Will the warmth of small household appliances industry continue in 2023?

After experiencing the market situation of "the market will suddenly turn cold in 2021 and will remain sluggish in the first half of 2022", the small household appliance industry will finally show some signs of recovery in the second half of 2022.

According to the overall data of Ovi Cloud (AVC) omni channel promotion, from January to September 2022, the omni channel retail sales of 14 categories of small kitchen appliances totaled 41.35 billion yuan, up 5.7% year on year.

During this year's National Day and the promotion of the Double Eleventh National Congress, the overall performance of the small household appliances category was also better than expected. According to the monitoring data of AVC, during the National Day (22W40-41), the online retail sales of all categories of small kitchen appliances reached 1.32 billion yuan, up 6.0% year on year; During the 2022 Double 11 (22W44-46), the retail sales of small kitchen appliances totaled 5.08 billion yuan, achieving a slight growth.

However, the small recovery of the market did not reach all small household appliance enterprises. According to the data of the third quarter report disclosed by the small household appliance listed companies some time ago, some enterprises have not yet emerged from the downturn.

In the first three quarters of this year, except for the double growth of revenues and profits achieved by Xiaoxiong Electric and Xinbao, the performance of other companies was not satisfactory. Among them, the revenue and net profit of Jiuyang and Beiding declined. Although the net profit of Supor has increased, the revenue scale is still declining.

So, will the warmth of the small household appliance industry continue in 2023?

Iterative upgrading of traditional rigid demand categories to maintain steady growth

From the perspective of product development cycle, traditional small kitchen appliances represented by rice cookers, electric kettles, etc. have entered a mature period, and the current market retention is relatively high. The current and future market demand is mainly for upgrading.

In this context, enterprises are actively promoting product iteration to stimulate more update requirements. Take rice cookers as an example. In recent years, more high-end and intelligent products such as IH rice cookers and low sugar rice cookers have appeared in the market.

Electric kettle products also gradually increase the functions of temperature control and insulation, touch screen control, bacteriostasis, etc. In addition, in terms of product appearance and material, traditional kitchen appliances are also constantly upgrading.

The emergence of new technologies and functions has also brought new growth points to the market. According to Tonglian data, from January to October 2022, the year-on-year growth rate of sales of Tmall's JD platform for rice cookers, electric kettles, microwave ovens and electric pressure cookers was 9.48%, 2.30%, 0.85% and 2.02% respectively, which was higher than that in 2021.

From this point of view, driven by product upgrading, the traditional just needed categories are expected to continue to maintain a steady growth trend next year.

Emerging trend categories emerge one after another and will continue to increase in volume in the future

Under the constant catalysis of the concepts of "lazy economy" and "single economy", new categories of small household appliances are emerging in the domestic market, contributing to the growth of the industry.

From the wall breaking machine and health preserving pot that became popular in 2017, to the multi-functional cooking pot that became popular in the market in 2019, and to the air frying pan that became popular in the market in 2020, new categories have emerged in the market, thus stimulating new market demand.

In 2021, affected by the high base, the overall market growth of small kitchen appliances will decline sharply, and the emerging categories will also experience "cooling phenomenon" to varying degrees. However, since the second half of 2022, with the base effect declining, the demand for various categories has begun to recover, especially for products that improve the quality of life, such as air fryers, electric steamers, wall breakers, coffee makers, etc., showing a gradual and periodic upward trend.

According to Unicom data, from January to October 2022, the year-on-year growth rate of sales of Tmall's JD platform for air fryers, coffee makers, electromagnetic tea stoves, and electric steamers was 121.54%, 52.35%, 77.62%, and 79.00%, respectively. The growth rate of air fryers is far ahead.

In addition, in the second half of 2022, the wall breaking machine that once fell into the "bottom" also showed obvious signs of warming up. According to the data of Ovi Cloud, from July to September 2022, the online sales of wall breaking machines increased by 16.45%, 1.3% and 16.99% year on year respectively; During the National Day, the retail sales of wall breaking machines also increased by 9.5% year on year.

Under the condition of high growth this year, the growth rate of new categories such as air fryers and coffee makers may slow down next year, but the overall growth rate is still better than the overall market, driving the overall growth of the industry.

The market returns to normalization, and the trend of quality upgrading is highlighted

After the roller coaster development in the previous two years, the small household appliance industry is gradually returning to the normal growth mode. From the perspective of the overall market performance in 2022, consumers will become more rational and have a particular preference for small household appliances with high quality, multi-function attributes and finely differentiated scenarios. This also brings inspiration to many small household appliance enterprises. The diversified and high-quality creative small household appliances can stimulate the enthusiasm of users.

Adhering to the brand vision of becoming the "favorite small home appliance for young people", KoBear Electric will focus on promoting the boutique strategy in 2022. On the one hand, reduce SKU and optimize product structure; On the other hand, we will seize the high-end market through high terminal brands. For example, Xiaoxiong has obtained the brand authorization from Brandt, the first of the four major brands of noble household appliances in the world, and is responsible for the R&D and sales of this brand in China. After a series of strategic adjustments, the revenue and profit of Xiaoxiong Electric will grow in the third quarter of 2022.

Jiuyang is also making efforts to optimize the product structure and constantly deepening the layout of medium and high-end products. For example, on August 31 of this year, at the 2022 World Advanced Manufacturing Conference, Jiuyang exhibited the "Space Technology" series of products that the company will focus on in 2022, including the Space Technology Hot Clean, Space Technology Air fryer, Space Technology 0 coated rice cooker and Space Technology wash free soy milk machine.

At the same time, Supor is moving forward to multi category kitchen scenario solutions, and developing scenario based small kitchen appliances with advanced 5G, Internet of Things and other technology partners. Take the small C chef's cooking machine as an example. Users can quickly complete the tedious networking process of the cooking machine with a touch of Huawei's mobile phone, and then obtain a large number of master chef's recipes through the universal card popped up on the mobile phone. The small C chef can also make full use of 10 cooking methods, such as air baking, braising, frying/stewing, and juice collection, and automatically weigh the raw materials to help users complete the entire cooking process through interactive ways such as display screen and voice.

It is not difficult to find that under the background of the pressure of the general environment, the leading enterprises of small kitchen appliances are making efforts to change and strive to pass through the economic downturn cycle. In the future, with the upgrading of product structure and the continuous improvement of product quality, the small household appliances sector is expected to gradually walk out of the trough. Among them, high-quality trend categories will develop rapidly based on consumer preferences, thus bringing new impetus to revenue growth for small household appliance enterprises in transition.