China’s smart home appliance market is expected to grow at an average annual rate of 45.3 percent between 2017 and 2022 and is likely to have a value of 162.7 billion yuan ($23.6 billion) by 2022, according to the internet statistics company Statista. People’s demand for household appliances has gradually shifted from large appliances like refrigerators and TVs to smaller products like vacuum cleaners and cooking machines. The demand for energy-efficient and environment-friendly products is also rising as consumers are becoming more environmentally conscious and more well-educated.
Prospects of growth of the smart appliances market in China
In 2021, China’s tech sector will focus on 5G and AI applications across all industries. These two key technologies combined with big data empower the Internet of Things, which is transforming the way we interact with our devices at home, at work, and throughout our cities. Revenue in the Smart Appliances segment is projected to reach US$7,937m in 2020. Revenue is expected to show an annual growth rate (CAGR 2020-2025) of 15.2%, resulting in a projected market volume of US$16,135m by 2025.
Household penetration will be 7.5% in 2020 and is expected to hit 21.6% by 2025. The average revenue per installed Smart Home currently is expected to amount to US$228.38. A global comparison reveals that most revenue is generated in China (US$7,937m in 2020)
Smart cities in China
China is reinventing its urban development taking “smart cities” as a reference. The paradigm is Xiong’an, a hyper-digitalized and sustainable city.
After the coronavirus crisis, China launches the economy with a gigantic development plan for smart cities, the connected cities of the future. It will be a huge bet.
According to Xu Xianping, former vice president of the National Commission for Development and Reforms, China’s main economic planning body, national investments in new infrastructure are expected to reach 17,500 billion yuan (about 2,200 billion euros) in the period 2020-2025, with a growth rate of around 21.6% per year.
Hu Qimu, a researcher at the China Digital Economy Institute, said that, compared to traditional ones, the new infrastructures will attract investments from more market entities, such as internet companies.
The plan for the development of “new infrastructures” that transform the current overcrowded and polluted Chinese metropolises into hi-tech, green, and more people-friendly paradises, in fact, provides for the use of a wide range of technologies: from the use of self-driving electric vehicles with recognition and warning systems, up to sustainable structures powered by green energy sources. And all connected thanks to 5G and ultra-fast fiber networks that enable new services.
E-commerce sales of smart appliances are increasing in China
Robot vacuum cleaners have become one of the most popular appliances in China last year, according to research released by e-commerce giant Alibaba Group.
During 2019’s online shopping festival, Suning.com, an e-commerce giant, saw the biggest sales growth of intelligent locks and smart speakers.
During the Tmall Queen’s Day in 2020, the sales of sandwich machines increased by 1500%, and the sales of air fryers increased by 659%.
The increase in e-commerce channels in China is due to their convenience, in terms of at-home delivery, diverse product offers, competitive pricing, and the capacity to reach consumers who do not have easy access to other channels.
Do you want to sell smart appliances in China? Here is what you have to do
Build a good e-reputation for your smart appliances’ brand
In China more than everywhere else the reputation of a brand is what will make the difference. Chinese consumers do not easily trust the new brand and don’t really like to take risks and buy a new product without knowing and being informed about it.
For an unknown brand with no E-reputation, the cost of getting visitors can be really high.
That’s why E-reputation should be the base of your marketing strategy, especially when doing e-commerce in China, whatever platform you choose.
In China, E-reputation is key to success. PR is a good way to build your credibility. Not only you are getting experts talking about you, but it also means backlinks from authority websites.
It is a basic of marketing where the right peoples talk about you and it’s also cost-efficient.
To strengthen your credibility use forums like Zhihu and Kols to talk about you.
Use Zhihu & Forums to educate Chinese Netizens on Smart Appliances
Zhihu is an amazing channel for Chinese people that want to find recommendations for products from other people and, at the same time is important for brands to explain product benefits.
Zhihu is a Chinese question-and-answer site like Quora. On Zhihu, questions are created, answered, and organized by its users. In Classical Chinese, “Zhihu” means “Do you know.” 20 % of users work in the tech sector.
The platform has an array of features that can be used to create and manage a community around a topic related to your brand. It is really useful for B2B.
Use these tools to engage with your audience and exchange information with them but also to build your author authority.
Here are some of these tools: Zhihu column/ Zhihu bookstore / Zhihu Roundtable /Zhihu live / Zhihu tip service.
Kols to influence consumers to buy your smart appliances
Many are normal users. Some of them, on the other hand, have gradually acquired such a reputation as to make them full-time jobs. Or they were already famous on other platforms and decided to hook up with this new trend. We are talking about the so-called Key Opinion Leaders, the Chinese version of Western influencers.
KOLs are always a great way to influence Chinese consumers to buy your products as they are seen as more loyal than the company’s advertising campaigns. They are also important in the smart appliance sector as they offer consumers an example of a wealthy lifestyle.
However, if a company wants to collaborate with KOLs, it must be very careful in its choice as not all KOLs are reliable and produce results for companies.
Is the right KOL for my brand? Is it in line with my core business and are its followers my target market? His followers are true or not? These are all questions that are difficult to answer. This is why GMA is here to help you choose the right KOL for your brand image.
We suggest your smart appliance’s brand go for an Omnichannel strategy to appear more legit in consumers’ eyes. Here’s a list of the more appropriate e-commerce platforms to sell smart appliances.
Sell your smart appliances on Tmall
Tmall is the leading B2C e-commerce site in China, with a 61.4% share at the end of 2018. It has 80.2 million monthly active users.
It is a generalist platform (it offers each kind of product from more than 100.000 brands) that focuses on the sale of branded products. You can find products of all kinds, from beauty to mechanics.
The brands are presented on Tmall in the form of graphically customizable flagship stores.
Tmall has a simplified payment process, where buyers don’t necessarily have to use a credit card. In fact, it is possible to finalize your purchase through the Alipay electronic payment system. Only original and verified brands are accepted.
Sellers have an excellent analytical tool and periodic reports on sales trends. Tmall often launches real shopping festivals to attract new consumers and stimulate sales. The most famous is Singles’ Day, which falls on 11 November and records some of the highest sales peaks of the year.
Jd.com can be a good alternative to Tmall
Jd.com, had a market share of 24.2% at the end of 2019 and 362 million active users. The most active age groups on the platform are those of the Millennials and Generation X, therefore young people under 40.
It is a generalist platform that focuses on the sale of products of all kinds, from fresh food to beauty, including electronics products
It stores sell and distributes directly to the final consumer thanks to its national shipping network
It is the site with the most accurate logistics system, with guaranteed deliveries in 1-2 days throughout the country. 85% of orders are delivered on the same day.
It is a guarantee of quality and it is linked to WeChat.
JD.com operates on the basis of two models:
-Pre-purchase of products from the supplier (B2B2C model). JD assumes responsibility for aspects such as international logistics, customs aspects, warehousing, product page design, marketing, and post-sale services. This mode is recommended for brands that are already quite well known in China. It also guarantees an excellent user experience for customers.
-Opening of a store for brands (marketplace model). In this case, it is the brand that directly opens its online store on the platform. In return, JD.com manages customer service, marketing infrastructure, and other types of services. Remember that JD.com charges vendors a fee for the services they offer and collects a commission on sales. The latter can vary from 2% to 10% depending on the product category.
Suning.com: China’s leader in household appliances
Suning Global is Suning’s leading platform dedicated to cross-border e-commerce. Launched in 2014, it currently features around 300 foreign shopfronts, and Suning, like Alibaba, offers its own integrated logistics service (4 aviation hubs, 12 automated pickup centers, and 660 urban distribution centers), as well as financial support services.
Among the main categories of best-selling products on the platform, we find household appliances and products for maternity and childhood. Suning Global is particularly used by users also for its multiplicity of payment options.
You can use their online payment escrow service or Yi-Pay to complete transactions in either RMB or foreign currency.
Enter the Chinese Smart Appliances market with GMA
At GMA, we can help you to optimize your E-commerce business, optimize the launch of a new product. We can:
- Choose the right online platform for your brand
- Launch and develop your e-commerce platform
- Build the best customer experience
- Improve customer service
- Develop a strong digital marketing strategy on Chinese social media