News has opinions and industry insights. Can "out of favor" kitchen appliances still capture consumers?

On October 20th, Beijing, China Central Radio and Television (CCTV) reported that kitchen appliances represented by air fryers have made great strides in the past few years, creating many industry myths. From March to May 2022, in the online transaction volume of kitchen appliances, air fryers increased by 200% year-on-year, while electric steamers, fruit and vegetable cleaning machines, and electric auxiliary food preparation sticks all increased by more than 80% year-on-year. However, after rapid growth, the small home appliance category is being abandoned by consumers, and manufacturers have seen both sales and revenue decline since the beginning of this year.

Is the loss of favor for small appliances due to market saturation? What adjustments have the industry made to this? Where is the next small household appliance outlet? China Central Radio and Television Corporation's Voice of China News has specially planned "Industry Insights". This issue focuses on the small home appliance industry and talks with Yuan Qingling, Executive Vice President of Jiangsu Household Appliance Association, Guo Meide, President of a Big Data Technology Co., Ltd., and Dou Huaideng, General Manager of a domestic electrical sales company.

Turning to the stock market, increasing growth pressure

Data shows that even in the spring when sales are rising rapidly, in 2022, the retail sales of kitchen appliances in China reached 52.03 billion yuan, a year-on-year decrease of 6.7%; The retail volume was 220.49 million units, a year-on-year decrease of 12.7%. However, the previous three years were the golden age of rapid growth in China's small home appliance industry.

In response to the industry's sudden sluggish growth after rapid development, Guo Meide, the President of a certain big data technology Co., Ltd., acknowledged this huge gap and pointed out that the growth pressure of the small home appliance industry is the "biggest one" in the home appliance market. But at the same time, he also expressed rationally, "The sales of small household appliances this year are similar to 2019, and saying 'currently not good' is a relative concept."

So, why is this transformation happening now? What is the underlying mechanism of influence? Guo Meide further analyzed the changes in social background, market nature, and the commodity attributes of small household appliances: firstly, during the epidemic, more people choose to cook at home, and the demand for kitchen small appliances has surged. The ownership of small appliances by hundreds of households has rapidly saturated, and the incremental market has gradually shifted to a slowly growing stock market; In addition, from the characteristics of kitchen appliances, they are different from essential items such as gas stoves and range hoods. Consumers tend to make impulsive purchases, which can easily cause significant fluctuations. Dou Huaideng, the general manager of a domestic sales company of a certain electrical company, also explained this change from the perspective of export sales, pointing out that starting from the second half of 2022, the issuance of foreign consumption vouchers will be suspended, which has led to many foreign customers and foreign trade companies making adjustments to their inventory structure, and has also had a certain impact on the interruption of the rapid development trend of the industry.

Upgrade and iterate faster, waiting for secondary growth

Move with the wind, go against the wind. After encountering a cold, small home appliance companies are not just sitting idly by. What changes have occurred within the industry? Can these adjustments improve the current situation?

Based on observations of the industry as a whole, Yuan Qingling, Executive Vice President of the Jiangsu Household Appliance Association, said, "Emerging categories of small home appliances are still emerging, among which low frequency internet celebrity small home appliances are like a flash in the pan, but there will be new ones after the pan." Dou Huaideng, a frontline practitioner in the industry, also pointed out that "under fierce competition, the frequency of small home appliance upgrades is accelerating, basically upgrading every one or two years.", Continuously injecting fresh blood seems to be the magic weapon for the current small home appliance industry to fight against recession.

However, speed does not necessarily mean good. Blindly accelerating iteration has a similar effect on industry development as drinking poison to quench thirst. Therefore, Dou Huaideng said that in the face of a farther future, small appliances are bound to serve a healthy life, making high-quality small appliances a necessity for consumers, constantly meeting new needs, and improving everyone's quality of life.

In this direction, many manufacturers are already making efforts. Guo Meide stated that some companies have invested a large amount of research and development costs in interaction and intelligence to adapt to the consumption patterns behind the beauty economy, lazy economy, practical economy, and intelligent economy, targeting the increasingly segmented demand of the consumer end, thereby driving the industry into a second growth period after "growth recession". "Small appliances will definitely usher in a second spring, but we need to wait," Guo Meide firmly believes.

Capture young consumers and create new consumer demands

For longer-term industry trends, practitioners and observers in the small home appliance industry have provided many key words, all of which are based on insights into the characteristics of young consumers.

Guo Meide compared the needs of consumers in the "Golden Three Years" with those in recent years and analyzed that consumers have shifted from impulsive consumption to rational shopping: "Their judgment time will be longer, their purchasing radius will expand, and their determination will also be enhanced." In this regard, he believes that in the future, small household appliances should strive to be transformed into necessities through iterative upgrades, integrate multiple functions into more practical all-in-one machines, innovate and explore new consumption scenarios, To comprehensively produce products with high aesthetic value, intelligence, and convenience. Starting from the diverse consumption needs of young consumers, Yuan Qingling believes that "specialized, refined, unique, and new" enterprises in the industry can constantly break new tracks and seize the new opportunities brought by new consumption scenarios.

In addition, in addition to exploring new consumer demands in the domestic stock market, the vast blue ocean of overseas markets is increasingly attracting industry attention. Dou Huaideng pointed out that "small household appliances are seen as a necessity by Europeans and Americans, and since the second half of this year, it has been clearly felt that overseas consumption is rebounding." Guo Meide also agrees with this point, emphasizing that domestic enterprises are currently facing serious "internal competition", and the rise of domestic demand may take time, but there is still a lot of space in the overseas market.

Taking into account both internal and external factors and advancing in multiple directions, there are more possibilities for the revival of small household appliances in the future.