Against the backdrop of the overall deep adjustment period in the home appliance industry, the washing machine industry in 2013 seemed somewhat calm. However, it can be confirmed that from the current level of industry development, enterprises are more in line with market changes, and the two are driving each other towards deeper development in a sticky manner.
The "2013 Chinese Washing Machine Market White Paper" released at the same time on the forum analyzed the sales data of washing machines in key cities across the country from 2012 to July 2013. The results showed that after a deep adjustment during the "cold winter period" in 2012, the washing machine market gradually achieved recovery growth, but overall market demand remained weak. With the upcoming implementation of new energy efficiency standards, washing machine enterprises still face many challenges in future market competition.
The washing machine market shows signs of recovery growth
Since 2012, with the expiration of multiple policies introduced by the government to stimulate domestic demand and the continuation of property purchase restrictions, the domestic washing machine market has entered a "cold winter period". After a period of adjustment, the industry has gradually transitioned towards stable development, and the market has been able to recover and grow. Data shows that from January to July 2013, the overall sales volume of washing machines in key cities in China was about 13.3 million units, a year-on-year increase of 15.78%, and a year-on-year increase of 23.70% in sales revenue.
In addition, cities at different levels have also shown restorative growth, with sales volume in first tier cities increasing by 16.06% year-on-year, second tier cities increasing by 14.38% year-on-year, and third and fourth tier cities increasing by 17.22% and 15.91% year-on-year, respectively. In the same period of 2012, among several major tier markets, except for a slight increase in the fourth tier city market, all other markets showed negative growth.
Regarding the overall performance of the washing machine market, Cai Ying, Deputy Director of the Resource Development Department of the National Information Center, analyzed that the recovery growth of the domestic washing machine market from January to July was based on the negative growth of the same period in 2012. Compared with the data in 2011, the overall growth of the washing machine market this year is not ideal, and it is still affected by real estate regulation, the withdrawal of energy-saving subsidy policies, and economic slowdown factors, resulting in overall weak market demand. But the higher sales growth than the sales growth also indicates that the market strategy effect of enterprises oriented towards high value-added products is more obvious.
In 2013, there were still some bright spots in the washing machine market, among which the growth of drum washing machines was more obvious. Data shows that fully automatic drum washing machines continued to maintain a good growth trend on the basis of 2012 growth, with sales volume and sales revenue increasing by 34.22% and 34.98% respectively year-on-year. In contrast, the sales volume of semi-automatic pulsator washing machines decreased significantly, with sales volume decreasing by 30.63% year-on-year and sales revenue decreasing by 23.98%.
Analyzing the reasons, since 2013, some companies have launched popular drum washing machines, which has also stimulated demand in the incremental market. In the competition with pulsator washing machines, drum washing machines have begun to have advantages, and their attention has always maintained a high level, showing a gradually increasing market trend, which is also the focus of competition among major manufacturers.
The market share of high-end washing machines has increased more significantly
With the deepening of product structure adjustment by washing machine enterprises and the continuous improvement of urban market consumption level, the growth momentum of high-end washing machine products has become more apparent. Data shows that from January to July 2013, the sales volume and revenue of high-end washing machines increased by 34.82% and 35.99% respectively, and their market share continued to rise for three consecutive years. Among them, from January to July 2011, their market share was 23.15%, and in the same period of 2012, their market share increased to 26.46%, reaching 30.81% by 2013.
From a more specific product perspective, high-capacity high-end washing machines are becoming increasingly popular. Data shows that large capacity washing machines weighing over 6Kg have shown a good development trend. The sales proportion of large capacity washing machines weighing between 6Kg and 7Kg has increased from 28.08% in 2012 to 35.20%, and the sales proportion has increased from 30.98% to 37.90%. Meanwhile, the sales proportion of washing machines weighing over 7Kg has increased from 14.98% in 2012 to 18.88%, and the sales proportion has increased from 18.30% to 23.42%.
With the acceleration of the pace of life, consumers have a higher demand for the capacity and efficiency of washing machines, and large capacity washing machines have gradually become the mainstream consumption trend in the market. According to statistics from Gome's retail terminals, the sales proportion of drum washing machines weighing over 7kg and 8kg has increased from 40.62% in 2012 to 52% in 2013 (January September). It can be foreseen that washing machines weighing over 7kg will become the mainstream product in the market demand for a period of time in the future.
Meanwhile, influenced by the energy-saving subsidy policy implemented until the end of May this year, the concepts of energy conservation and environmental protection have gradually taken root in people's minds, and first and second level high-efficiency washing machines have also begun to receive more attention from consumers. According to Lv Shenghua, the editor in chief of China Home Appliance Network, the new energy efficiency standard for washing machines, "Limit Values and Grades of Energy Efficiency and Water Efficiency for Electric Washing Machines" (GB12021.4-2013), will be officially implemented from October 1st this year. Compared with the current standard, the new standard has raised the requirements for the limit values of electricity and water consumption of washing machines by several steps. Although they all implement a 5-level energy efficiency classification, the specific requirements have been greatly increased, especially for drum washing machines. This means that the entry threshold for the washing machine market has risen accordingly, which will test the comprehensive abilities of washing machine enterprises in technology research and development, product structure adjustment, cost control, market layout and other aspects. The market pressure brought about cannot be underestimated. At the same time, the improvement of standards has also expanded the space for enterprises to compete in the high-end field.
Imported brands have a slightly connotative competitive advantage
In 2013, the brand competition pattern in the washing machine market also showed subtle changes. Although domestic brands had an overwhelming advantage over imported brands in terms of overall market sales proportion, imported brands highlighted their competitive advantages in terms of market share growth, product pricing, and other aspects.
Data shows that from January to July 2013, the proportion of domestic brand sales was 62.97%, compared to 64.73% in the same period last year, while the proportion of foreign brand sales increased from 35.27% last year to 37.03% this year. In terms of price, the average unit price of 4240 yuan/unit for imported brand washing machines is much higher than the average unit price of 2276 yuan/unit for first tier domestic brands. If we take the drum washing machine as an example, the average unit price of imported brands is 4240 yuan/unit, and the average unit price of domestic first-line brands is 3528 yuan/unit.
The price positioning with more competitive space led to a significant advantage in the sales proportion of imported brands in the washing machine market in 2013. Data shows that the sales proportion of imported brands increased from 46.44% last year to 47.77%.
In the long run, washing machine companies should enhance their overall competitiveness by simultaneously improving product quality and establishing brand competitiveness. In fact, the top three washing machine brands currently occupy an overall market share of 60.02%, and the top ten washing machine brands have already occupied 92.09% of the market share. This indicates a relatively high concentration of industry brands. From the perspective of product structure changes, the top three few brands are active in product innovation in high-end and intelligent directions. The technological innovation of leading enterprises also leads the overall technological upgrading of the industry. The achievements of innovation in multiple directions such as large capacity, energy conservation, water conservation, intelligence, cleaning, quietness, and antibacterial have been reflected to varying degrees in some newly launched products.
It can be foreseen that with the implementation of the new energy efficiency standards for washing machines on October 1st, leading companies with innovative research and development advantages will have a more advantageous position in competition. On the other hand, the strict requirements in the new energy efficiency standards will lead to technical and cost difficulties for some small and medium-sized enterprises, and the gap between different brands in the washing machine industry may widen as a result. After the policy of home appliances going to rural areas was withdrawn, which led to the previous round of market elimination, a new round of brand competition and survival of the fittest is beginning.
