Who pushed the wheel of the drum washing machine?

Although the washing machine market in the first half of this year followed the rapid growth of 2010, the home appliances to the countryside policy carried an increase of 60%, but it is still difficult to conceal the signs of slower growth. According to statistics from China Yikang, the sales of drum washing machines from January to July accounted for approximately 25%, which will increase in the future. And Haier, Little Swan and other domestic manufacturers of new washing machine production base will be mostly roller products. The relative saturation of the urban market, the rural market has just been "eaten" after the home appliances offer to the countryside, who will promote the drum washing machine wheels?

Market demand growth slows

The growth of the washing machine market this year was mainly driven by the policy of home appliances to the countryside, accounting for 60% of the new volume.

According to industry online data, the total sales volume of the washing machine industry in the first half of 2011 was 26,439,000 units, a year-on-year increase of 15.2%, which was lower than the growth rate of the same period of last year. The monitoring of China's Yikang's 5,932 stores showed that sales of washing machines increased by 5.75% from January to July. Compared with the previous growth rate of more than 20%, sales growth of washing machines has slowed down significantly.

Lu Jianguo, director of the inspection department of the National Household Electrical Appliances Quality Supervision and Inspection Center, is optimistic about the washing machine market this year and believes that the domestic market is expected to achieve sales of 46 million units and exports of 24 million units throughout the year. However, he admitted that the growth of the washing machine market this year is mainly driven by the policy of home appliances to the countryside, and this factor will account for 60% of the increase in sales.

The three listed companies that use washing machines as their main business also maintained relatively stable growth. The 2011 mid-year financial report showed that Qingdao Haier's washing machine business realized sales revenue of 5.1 billion yuan, a year-on-year increase of 13.58%; Little Swan sales revenue of 5.9 billion yuan, an increase of 19.64%; Hefei Sanyo sales revenue of 1.6 billion yuan, an increase of 92.45%.

However, in mid-2010, Little Swan achieved sales revenue of 3.634 billion yuan, an increase of 91.02%; Qingdao Haier washing machine sales revenue of 4.712 billion yuan, an increase of 28.3%. Compared with the same period of last year, the growth rate of manufacturers' washing machine business has slowed down significantly.

Little Swan believes that the overall growth rate of washing machines has been slowed down due to factors such as the continuous increase in the control of domestic real estate, the weakening of policy pulling effect of home appliances to the countryside, high inflation, and overseas economic fluctuations. Hefei Sanyo believes that rising raw material prices, rising human resource costs, and appreciation of the renminbi are also important factors in the slowdown in the growth of the washing machine industry. However, both manufacturers mentioned in the mid-2011 report that they would increase the promotion of drum washing machines.

Zhang Jipan of Hangzhou Matsushita Home Appliances Co., Ltd. said in an interview with a reporter from China Electronics News that due to the impact of real estate regulation, the number of households buying household appliances in cities has decreased, and the number of urban washing machines has reached 96, and the market has grown. The potential is limited, while the rural market has slowed down due to the gradual withdrawal of home appliances to the countryside policy. However, he emphasized that Panasonic will continue to increase the proportion of high-end products such as drum washing machines. At present, drum washing machines account for 51% of Panasonic washing machine products.

Dr. Hu Ziqiang, director of Suzhou Samsung Electronics Household Appliances Research Institute, said in an interview with a reporter from China Electronics News that compared to cities, the rural washing machine market has just started, and even if the policy of home appliances to rural areas is withdrawn, it will not have much impact. After all, "It's hard to shut down when the market is open." However, he also pointed out that Samsung insists on the high-end route and does not fight price wars. At present, the ratio of drum washing machines to Samsung washing machines is between 60% and 70%.

Higher roller profit rate

Despite the high profits of the drum washing machine, the price war played by Little Swan was based on the reduction of gross profit margin.

According to the data provided by Zhong Yikang, from January to July this year, the proportion of drum washing machines in the washing machine market was 24.59%, and the sales volume increased by 14.11% year-on-year; the proportion of washing machines by wave washers was 58.29%, and the sales volume increased by 5.39% year-on-year. From this set of data, it can be seen that the proportion of drum washing machines is increasing.

Lu Jianguo believes that at present, many domestic companies desperately push drum washing machines because of their relatively high profit margins. At present, the net profit rate of Washing Machine Washers is less than 5%, and drum washing machines are much higher than this figure.

Compared with domestic brands, foreign brands still dominate in drum washing machines. Japan, South Korea, Panasonic, Samsung, Siemens and other brands of drum washing machine sales accounted for more than 50%.

Statistics from China Yikang can also be seen from January to July that Haier and Midea (Little Swan, Midea, Rongshida) accounted for 51.5% of the domestic washing machine market share, of which Haier ranked first with 26% of the total; and In the drum washing machine market, Haier and Midea have only about 39% share of the company. Siemens topped the list with 22.41%. Haier and Little Swan are 20.25% and 13.89% respectively, ranking second and third respectively.

In the offensive against the drum washing machine, the Department of the United States is even more aggressive. Midea Group is building a washing machine business with Little Swan as its leader and an investment of 850 million yuan to build a washing machine production base in Tianjin. It will form an annual production capacity of 6 million units, most of which will be drum washing machines. By then, the total production capacity of Little Swan will reach 8 million units. At the same time, Haier also invested RMB 2.5 billion in Haier’s Industrial Park in Tianjin, of which washing machine capacity is expected to be 3 million units.

In addition, the Department of the United States has also launched a drum price reduction campaign in the past two years to popularize the drum washing machines once identified as high-end products. “The high price issue that has hampered the popularity of drum washing machines has been solved. Most drum washing machines are priced between 2,000 yuan and 3,000 yuan. The price of drum washing machines when they first entered China was about 2,000 yuan. At that time, the price of washing machines was only a few hundred yuan.” Jianguo told the "China Electronics News" reporter.

Although the price war for drum washing machines initiated by Midea has increased the market share of the two brands of Little Swan and Midea (the market share of the two major brands has reached 18.57%, which is almost 20.25% of that of Shanghai Haier), this is at the expense of the level of gross profit margin. of.

From the 2011 mid-term financial report, the gross profit margin of Little Swan Washing Machine was only 18.3%, while that of Qingdao Haier and Hefei Sanyo Washing Machine Business was 26.52% and 32.16%, respectively. Even so, as the controlling shareholder of Little Swan, Midea’s washing machine business grew at the slowest rate than air-conditioners and refrigerators, which only increased by 22.57% year-on-year, while the latter two businesses increased by 64.44% and 46.86% respectively year-on-year.

Who is the real beneficiary

The energy-efficient motors and heating pipes required for the drum washing machine are almost entirely dependent on foreign companies.

In spite of this, Fang Hongbo, chairman of Midea, still firmly believes that in the field of washing machines, a high-end transition must be made to the drum. However, Lu Jianguo believes that due to the multiple levels of demand in the Chinese market, the washing machine industry should follow the wave and the roller.

"Panxia, ​​Samsung, LG and other former washing machine manufacturers have turned to the drum, Haier, Little Swan and other domestic manufacturers are also powerful drum washing machine is understandable, but if you blindly hit the price war is not conducive to the long-term development of the industry "Lu Jianguo said.

He believes that, but if the price war continues, the ultimate victim is still the consumer, because manufacturers will lower prices in the future will certainly cut corners or other deception, the market has appeared in the capacity of drum washing machine virtual phenomenon. In addition, from the perspective of parts and components, although the share of domestic manufacturers in the drum washing machine market has been steadily rising, the supply of motors and heating pipes necessary for washing machines still depends on foreign companies.

Lu Jianguo told the "China Electronics News" reporter: "At present, the production of electrical and heating pipes are small factories in Jiangsu, Zhejiang and other places, the scale is relatively small, and the thermal efficiency is only 30% to 40%. More energy-saving, water-saving Inverter motors can increase thermal efficiency to 80%, but almost all of these products are produced by major foreign manufacturers such as Sanyo, GE, and Emerson."

The reporter also noticed that Hefei Sanyo plans to issue non-public shares and raise funds of 1.105 billion yuan, which will be mainly used for the annual output of 5 million washing machine frequency conversion technological transformation projects, annual output of 10 million frequency conversion motors and control system technological transformation and expansion projects. GE and Emerson also have motor production plants in China.

Lu Jianguo believes that Midea Electric Appliances and Qingdao Haier, despite their large scale, are still manufacturers of complete machines, and the upstream components such as motors still rely on foreign companies such as GE and Emerson. If they can extend to upstream industries in the future, their profitability will increase substantially, and the gross margin level can be increased by 5 to 10 percentage points.

An informed source, who did not want to be named, told the “China Electronics News” reporter that the drum washing machine was hot in the market for water saving, energy saving, and no harm to clothing. It was positioned as a high-end product. In fact, it was used by the entire manufacturer. A means to increase profit levels.

He said that China has 102 washing machine manufacturers, most of which only produce medium and low-end products. The required motors are provided by small factories in Jiangsu and Zhejiang, but high-efficiency motors such as drum washing machines are used by GE, Emerson, etc. Foreign brand monopoly, Haier, Little Swan and other domestic brands so-called drum washing machine products are positioned high-end, but they can only cooperate with. The hot selling of the drum washing machine will eventually benefit GE, Emerson and other foreign companies. From this point of view, we will understand who is the real promoter of the drum washing machine.