Covid-19: in 2020, the international situation is more complicated. In addition, when the new crown pneumonia epidemic is spreading all over the world, under the coexistence of “danger” and “machine”, what kind of story will our domestic electrical appliances export tell in 2020?
After more than 40 years of rapid development, China’s home appliance manufacturing industry has realized the transformation from meeting the daily needs of the people to going abroad and exporting abroad. According to the data of China Household Appliance Association, in 2018, China’s household appliance exports accounted for 39.4% of global household appliance exports, and it is truly the “world household appliance production center”.
In 2020, the international situation has become more complicated: important progress has been made in China US economic and trade consultations. In the first quarter, ASEAN replaced the EU as China’s largest trading partner; India has raised tariff barriers on household appliances, and some countries are experiencing political and economic turmoil. Coupled with the covid-19 epidemic of the new crown pneumonia worldwide, and the “danger” and “machine” coexistence, what will be the story of China’s household electrical appliances export in 2020?
Overseas diversified market expansion
In recent years, the cumulative export volume of China’s household appliance industry has been showing an upward trend. According to the data, in 2019, the cumulative export volume of China’s household appliances reached US $70.92 billion, breaking a record high; However, the growth rate slowed down, down 6.6 percentage points from the same period last year.
Among them, the trend of “increase in volume and decrease in volume” appeared in the power grid, with a cumulative export volume of 221 million units, a year-on-year increase of 2.08%; The export volume was US $25.721 billion, a year-on-year decrease of 1.01%. The total export volume of household appliances increased by 6.7 billion, showing a year-on-year increase of 4.6%; The export volume was 32.4 billion US dollars, a year-on-year increase of 6.24%. The export scale of household appliances continued to decline, the scale of small household appliances continued to rise, and the export of large and small household appliances showed a differentiation trend.
From a regional perspective, due to Sino US trade friction, the United States has imposed tariffs on some products exported from China. In recent years, China’s home appliance industry’s exports to the United States have continued to decline. In 2019, the cumulative export volume of household appliances to the United States was US $15.24 billion, a year-on-year decrease of 7.4%, and the proportion in China’s total household appliance export also fell from 24% to 21.5%. Among them, refrigerators, air conditioners, freezers and other major electricity fell by 30.8%, 30.1% and 17.7% respectively; Due to less overseas production capacity layout, small household appliances are less affected by Sino US trade frictions, and their exports to the United States only show a slight downward trend.
At present, China and the United States have reached an agreement on the text of the first phase of the economic and trade agreement, and the United States will fulfill the relevant commitment to cancel the imposition of tariffs on Chinese products in stages, which is good news for the export of home appliance industry. However, it is worth noting that household appliances, including air conditioners, refrigerators, clothes dryers, vacuum cleaners, humidifiers and some small kitchen appliances with electric heating, are still within the scope of tariff increase. There are still many uncertain factors in China’s household appliance exports to the United States in 2020.
After the financial crisis in 2009, India has become one of the home appliance markets with the largest growth in the world, and the market potential is very huge. However, due to India’s increasing tariff barriers on household appliances, China’s household appliances exports to India have been greatly affected. In 2019, China’s home appliance exports to India totaled US $1.78 billion, a year-on-year decrease of 8.8%, of which the decline of household electrical products reached 33.2%. At present, Midea, Haier and other giant enterprises have begun to establish factories in India to speed up the Indian market.
The European market has a good growth momentum in recent years. In 2019, the cumulative export volume of China’s household appliances to the EU was US $16.32 billion, a year-on-year increase of 8.5%, accounting for 23% of the total export volume of household appliances; The scale of export volume has surpassed that of exports to the United States, ranking first, and has become the largest market for China’s household appliance exports.
As one belt, one road, the ASEAN countries are becoming the new engine of China’s household electrical appliances export. In 2019, the cumulative export volume of China’s household appliances to ASEAN increased by 17.6% year-on-year. In the first quarter of 2020, ASEAN has replaced the EU to become China’s largest trading partner. In addition, one belt, one road strategy, China’s household appliances have also achieved a significant increase in Africa’s total export volume. Data show that in 2019, China’s exports to Africa amounted to US $3.28 billion, an increase of 8.7% year-on-year.
One belt, one road, China and the US, will not change the status of China’s “world appliance production center”. The appliance companies seize the opportunity of “one belt and one road” and actively explore overseas diversified markets, showing the resilience to meet challenges. Zhou Nan, Secretary General of household appliances branch of China Chamber of Commerce for import and export of mechanical and electrical products, believes that by 2025, the export scale of China’s household appliances may exceed 100 billion US dollars.
Explore opportunities under crisis
In recent years, the growth of the domestic home appliance market has fallen into a “bottleneck”, and many enterprises have their eyes on the overseas market. According to the financial report released by the enterprise, in the first half of 2019, Qingdao Haier’s overseas market revenue accounted for 47% of the total revenue, Midea Group’s overseas market revenue accounted for 40.25% of the total revenue, and Gree Electric Appliance’s overseas market revenue accounted for 14.1% of the total revenue. Home appliance export has become one of the important pillars of China’s home appliance industry.
This year, the covid-19 outbreak of new crown pneumonia has disrupted the inherent rhythm of the household appliance industry. In the first quarter of 2020, the delayed start-up, lack of raw materials, insufficient manpower and blocked logistics caused by the epidemic led to the slow recovery of the enterprise’s production capacity, or it would be unable to fulfill the orders of overseas customers on time and bear certain losses. These inevitably have an impact on China’s home appliance export.
According to the data of the General Administration of customs, from January to February 2020, China’s cumulative exports of household appliances fell by 20.6% year-on-year. Among them, the export volume of refrigerators, air conditioners, washing machines and other household appliances fell by 9.2%, 20.4% and 18.4% respectively, lower than the comprehensive level of the industry; Microwave ovens, LCD TVs and other categories were the hardest hit areas affected by the epidemic, with exports falling by 38.5% and 33.9% respectively.
Entering the second quarter, with the continuous spread of the epidemic around the world, China’s home appliance exports have been hit again. As of April 22, a total of 2.51 million people had been diagnosed worldwide, including 880000 in North America, 1.09 million in Europe and 400000 in Asia. The situation is very serious. Although the domestic epidemic has been basically controlled and household electrical appliance enterprises have resumed work and production, the demand for household electrical appliances caused by the overseas epidemic has decreased, resulting in