, its revenue from intelligent building technology was 15.7 billion yuan, and its revenue from robotics and automation was 13.9 billion yuan. In the field of industrial core components, Midea's household air conditioning compressors account for 45% of the global market share, firmly ranking first in the world; GMCC Meizhi Rotary Compressor won the first prize of the 2023 China Light Industry Federation Science and Technology Progress Award for its "Key Technology Research and Industrialization of High Adaptability Silent Variable Frequency Compressor" project. In the face of significant downward pressure in the television industry, some companies have achieved growth against the trend. In the first half of this year, TCL Electronics achieved a revenue of HKD 45.49 billion, a year-on-year increase of 30.3%; After adjustment, the net profit attributable to the parent company was HKD 650 million, a year-on-year increase of 147.3%. During the same period, Sichuan Changhong's operating revenue increased by 10.24% year-on-year; The net profit attributable to the parent company increased by 38.71% year-on-year. It is reported that in the domestic market, TCL Electronics seized policy opportunities such as the trade in of consumer goods policy and achieved a year-on-year increase of 5.4% in shipment volume and 21.1% in revenue in the first half of the year. The company further broke through the mid to high end market, with TCL TV shipments of 75 inches and above increasing by 33.2% year-on-year, and TCL Mini LED TV shipments in the Chinese market increasing by 120.1% year-on-year. Sichuan Changhong's domestic television business revolves around the policy of "benign operation", continuously promotes the upgrading of "intelligent manufacturing" capabilities, adheres to cost reduction and cost control, improves efficiency, and achieves significant loss reduction; The general equipment manufacturing business seized the market opportunity of further releasing the demand for compressors after the implementation of the trade in policy, increased the adjustment of product structure, increased the proportion of high value-added products, and achieved a year-on-year increase in profits. With the continuous recovery of overseas demand, the export momentum of household appliances in China is good. Customs data shows that in the first seven months of this year, China's cumulative export of household appliances reached 409.19 billion yuan, a year-on-year increase of 18.1%. The latest report from the China Chamber of Commerce for Import and Export of Machinery and Electrical Products states that the monthly export value of household appliances has reached new highs this year, with exports exceeding 10 billion US dollars for four consecutive months since March. In the view of Jiang Yaoping, former Deputy Minister of Commerce, China's exports of electronic home appliances have continued to grow in recent years, ranking among the top in the world. The market share and brand reputation continue to rise, product technology innovation is advancing rapidly, and the company's foreign investment and overseas layout are becoming increasingly mature and perfect. Since the beginning of this year, the hosting of major sports events such as the European Cup and the Olympics has driven the consumption of large screen televisions. Chinese TV giants are accelerating their overseas expansion, using their hard power to expand into international markets. Peng Pan, Executive Director and Chief Financial Officer of TCL Electronics, stated that TCL's TV shipments in Europe increased by 40.1% year-on-year in the first half of the year, and shipments in emerging markets increased by 4% year-on-year. Data shows that in the first half of 2024, TCL TV's global shipments reached 12.52 million units, a year-on-year increase of 9.2%; Revenue was HKD 25.914 billion, a year-on-year increase of 23.2%. Its television business revenue in the international and domestic markets was HKD 17.56 billion and HKD 8.35 billion respectively, with international market revenue being approximately twice that of the domestic market revenue. During the same period, driven by the marketing of European Cup sports events, Hisense Video's revenue in the European market increased by 20.06% year-on-year, becoming an important driving force for the company's overseas development. The relevant person in charge of Hisense Video stated that the company continues to promote its global brand and high-end structure upgrading strategy, and takes the opportunity of world-class event marketing to accelerate the upgrading of product structure. In the first half of the year, Hisense Video's overseas sales of 85 inch and above smart display terminals increased by 153.43% year-on-year, and the overseas sales of the U7 series, a globally promoted European Cup themed product, increased by 74.20% year-on-year. Regarding the trend of home appliance exports in the second half of the year, Zhou Nan, Secretary General of the Household Appliances Branch of the China Chamber of Commerce for Import and Export of Machinery and Electrical Products, analyzed that there was a decrease in orders on hand for enterprises in June. In addition, the export base in the second half of 2023 is relatively high, and the growth rate of home appliance exports will slow down in the second half of this year. However, it is highly likely that home appliance exports will reach a new historical high for the whole year, expected to exceed 120 billion. Replacing old with new and strengthening home appliances is a key area for promoting the exchange of old with new consumer goods. In March of this year, the State Council issued the "Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Trade in", followed by 14 departments issuing the "Action Plan for Promoting Consumer Goods Trade in". The relevant policies have been well received by consumers and boosted the confidence of home appliance companies in their development. The policy of exchanging old for new is conducive to further stimulating the innovation vitality of enterprises and achieving dual promotion of industrial upgrading and consumption upgrading Han Dong, General Manager of Rongsheng Cold GTM Department, stated that in recent years, Rongsheng has focused on meeting user needs, promoting technological innovation and product upgrades. In response to diverse living scenarios, Rongsheng has deeply cultivated WILL Fresh and IDP dual purification sterilization technology, and launched a variety of low-carbon, high aesthetic mid to high end products, winning market reputation. Making good products sell more widely and serve more consumers has always been a key focus of enterprise marketing. Rongsheng actively responded to the national call and launched the "trade in" activity for household appliances in June this year, covering the full range of Rongsheng refrigerators and freezers. Consumers only need to recycle their old household appliances through Rongsheng's designated recycling channels to enjoy exclusive trade in patches when purchasing new products. In addition, Rongsheng also provides users with benefits such as online lottery winning cars, ten-year warranty, and exclusive gifts. As of now, Rongsheng refrigerators have achieved nearly 10% growth in sales through trade in programs. Driven by multiple factors such as national encouragement and local government support, the effect of the policy of exchanging old for new consumer goods is gradually becoming apparent. According to the value-added tax invoice data, from April to July this year, the sales revenue of daily household appliances such as refrigerators and household audio-visual equipment such as televisions increased by 4.4% and 3.5% year-on-year, respectively, with growth rates increasing by 4.8 and 10.1 percentage points respectively compared to March. The improvement in retail sales of household appliances is further spreading to the production end. In late August, the offices of four departments including the Ministry of Commerce issued a notice on further improving the work of exchanging old appliances for new ones, proposing that all regions should coordinate the use of central and local funds to provide a trade in subsidy for individual consumers who purchase 8 types of household appliances with energy efficiency or water efficiency standards of level 2 or above, including refrigerators, washing machines, televisions, air conditioners, computers, water heaters, household stoves, and range hoods. The subsidy standard is 15% of the final sales price of the product. For products with energy efficiency or water efficiency standards of level 1 or above, an additional subsidy of 5% of the final sales price of the product will be given. Each consumer can receive a subsidy of 1 item per product category, with a maximum subsidy of 2000 yuan per item. According to the spirit of the Notice, each region independently determines the specific varieties of the above 8 types of household appliances. Encourage localities to provide subsidies for other types of household appliances based on local conditions and clarify relevant subsidy standards. For the home appliance industry, the introduction of new policies by the government to strengthen support for the trade in of old appliances is like a timely rain Jiang Feng, Executive Chairman of the China Household Electrical Appliances Association, stated that currently, with the increasing uncertainty in the external environment, the domestic home appliance market is under pressure, and enterprises are moving forward in overcoming difficulties. According to the overall data pushed by OvCloud, the size of China's home appliance retail market reached 415.6 billion yuan in the first half of this year, a year-on-year decrease of 3.6%. Jiang Feng analyzed that the domestic home appliance market has entered a stage of equal emphasis on both incremental and stock, and there is huge potential for the upgrading and replacement of traditional household appliances. In the first half of the year, policies and activities promoting the exchange of old appliances for new ones and the consumption of green appliances gradually came into effect. However, the real estate market is in a period of adjustment, and the demand for new home appliances needs to be further activated. The new policy is targeted, with a significant increase in the subsidy amount for exchanging old appliances for new ones, an increase in subsidies for green products, and a greater range of choices for consumers in the subsidy scope. This will effectively promote home appliance consumption, unleash domestic demand potential, and help promote high-quality development of the home appliance industry. Enterprises should seize policy opportunities, focus on innovative supply, and better meet consumer needs with green and intelligent products. (New Society)
Edit：Xiong Dafei Responsible editor：Li Xiang
Source：Economic Daily
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