Redefine the refrigerator model transformation or become an industry development opportunity

Looking back at China's refrigerator market in the past two years, under the dual pressure of continued sluggish market conditions and intensified brand competition, the survival of refrigerator companies has become increasingly difficult. Although the overcast cloud in the refrigerator market did not dissipate, some product segmentation areas showed different degrees of growth. In the face of such complicated market conditions, all refrigerator practitioners are pondering a question. Where is the next outlet in the Chinese refrigerator market?

May 26 guided by the China Household Electrical Appliances Association and the State Information Center, Information Resources Development Department, the national grid hosting, home appliances Jingdong exclusive channels in association with "redefining the fridge --2016 China's refrigerator industry trends conference Summit Forum" held in Beijing , Haier, Midea, Rongsheng, Meiling, Siemens Home Appliances, Casa Di, Samsung, Bosch Home Appliances, Panasonic, Sharp, Whirlpool, Xinfei, Hisense, Timor, Omar, TCL, Skyworth, Marshal, Huari, Rongshida, Wanbao, etc. At home and abroad, mainstream refrigerator brands, industrial upstream and downstream companies, and more than 60 representatives of the mainstream media such as today’s headlines gathered together to discuss the industry development context and consumer trends, and further explore the development direction of the refrigerator industry and future competition.

Industry Competition Reshuffle Accelerates Product Structure Continuous Adjustment

Affected by the macroeconomic situation and industrial environmental factors, the domestic refrigerator market witnessed a continuous decline in retail sales and retail sales in 2014 and 2015. In 2016, the Chinese refrigerator market showed no signs of improvement.

According to data from the National Information Center, domestic refrigerator sales fell 5.90% from January to April 2016, and sales decreased by 8.15% year-on-year. As the competition in the refrigerator market has intensified, the overall average price of domestic refrigerators has shown a downward trend. From January to April, the overall average price of refrigerators decreased by 4% compared with the same period in 2015. Among them, the average price of two refrigerators fell by 4.9%, the average price of refrigerators on the doors fell by 16.9%, the average price of three refrigerators decreased by 5.4%, and the average price of refrigerators with four or more refrigerators dropped by 11.4%.

Cai Ying, deputy director of the Information Resources Development Department of the National Information Center, said that from the overall average price trend of refrigerators, it can be seen that with the continuous upgrading of technology and the control of production costs, the average selling prices of various types of refrigerators have been reduced. On the other hand, the price trend also reflects the fierce competition in the refrigerator industry. In order to maintain market share, enterprises actively engage in promotions and price reduction activities are also an important reason for the decline in the overall average price of refrigerators.

In recent years, the gross margin of the entire refrigerator industry has declined, and from the financial reports of listed companies in 2015, most refrigerator companies' revenues and profits have also declined. At the same time, the cost reduction from the decline in the prices of bulk raw materials such as steel, copper, and aluminum, and the decline in international crude oil prices no longer existed. Big brands still have room to survive due to economies of scale, brand advantages, and technological R&D advantages. With the intensified price competition in the industry, the brand will face a severe test of survival.

The improvement of the access threshold for the refrigerator industry has also contributed to the industry reshuffle. It is understood that the newly revised GB 12021.2-2015 "Limits and Energy Efficiency Ratings for Household Refrigerators" is a mandatory national standard for energy efficiency and will be formally implemented on October 1, 2016. The improvement of energy efficiency standards will also accelerate the elimination of low-efficiency products. Some brands that do not have a competitive advantage will speed up their exit.

Although the competition in the refrigerator industry is fierce, with the changes in product structure, it has shown strong penetration in refrigerators such as door opening, multi-doors, air-cooling, frequency conversion, and intelligent. Jingdong Household Appliances' data shows that from 2014 to 2016, the proportion of refrigerators that open the door has increased from 14% to 22%, and the proportion of multiple refrigerators has increased from 3% to 13%.

Wang Lei, deputy director of the China Household Electrical Appliances Association, said that there are profound social reasons for the popularity of open doors, doors, air-cooled, variable frequency, and smart refrigerators. With the transformation of the middle class, the increase in wealthy families, and the consumption concept of the major consumers of refrigerators, the product structure of the refrigerator industry is also gradually changing. Refrigerator companies will face new challenges as they face challenges.

The real estate market will benefit from the continued expansion of the e-commerce platform effect

Although sales volume and sales volume of refrigerators for April-April 2016 show a “double down” status, the consumption space in the refrigerator market still exists. According to data from the National Information Center, from January to April 2016, the sales area of ​​commercial residential buildings nationwide was 32.315 million square meters, an increase of 38.8% year-on-year, of which commercial housing sales in April totaled 10.515 million square meters, a year-on-year increase of 45.9%. The real estate market's pulling effect on new household appliances consumption is still very obvious. The growth of commercial housing sales at the beginning of the year will continue to show the role of refrigerator consumption after a few months.

Cai Ying believes that the acceleration of real estate destocking at all levels of government, as well as the continued advancement of shanty towns and rural dilapidated housing renovation projects, will provide the refrigerator industry with a large number of new market demands, and the refrigerator market will have very significant incremental space in the future.

In addition to the opportunities brought by the adjustment of consumption structure and the increase of the real estate market, the channel change has also brought new opportunities for growth in the refrigerator industry. China Yikang data showed that during the May 2016 period, the retail sales of the online refrigerator market increased by 53.5% year-on-year, retail sales increased by 54.4% year-on-year, and all refrigerators in the refrigerator door went up, with retail sales of many refrigerators increasing by 105.2% year-on-year. The retail sales of refrigerators increased by 103.1% year-on-year, which was significantly ahead of industry growth. This is the main driving force for the growth of the online market.

According to Yu Haijun, general manager of Jingdong Household Appliances' Ice Wash Business Unit, the growth of the refrigerator online market will continue to be maintained. On the one hand, the product structure of the refrigerator line market is constantly being upgraded, with high-end and intelligent trends evident, and the development potential is huge. On the other hand, after the 1980s, consumers already accounted for 70% of Jingdong's refrigerators and gradually became the main online shoppers. Their strong spending power will promote the further upgrade of online refrigerator consumption.

In addition, e-commerce companies use the Internet to spread their advantages and have the power to gather consumers. They are changing consumer shopping habits. Compared with the offline market, the online e-commerce platform is more active. Through the creation of new shopping nodes and the use of big data analytics, the e-commerce platform can achieve greater precision marketing and guide consumer demand.

Carry out quality improvement action Industrial model transformation creates development opportunities

The refrigerator industry under the “new normal” faces multiple challenges such as slower growth of the market scale, implementation of new energy efficiency standards, and sluggish consumer demand. At the same time, changes in the external environment and related policies have also brought new challenges to the refrigerator industry.

In April this year, the General Office of the State Council issued the “Action Plan for the Implementation of the Outline for Quality Development in 2016”, which calls for special actions to improve the supply of consumer goods, focusing on consumer products that are of general concern to consumers. From the perspective of the state policy, it is imperative that refrigerators, as consumers' general concern, improve quality.

Jiang Feng, chairman of the China Household Electrical Appliances Association, believes that the quality improvement action reflects the importance of product quality at the national level and reflects the government’s determination to strengthen supply-side structural reform and promote the construction of a strong quality country. Carrying out quality actions will not only help improve consumer perception of domestic products, but also help China's refrigerator companies and even home appliance companies to increase their brand and product capabilities, and lay a solid foundation for Chinese manufacturers to go abroad to further expand their international markets.

In response to the predicament in the refrigerator market, companies have already conducted in-depth explorations in terms of product technology, sales channels, marketing methods, and other aspects, and even more subversive, there are mainstream refrigerator brands through cooperation with fresh e-commerce and other third parties. , boldly put forward the "hardware + services" business model, and even "hardware free", blowing a fresh breath to the refrigerator industry. At present, the business model of "hardware + services" is mainly to use smart refrigerators as a consumption portal, through the consumer food data to open up the entire family food supply chain, and thus derive a new kitchen ecological economy.

Faced with the opportunities and challenges of the Internet era, in addition to the "hardware + services" business model innovation, there are major refrigerator companies from the production and marketing links to carry out the order model of change and exploration. The C2B appliance customization model represented by the "zero inventory" and "T+3" customer order system changed the traditional production and sales chain of large-scale manufacturing, large-scale pressure-packing, and large-scale sales, and turned to customer demand-oriented. Through the Smart Connected Factory, we have transformed from large-scale manufacturing to large-scale customization to meet the individual needs of our customers.

With the development trend of cross-border integration, the boundaries between industries have become increasingly blurred. Business model innovation and industrial model innovation have brought unlimited imagination to the refrigerator industry.

Lu Shenghua, editor-in-chief of the China National Grid, said that it will take time to verify the effectiveness of the new model change. As the level of domestic consumption increases, people are more concerned about the improvement of the quality of life brought about by the product itself and the satisfaction of the service brought about by the consumption experience. Whether it is technological breakthroughs or model changes, it should be a beneficial exploration of enterprises to ensure the quality of refrigerators. In the future market competition, quality and brand are still the "talisman" for the survival and development of refrigerator companies.