How to hedge the export challenge of household appliances in 2023?

The cold winter is over, and the warm spring is coming. Under the background of the adjustment and optimization of epidemic prevention and control policies, and the further strengthening and deepening of consumption stimulus policies and real estate stimulus policies, the domestic household appliance market consumption in 2023 has ushered in a clear recovery signal, which is also strongly supported by the Spring Festival data of all major platforms.

However, unlike the obvious recovery of the domestic market, the recovery signal of the home appliance export market is still unclear.

The recovery signal is unclear, and the export pressure still exists

In the past year, China's household appliance exports have been under pressure due to the repeated epidemic, rising prices of raw materials, high inflation overseas and geopolitical and other adverse factors. According to the data of China Household Appliances Association, in 2022, the export value of China's household appliance industry was 97.25 billion US dollars, down 6.9% year on year. The latest export statistics of the General Administration of Customs also showed that from January to December last year, China exported 3.366 billion household appliances, down 13% year on year.

When the time comes to 2023, with the further optimization of epidemic control measures and the weakening of disturbing factors such as the rising price of raw materials, it is likely that the export recovery will be boosted by the adjustment and relaxation of entry and exit policies in many countries. However, the reality is that at present, the signal of the recovery of household appliance exports is still unclear due to factors such as inflation and geopolitical tension.

Taking air conditioners as an example, although the full liberalization of the epidemic has basically restored the production of various air conditioning enterprises, according to Li Xuefei, an industry online analyst, who analyzed and pointed out to the reporter of China Home Appliance Network, this is not directly beneficial to the recovery of the export of air conditioning products. Specifically, on the one hand, the energy crisis in Russia and Ukraine and the high inventory continue to erode the purchasing power of consumers, making China's air conditioning export growth in the European market have a greater impact. In addition, trade frictions between China and the United States have accelerated the process of the transfer of the air conditioning industry chain. Since the United States proposed to increase tariffs, China's air conditioning industry chain has responded rapidly and has been adopting the method of moving factories overseas to deal with exports. Some enterprises have taken Thailand as their trade entrepot center, or established manufacturing bases in Indonesia, Brazil and other countries, which will have a certain impact on China's air conditioning exports. Based on this, in view of the high inventory in Europe and the United States, and the lack of consumer confidence and many other challenges, Li Xuefei predicted that China's air conditioning exports would not be significantly improved in 2023, and the preliminary estimate would decline by about 3.5%.

"In the first quarter of 2023, the export recovery signal of China's home appliance industry was not obvious, and the export pressure remained". Luo Yuanyuan, director of the Information Consulting Department of the China Home Appliance Association, also told the reporter of China Home Appliance Network that the rapid appreciation of the RMB at the beginning of 2023, the reorganization of the global manufacturing industry chain and other factors had brought considerable pressure on the export of the home appliance industry. "It is expected that with the gradual recovery of the domestic economy, the gradual normalization of international business activities and the gradual digestion of overseas channel inventory, exports are expected to resume growth in the second half of the year, but it is difficult to return to the peak of 100 billion US dollars (104.4 billion US dollars) in 2021."

What are the opportunities under the challenge?

The spread of "anti globalization", the frequent changes in tariffs and export policies in recent years, the decline in purchasing power caused by high global inflation, and the change in consumer behavior will affect the growth of China's household appliance exports. So, how can Chinese home appliance enterprises effectively cope with these challenges? Under the challenge, what opportunities exist in China's home appliance export market?

In response, the relevant person in charge of Galanz told the reporter of China Home Appliance Network that although the impact of global inflation and other issues on the company's foreign trade business since last year still exists, many uncertainties in the post-epidemic environment also affect the company's channel development in the global market. However, Glanz, on the one hand, actively responded to national policies to adjust production capacity, on the other hand, was more active in "going out" and took the lead in "making friends". "At present, Galanz health appliances (microwave ovens, refrigerators, ovens, dishwashers and other household appliances) Foreign trade orders were placed in the second quarter of this year. Next, we will continue to cultivate the global market with independent brands and independent innovation; At the same time, it will respond more actively to the demand of global consumption upgrading, accelerate innovation and digital intelligent transformation, comprehensively promote capital increase and production expansion, layout a higher level and more efficient intelligent manufacturing of the whole industrial chain, and respond to the demand of the global market for integrated, intelligent, high-quality and healthy appliances. "

"At present, the global crisis is still continuing. In the future, the export situation in some regional markets is still grim." In the face of pressure and challenges, the relevant head of Whirlpool China analyzed and talked to the reporter of China Home Appliance Network. In 2023, Whirlpool will continue to promote the internal efficiency of the company, accelerate product research and development innovation, and match new products that meet user needs for different markets, Increase the re-development of ice-washing kitchen electrical products, and strive to achieve stable and good export business. Externally, since the opening up, it is reported that Whirlpool has conducted visits and discussions with customers in Taiwan, Japan, Uzbekistan and other countries, and actively expanded new projects and new categories of business. It can be predicted that the business exchanges between the company and various countries and regions will increase significantly in 2023.

In addition, in terms of market opportunities, the relevant head of Whirlpool China said that as a traditional manufacturing enterprise, the competition of home appliance products is still in a highly white-hot stage. "China is still the engine of global economic and trade development. I believe that through the holding of the Spring Festival Fair, AWE and various exhibitions, as well as the relevant strategic policies of the government actively supporting enterprises to actively go out, there are still many opportunities for China's home appliance exports in 2023," said the person in charge. He also further mentioned the overseas space potential brought by RCEP. "Since the implementation of RCEP, the company has been exporting to Japan, ASEAN and other regions, and the overall export situation is good. Especially for the 10 ASEAN countries, the population base is large, the overall regional economy is active, and the potential is large. This year will be our important regional market."

As he said, the Asia-Pacific market has always been an important target market for Chinese household appliances. According to the data of the China Household Appliances Association, in 2022, the export of China's household appliances industry to ASEAN continued its double-digit growth since March 2020, and the performance of electric fans, electric shavers, hair dryers and electric irons continued to shine. "Southeast Asia is the most potential consumer market for home appliances in the world. The middle-income countries of ASEAN, represented by Indonesia and the Philippines, are still in the stage of universal access to electricity. With a large population base, rapid economic development, and considerable room for the increase of population, they have become an important incremental market for the export of home appliances in China." Based on this, Luo Yuanyuan analyzed to the reporter that the continued and in-depth implementation of RCEP this year, It will further enhance the market competitiveness of China's household appliances in ASEAN countries.

In addition, the opportunity and potential of the Middle East market cannot be ignored. In 2022, driven by the sharp rise in energy prices, Saudi Arabia, the United Arab Emirates and other countries in the Middle East maintained high economic growth and demand. According to the data of the China Home Appliances Association, the export growth of China's home appliance industry to these two countries reached 6% and 17% respectively last year. At present, the regional conflict in the Middle East continues. However, in Luo Yuanyuan's view, the war and conflict will affect the local economic level, logistics and business activities in the short term, and export orders will also be impacted in the short term. However, with the end of the war and the continuous recovery of economic life, export orders will also recover. "Hisense is the official sponsor of the 2022 Qatar World Cup, and has also further expanded the recognition of Chinese brands in the Middle East. I believe that the Middle East market will still have potential in 2023, which is worth looking forward to."

In addition to accelerating the layout and coverage of overseas opportunity markets such as Asia-Pacific and the Middle East, some overseas regional markets are also paying attention to the dividends of online social e-commerce and live e-commerce that are rapidly releasing. According to eMarketer data, 102.6 million Americans will shop through social platforms in 2022, with an average consumption of $518, up 26.9% year on year. According to the data of Coreseight Research, it is estimated that the size of the North American live shopping market will reach 25 billion dollars in 2023. Live broadcast with goods also showed explosive growth in Southeast Asia and other markets. According to Omise's prediction, the market size of live broadcast e-commerce in Southeast Asia will reach 19 billion dollars in 2023.

After in-depth understanding of the overseas consumer market, the relevant person in charge of Galanz revealed to the reporter that Galanz is currently working on the e-commerce platform and social grass planting channel under the new marketing in the overseas market to promote the research and development and consumption guidance of subversive innovative products such as air-fried microwave oven, micro-steam baking machine, integrated retro household appliances, and other innovative products, and through market research and innovative marketing series of actions, to open up the minds of overseas consumers, Cultivate loyal brand users, and strive to transform from a powerful manufacturing supplier to a real Chinese intelligent manufacturing innovation brand.

Li Xuefei and Luo Yuanyuan also put forward similar suggestions. For example, Li Xuefei said that in the face of high global inflation and economic downturn, insufficient overseas demand, high inventory and other export pressures, household appliance enterprises such as air conditioners should not only continuously increase the proportion of their own brands, optimize the product structure, and promote product upgrading, but also strengthen the construction of online and other channels in order to cope with a more complex and volatile environment. Luo Yuanyuan mentioned that for some large electric enterprises such as air ice washing, active layout of overseas production bases can effectively reduce costs and lay the foundation for product localization. For small home appliance products, in the post-epidemic era, the global online channel of small home appliances is growing rapidly, the platform e-commerce dividend is decreasing, and the live broadcast e-commerce is gradually rising. Some new small home appliance categories and brands are expected to grow if they can actively use the overseas channel reform to build their own brands.