Until 2019, revenue for household appliance stores in China increased by 11.6% year-on-year to $ 309.7 billion. The sector’s profitability is boosted to 8.7% of revenue in 2019. Revenues in the small household appliances segment amount to 45.542 million US dollars in 2020. The small household appliances segment is expected to show 1.6% revenue growth in 2021. In global comparison, most revenue is generated in China.
In this period since many people have stayed at home to contain the spread of COVID-19, they have more time to indulge in food and housework, stimulating the consumption of small household appliances.
As a matter of fact in February, according to data from Suning.com China’s major online retail platform of home appliances, sales of electric ovens increased 280 percent, air fryers increased 659 percent and electric lunch boxes increased more than 26 times over the same period last year.
The contribution of e-commerce to the domestic consumption of household appliances in China has grown to record levels. The increase in e-commerce channels in China is supported by their convenience, in terms of :
- product comparison and home delivery,
- various product offerings,
- competitive prices and
- the ability to reach consumers who do not have easy access to other channels.
Chinese consumers increased their appliance costs in 2019 with over 40% of orders placed online. E-commerce is making a very important contribution to sales, in fact, compared to 2018 its share rose to around 7.5%.
Without a doubt, this is an excellent opportunity for foreign companies that want to expand small household appliances in the Chinese market.
Consumer Trends and Purchasing Habits
The Chinese market has a strong demand for household appliances and small household appliances. Consumer brand awareness is increasing with more emphasis on design and functions, while price sensitivity is decreasing.
The demand for energy-efficient and environmentally friendly products is increasing as consumers are becoming more environmentally conscious. In the meantime, Premium appliances are gaining popularity in the market.
These are characteristics that have become the norm in the West, where energy efficiency and hygiene standards are highly regulated and developed. In addition, middle-class consumers rely more on foreign-branded products, resulting in easy integration into the existing market.
Smart functions have been one of the most important developments in the market. Consumers prefer products that are compatible with smartphones or that can be controlled remotely or with the ability to automatically detect external factors such as heat or pressure and adapt accordingly.
How to enter China’s Small Household Appliances market?
A foreign company that wants to enter the Chinese market has to follow some important steps. GMA offers several services to help you to create and grow your brand in China.
Branding strategy is a crucial phase in creating an evocative and popular brand. Especially in China, a good Branding strategy will lead your company to build a prestigious and high qualitative image that can help you overtake local brands and gain a competitive edge over foreign competitors.
- Online Presence: SEO, SEM
Your marketing effort should be focused on the digital, you want people to hear about your brand and your values. Chinese consumers are extremely connected and have this habit of looking up online for information.
To start with, create a website in the mandarin language. It will have to be hosted on local servers. These 2 details are extremely important for your SEO ranking. The most used search engine in China is Baidu with close to 70% of the users using it for their research. In short, you won’t be able to rank if you have a foreign language website hosted on a foreign server.
A key operation is the optimization of search engines (SEO). The more you sell, the higher the search results appear. Businesses should invest in SEO and buy keywords based on “pay per click”. The higher the price of a keyword, the higher your products will appear in search results. And the more you sell, the more you position yourself at the top. It is essential to participate in online sales events or industry-specific events such as food weeks.
Take advantage of Baidu SEM tools. When it comes to search engine marketing, Baidu still maintains the largest share. Advertising on Baidu is necessary to bid on competitive keywords and pay on a PPC basis. Baidu is the first choice for an advertising campaign to reach Chinese consumers.
- SOCIAL MEDIA
There are several social media platforms in China to sell small-household appliances. The most important are :
WeChat is an indispensable social media platform that Chinese consumers use to follow and interact with their favorite brands. With over 1 billion users, WeChat is a unique portal where users can access an infinite number of third-party services such as paying bills, sending money to friends, buying movie tickets, or even ordering dry cleaning.
WeChat offers a completely seamless, mobile-first consumer experience where brands can increase awareness and loyalty.
It offers many possibilities to brands, in fact, it gives the possibility to create verified official accounts, useful for interacting with followers and for keeping them updated on brand news. In addition, WeChat offers so-called mini-programs, small apps inside the WeChat system that cover various functions, such as e-commerce, games, and much more.
Several famous brands, like Dyson, Haier, Midea, are using this channel to promote their brand’s value and products.
Store owners attract customers by promoting their store on the WeChat Moments feature, which allows users to post updates to friends.
Sina Weibo is another essential social media platform with its user base nearing 500 million users. Chinese social media Weibo is a microblogging platform used to gain information and discover interesting stories relating to the latest trends or entertainment. In comparison to WeChat, Weibo has a lot more hands-on channels, including posting comments, music, live streaming, and e-commerce. This platform has seen substantial growth with its multimedia content consumption and popularity of short videos.
Sina Weibo (新浪微博) is a Chinese microblogging website similar to Twitter. Launched by Sina Corporation on 14 August 2009, it is one of the biggest social media platforms in China, with over 445 million monthly active users.
Weibo is important for several reasons:
- increase in brand awareness
- boost on events and / or promotions
- referral to e-commerce platforms through external links
- starting collaborations with Key Opinion Leader
- exploitation of word of mouth (word-of-mouth diffusion)
That’s why it is a good chance for foreign brands to increase their sales and brand awareness. Many brands have chosen to have an account on Weibo as they understand the importance of this platform.
TikTok, locally known as Douyin, is a short video and music app that was launched in 2016. Since then, the social media platform has accumulated 500 million active users globally. TikTok allows users to add music and effects to their videos with very powerful editing tools. This platform has the opportunity of becoming a truly global leader in the short video market and is one of the first Chinese apps to successfully gain worldwide attention.
Mini-videos are gradually pushing other types of communication out of business. They allow a direct and impactful message, showing the brand’s creativity and involving users. For this reason, the new social network is the perfect way to reach potential consumers. There are two ways that allow companies to increase brand awareness on Douyin: advertising or collaborations with KOL (Key Opinion Leader or Influencer).
The photo below shows how Dyson has invested in KOLs with appliance experts to promote its brand.
The platform is also very useful to explain the functioning of some products, to get in closer contact with consumers, and to offer an additional service.
Key opinion leaders are powerful people and Chinese social media. They are well trusted by internet users and a partnership with a goal that is a good fit for your products and values could mean an immediate gain of popularity and people starting to get interested in your brand. You can work with them throughout diverse channels and a variety of campaigns from a review, to product placement, to banners, videos. It will depend on both your budget and your products.
Sell Your Small Appliances on Chinese Ecommerce Platforms
The importance of eCommerce for this market is non-negotiable. in 2020 more than 80% of furniture and home appliances purchases are done online. Even Ikea opened a Tmall store recently.
Cross-border e-commerce is widespread in China and 26% of cross-border consumers are very frequent buyers. Cross-border e-commerce is the purchasing of products online from international retailers that don’t have physical stores or a business entity in China.
This type of shopping works because the Chinese middle class wants items not found in China. Furthermore, there is the perception that the products are of higher quality and authentic.
There are lots of e-commerce marketplaces in China such as :
Suning Commerce Group Co., Ltd. principally operates franchised retail shops of electronics appliances in China. The Company mainly offers color televisions (TVs), audio and video (AV) players, disc players, refrigerators, washing machines, digital and information technology (IT) products, small household electronics, air conditioners, telecommunications products, and other products. Its e-commerce platform ranks among the top three Chinese B2C companies.
Definitely an option you want to look at.
Tmall.com (天猫) is a Chinese-language website for business-to-consumer (B2C) online retail, spun off from Taobao, operated in China by Alibaba Group. It is a platform for local Chinese and international businesses to sell brand-name goods to consumers in mainland China, Hong Kong, Macau, and Taiwan.
It is the biggest Chinese eCommerce platform. It is highly trusted by customers and difficult to enter as requirements are strict. If you are a small brand we strongly suggest you avoid Tmall. On the contrary, if you have the resources and you are ready to invest in Branding, then you should totally go for it.
Selling on Tmall means joining the largest B2C retailer community in Asia: Tmall has 61.5% of the market. Managing this marketplace allows you to reach over half a billion potential customers, which you regularly buy on the web. In China, 82% of the population that accesses the internet is shopping online.
It is an important platform to sell small-household appliances, in fact,70% of users on Tmall Global are between 24 and 32 years of age, who are the largest consumers of electrical appliances. Due to these reasons, many brands like Midea, Dyson, Haier, and Supor, are using this platform to sell their products.
Jingdong (JD.com) is also known as formerly called 360buy. It was founded by Liu Qiandong in 1998. Jingdong is one of the largest e-commerce platforms by transaction volume and revenue in China, headquartered in Beijing. Jindong is also a member of the Fortune Global 500, additionally, this platform nowadays is a major competitor to Alibaba-run Tmall. It belongs to Tencent which also owns WeChat. The platform was recently outranked by Pinduoduo and in an effort not to lose more market share the app has launched in April 2020 its own version of mini-program allowing brands to offer additional services such as appliances cleaning or reparation.
JD is mainly known for its electronic and appliances focus. If you have enough budget, definitely an option to consider when selling small household appliances.
TOP SMALL HOUSEHOLD APPLIANCES BRANDS IN CHINA
The Chinese small household appliances market is highly competitive with domestic companies dominating the market.
Major Players are :
- Haier Group Corporation
- Aux Group
- Gree Electric Appliances Inc.
- Aucma Co. Ltd
- Midea Group
There are reasons these brands dominate the Chinese small household appliances market :
- They are not shy when using digital marketing campaigns.
- Release new products regularly.
- Work on their distribution networks.
- Use branding and quality product to maintain their brand reputation.
- Maintaining strong competition in almost every part of the country.
- Make full usage of Internet and eCommerce.
Do you want to know more about the Small Household Appliances market in China? Contact GMA a digital marketing agency, specialized in the Chinese digital market.
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