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Go to sea! Small appliance war reignites
Jan 25,2022
The small home appliance market in 2021 has not continued its previous popularity.
Whether it is from retail sales or retail prices, there has been a "cooling" phenomenon to varying degrees, and the growth rate is slowing down.
Data show that in the first half of 2021, the retail sales of small household appliances totaled 25.08 billion yuan, down 8.6% year-on-year; the retail volume was 119.11 million units, down 8.2% year-on-year.
As a popular player in the small home appliance track, Bear Electric reflects the overall situation of the industry to some extent.
Since its listing in August 2019, the share price of Xiaoxiong Electric has soared to HK$159.4 per share, but since August last year, the share price has entered a mode of "falling and falling". As of press time, Xiaoxiong Electric closed at HK$64.1 per share, which is almost halved compared to the same period last year, and the overall market value has shrunk significantly.
The performance of Xiaoxiong Electric in the third quarter of last year was also unsatisfactory. The actual revenue was 2.365 billion yuan, a year-on-year decrease of 5.32%, and the net profit attributable to the parent was 189 million yuan, a year-on-year decrease of 41.29%.
The market is cold and the performance is under pressure, which is a dilemma faced by many small household appliance companies.
1. What is the reason for the cooling of small appliances?
First, demand tends to be saturated, and consumption returns to rationality.
During the epidemic, the "home economy" superimposed the demand for consumption upgrades, which stimulated consumers' demand for small household appliances in different scenarios.
Most small household appliances rely on online channel dividends, and attract users to buy through high appearance and high cost performance. Consumers have started the "buy, buy, buy" model.
With the gradual control of the epidemic, on the one hand, the home is no longer the only life scenario for consumers, and the home economy has weakened; on the other hand, some users who are attracted by the high value of the products have also returned to rationality, making the demand for small household appliances return to normal levels.
Second, high base pressure.
Data shows that in 2019, the size of my country's small household appliance market will reach 402 billion yuan. The China Business Industry Research Institute predicts that my country's small household appliance market will reach 486.8 billion yuan in 2021.
In the small household appliance market with a high base, the growth is now a little weak compared to the previous boom.
Due to the sharp rise in the prices of raw materials such as copper and aluminum, various small home appliance brands have to increase their selling prices due to cost pressures, suppressing downstream consumer demand.
2. Small home appliance brands seek new breakthroughs
Under the pressure of short-term performance, many small home appliance brands have sought new breakthroughs.
Air fryers, mini yogurt machines, floor mopping robots and a large number of small household appliances with big brains appear frequently, and some brands continue to develop new categories, hoping to create the next "explosive product".
Some brands have turned their attention to overseas markets to open up the second growth curve of the company.
The global small home appliance market is showing a booming trend. Some companies have launched overseas layouts around cross-border e-commerce, and developed overseas channels such as independent websites, Amazon, and eBay.
In 2020, the top players represented by A-share Xinbao Co., Ltd., Xiaoxiong Electric Appliances, and Ecovacs showed excellent performance in business performance: Xinbao Co., Ltd. won 10.174 billion yuan in operating income through small home appliances; Xiaoxiong Co., Ltd. The overseas operating income of electrical appliances in 2020 reached 209 million yuan, a year-on-year increase of 143.21%; the operating income contributed by Ecovacs overseas in 2020 reached 3.379 billion yuan, accounting for 46.71%.
Under the circumstance that the domestic market is cold, many small household appliance companies have accelerated their pace of going overseas.
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