China¡¯s White Goods Industry
While the overall market for white goods rose 34% between 1996 and 2002, this is not a fast-growing market by Chinese standards. More and more purchases were for upgrades and niche items and competition for domestic market share is among the most intense in contemporary China.
Now a US$2 billion a year market in China. As recently as the mid-1990s, 90% of urban households had access to washing machines, but just 14% of rural households. By 2003, that figure had grown to 92% and 29% respectively. Local brands dominate 30-60% of the market, depending on the province. Most washing machines sold in China are of the twin-tub variety, but at least a generation behind the type used in most foreign markets. By 2003, China was the world¡¯s largest washing machine producer, with an output of 15 million units a year.
Foreign market players include GE, Electrolux, Whirlpool and Panasonic, but the big players are Shangdong Xioya and Wuxi Little Swan, with 14% and 13% of the market respectively.
If competition in the washing machine market is getting fierce, the US $2.8 billion refrigerator market is even tougher. Qingdai-based Haier, with 53% of the market in 2001 (and 5.3% of global output), was far and away the market leader while the biggest foreign-invested marketp layers were Suzhou Samsung and Electrolux Sino-Italian (Changsha) with 3.4% and 1.5% of the market, respectively.
China produces 70% of the world¡¯s kitchen appliances in 2003 and 40% of its microwave ovens. About 60% (or US$2.45 billion) was produced in the Pearl River Delta, especially the city of Shunde but also Foshan, Zhongshan, Guangzhou, Shenzhen and Dongguan. Shunde is home to Galanz, the world¡¯s biggest manufacturer of microwave ovens, GD Midea, the world¡¯s largest maker of rice cookers and electric fans and Guangdong Domlin, the world¡¯s No. 1 manufacturer of cooking kettles.
China exported US3.7 billion in kitchen appliances in 2003, up 32% over 2002. Most were produced for international brands and about a third went to the EU, China¡¯s largest export market for white goods.