South Korean media: Chinese home appliances are moving towards the premium segment, even threatening Samsung and LG!
On August 22, the South Korean media "Korea Economic Daily" published an article stating that Chinese home appliances, once considered "cheap disposable products," are now emerging in the premium market, even posing a threat to Samsung and LG. Analysts believe that Chinese companies have defeated Japan through the "cost-performance strategy" and are now following the footsteps of South Korean companies to occupy the premium market.
According to the China Chamber of Commerce for Machinery and Electronic Products Export and Import (CCCME), the export value of Chinese home appliances increased by 14.8% last year, reaching 128.6 billion U.S. dollars. From the region, exports to South America (33.1%), Southeast Asia (19.9%), Africa (17.9%), the Middle East (16.6%), and Europe (15.5%) all saw significant growth.
The industry is paying attention to the fact that Chinese home appliance exports are expanding in the "origin" of the premium market, Europe. Leading Chinese home appliance companies Midea and Haier are competing in Europe with their own premium brands "COLMO" and "Casarte". In the first quarter of this year, Midea's premium brand sales surged by 55%.
Robotic vacuum cleaners, which have become synonymous with premium home appliances, are another example. The top robotic vacuum cleaner company in China, Roborock, ranked first in global market share last year (sales of 20.7%), despite its flagship robotic vacuum model priced at 1.8 million won, which is about 50% more expensive than the top products of Samsung and LG.
The industry believes that the improvement in technological strength is the reason for the rise of Chinese home appliances. A South Korean industry insider explained, "Unlike semiconductors and smartphones, the technical levels between South Korea and China in home appliances are almost the same. On the contrary, China is more technologically advanced in certain areas such as robotic vacuums and built-in appliances."
China is implementing an "old-for-new" policy, providing a 15% subsidy for home appliances purchased in the domestic market. Based on the profits brought in, Chinese companies are increasing their investment in R&D and acquiring overseas well-known brands to expand their scale.
In 2016, Haier acquired General Electric's home appliance division for 5.4 billion U.S. dollars, increasing its market share in the U.S. from 1% to 17% last year. Haier also acquired the Italian home appliance company Candi in 2019. Hisense, on the other hand, acquired Gorenje, the largest home appliance company in Eastern Europe, in 2018.
Original: www.toutiao.com/article/1841157332797452/
Statement: This article represents the views of the author.