Exports of home appliances slow down and force companies to go to sea

Large corporations have stepped up overseas investment to build factories, and small and medium-sized enterprises have tried cross-border e-commerce. This is the latest situation that was reported by the "First Financial Daily" reporter yesterday from the 116th Canton Fair exhibitors and industry associations.

Export growth of household appliances dropped to 5%

Zhou Nan, deputy secretary-general of the Household Electrical Appliances Subcommittee of the China Chamber of Commerce for Electrical and Mechanical Products, told this reporter that the export of small household electrical appliances was good last year, and exports of small household appliances have declined this year for a variety of reasons. Some emerging markets have political risks; Indonesia's consumption tax and import taxes have increased; Saudi Arabia's energy efficiency standards have increased; and emerging markets have high stocks, so the overall growth rate is not very high.

"Last year, China's home appliance export growth rate was 8%, and it is estimated that the growth rate of home appliance exports will fall to 5% this year," Zhou Nan predicted.

From a global point of view, this year's European and American home appliance industry restructuring, Electrolux acquired GE's appliance business, Siemens appliance business transfer to Bosch, Whirlpool acquired Yixi Xi. Zhou Nan believes that after the reorganization, "European and American home appliance brands" will usher in a rebound; while some Japanese brands will gradually withdraw from the home appliance market, compared with South Korean brands. “Chinese brands such as Haier and Hisense are slowly rising, but they have not yet formed the overall image of Chinese brands.”

“Today's traffic volume at the Canton Fair has increased significantly compared to yesterday.” Liao Shixing, director of Chigo Air-Conditioning Overseas Markets Management Department, said that the trend of the global home appliance industry “is generally stable and slightly declining” is only a single-digit decline due to political turmoil in some regions. Chigo Air Conditioning adopts different strategies in different markets, some closely follow the improvement of energy efficiency, and some have rich product lines. Exports have maintained growth this year.

Customs data show that as of July this year, China’s home air conditioners had accumulated exports totaled about 41.04 million units, a year-on-year decrease of 7.9%.

According to industry rumors, the air-conditioning price war has already gone from home to abroad. Liao Shixing said that before the "National Day" this year, air-conditioning exports have always had price competition, but the overall rationality of enterprises. “In 2014, the price was stable and slightly decreased, and the prices of materials were reduced, but the labor increased.”

"(The export situation) is a bit weak." Pan Weidong, assistant to the chairman of Xinbao Electrical Appliances, said, "We have actively adjusted and expanded from kitchen appliances to household appliances such as vacuum cleaners and purifiers." He said frankly, "The exchange rate in the first quarter affected orders; The exchange rate depreciated in half a year, and the export situation in June has improved."

Pan Weidong said: “In foreign markets, Xinbao still focuses on OEMs. However, kitchen electrical products are upgrading, electrical appliances are expanding, and the proportion of first-line brands in the customer structure is increasing. It is expected that the export situation will be stable next year and there will be no major changes.”

Sea Peripheral Factory Trend

On October 15, on the first day of this year's Autumn Fair, the reporter of the "First Financial Daily" happened to have interviewed Matsushita Electric Co., President of Japan, Kazuhiro Ichiro in Beijing. In Panasonic's new strategy, China will be transformed from a "world factory" to a "great growth market." In the past year or two, Panasonic has set up washing machine plants in India and Vietnam.

A senior manager of the Midea Group responsible for exports also disclosed to this reporter: “This year, the US’s overseas investment business has grown faster than the business exported from mainland China. China’s labor costs are getting higher and higher, and it is already similar to that of South Europe.” He believes that Overseas investment and establishment of factories is a general trend, and Chinese brands are generally accepted by local consumers. It takes time.

Another senior home appliance exporter also believes that there are two advantages in China's home appliance exports. First, labor costs are low, and second, the industrial chain is well-supported. But now, the growth rate of the global home appliance market is declining. While the labor costs in Southeast Asian countries are even lower, the monthly salary of workers in Vietnam, India, and Malaysia is just over 200 US dollars, more than 300 US dollars, and more than 300 US dollars, and their industrial chain is gradually perfect. "So, Chinese companies must go outside. However, without five to eight years of exploration, it is difficult to truly understand the foreign market. This is a challenge."

“China, as a world factory, cannot be replaced in the short term, despite its weakness.” Liao Shixing said that the industrial chain in India and Southeast Asia will gradually improve. However, Chinese companies setting up factories overseas will certainly “take the market first and set up factories again”.

Not only large companies but small businesses are also in action. Li Lanyang, the general manager of Zhongshan Leto Electric Appliance Co., Ltd., has been thinking of exporting fan OEMs. “Big companies have strong human and material resources, and small and medium-sized companies must “go abroad” to have a group. The best way for us to pass through the Chamber of Commerce and Industry is to invest in 20 to 30 SMEs in the industry chain to form industrial zones. The local government will pay attention to this and believe that we can not only use local resources but also resolve local employment."

There are two factors that make Dawn Sun “move”. First, local labor has increased by 10% to 12% this year. The monthly salary of production workers in Zhongshan's frontline has reached 3,000 to 3,500 yuan, and skilled workers have required 4,000 yuan. Although this year's Vietnam smashing incident has caused European and American buyers to believe that China's supply chain is more stable, in the long run, Southeast Asia such as Vietnam, India and Indonesia will still share the "cake" made in China.

Second, the internationalization of the renminbi this year, overseas merchants innovative trade model, may affect future orders. A Russian customer of Liming Yang purchased a spare parts factory in Zhongshan this year and produced accessories. Parts were exported to Russia and then assembled locally. Russia has accepted settlement in RMB. This customer uses renminbi for both purchases and exports to reduce the exchange rate losses; the export assembly of spare parts also saves import tariffs and freight, and Russia’s labor costs only 5,000 yuan per month. The new model is more cost-effective.

"The biggest problem for small and medium-sized enterprises "going out" to set up factories is to use other people's brands." Liming Yang said that in order to resolve this problem, he signed a contract with EBAY and Amazon of the United States this year. “I export the whole container to the US bonded warehouse and open an independent brand online shop in EBAY and Amazon. There are online orders and then shipped. This is also a cross-border e-commerce, but it is more than the domestic online orders, and then express delivery. , more cost-effective."