The pain for home appliance manufacturers is not that users have disappeared

The vast majority of household appliances are just necessities for families. In recent years, the market operation difficulties of home appliance manufacturers are not due to the disappearance of user demand for home appliance products, but rather to the disappearance of many manufacturers' past business models and business methods, development inertia, and many dividends.
In addition to floor washers, sweeping robots, and automatic frying machines, which are non essential products, as well as dishwashers and integrated steaming and baking machines, which are subject to the consumption concept and belong to the choice of circle users, the vast majority of household appliances have been unshakable as "necessities of life" in Chinese households over the years, and there is no need to doubt or worry.
In other words, over the past three years, many home appliance manufacturers have encountered a series of problems in the frontline market, such as operational difficulties, development difficulties, growth difficulties, and sales difficulties. It is not that the demand for home appliances by users has disappeared or decreased. However, many manufacturers have had problems with their past market practices and business inertia, resulting in periodic market demand disruptions, declining shipments, and rising and falling prices.
From the perspective of the household appliance industry, the current demand for household appliances in China has not disappeared, nor has there been a significant decline. It is just that there has been a gradual slowdown in the upgrading of households, and the promotion and application of many household appliance categories in households has experienced periodic saturation.
First, from the perspective of household appliances, the number of large appliances, small appliances, and kitchen appliances in urban and rural households is currently very high. According to data from the National Bureau of Statistics, in 2021, the average number of air conditioners owned by urban and rural residents per 100 households was 161.7 and 89.0, making this the category with the slowest popularity among all electric appliances. In other categories, for example, the average ownership of refrigerators and washing machines per 100 rural households in 2021 was 103.5 and 96.1, respectively. Behind such a high household appliance inventory is the fact that the annual replacement rate of old household appliances remains at a stable level, and with the addition of new demand, the demand for household appliances in the Chinese household consumption market is in a stable and sustainable growth path.
Secondly, in terms of the consumption power of household appliances, there has been a steady growth momentum in recent years. This is mainly due to the increase in the customer price of the product and the increase in the scale of the high-end market. The most representative case is the high-end market dominated by foreign brands such as Siemens, Sharp, Samsung, Sony, etc. In the past, there have emerged local high-end brands such as Cassati, Fontai, COLMO, Hisense, etc. At the same time, foreign brands such as Toshiba, Philips, and Whirlpool are also under the control or authorized operation of Chinese enterprises. There are also a large number of local foreign brands that use e-commerce platforms as a breakthrough to enter the Chinese market to grab the cake of high-end consumers. Many home appliance dealers are also starting to move upward and seek growth space and operating profits at the high-end.
Third, from the perspective of the development history of developed countries, China, as a developing country, has achieved rapid growth in recent years. Although the gap between urban and rural economic income and consumption concepts still exists, people's pursuit and yearning for a better life will only steadily progress. As a result, on the basis of maintaining a stable increase in household appliance consumption, although the scale of China's household appliance market has shifted from growth and slow growth to stagflation and decline in recent years, the improvement in the average price of household appliance consumption and brand awareness has brought a new prelude to the high-end, high-quality, and integrated development of the entire household appliance product.
So, in the face of a stable and upward trend in user demand in the home appliance consumer market, how should many manufacturers address the current operational challenges? From the perspective of the household appliance industry, the most important thing is to break the old ideas, methods, and methods. The most extreme case is that even if there is profit and room for growth in selling high-end products, there will still be "internalization and compression" among enterprises over time, resulting in a fierce battle among enterprises caused by market homogenization, which is only a matter of time. Therefore, in the face of the household rigid needs of users and appliances, only by jumping out of the traditional business circuit and actively exploring new business models can we find a better way out.
At this stage, for many home appliance enterprises and businesses, the transformation needs to be carried out in three steps: first, to completely transform the business philosophy, not just to unilaterally scale shipments, but to find new high-quality development paths based on a certain scale; Second, when encountering problems, do not blindly worry and tense, but actively seek the root cause of the problem, distinguish short-term conflicts from medium to long-term conflicts, and handle them according to their priorities; Third, we should not only focus on the hardware price of household appliances, but also be good at using the product's content, software, and services to find differentiated competitive strength.