The Chinese economy has been characterized by a stable performance in 2024, particularly within the home appliance sectorVarious policies promoting green appliance consumption and incentivizing the replacement of old products have been implemented across the countryAdditionally, improving export markets have contributed to consistent growth within the industry.

According to data from the National Bureau of Statistics, from January to June 2024, the main business revenue of the home appliance industry reached 960.6 billion yuan, a year-on-year increase of 6.2%. In terms of profitability, the total profit for this period was 90.5 billion yuan, up 14.1% from the previous year.

Several enterprises have reported positive results based on their half-year performance reportsFor instance, on August 27, Haier Smart Home announced that in the first half of 2024, it achieved revenue of 135.623 billion yuan

This marks a year-on-year growth of 3.03%, while the net profit attributable to shareholders reached 10.42 billion yuan, climbing 16.3% compared to the previous yearNotably, the growth rate of profits continues to outpace that of revenue.

Haier's strategic efforts have focused on brand enhancement and high-end product positioning, allowing them to gain a competitive edgeTheir premium brand, Casarte, has emerged as a leader in retail market share for high-end refrigerators, washing machines, and air conditioners.

In the realm of profitability, Haier has managed to improve its gross margin to 30.6%, an increase of 0.2 percentage points year-on-yearThis uptick in gross margin is a result of Haier's accelerated digital transformation efforts, which have facilitated the modernization of procurement, research and development, and manufacturing processes both domestically and overseas, thereby enhancing their competitive edge within the global supply chain.

Meanwhile, Midea Group reported a significant increase in revenue, achieving a total of 218.1 billion yuan in the first half of 2024, a growth of 10% year-on-year

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The net profit attributable to shareholders stood at 20.8 billion yuan, marking a 14% increaseMidea's dual business strategy, balancing both consumer (ToC) and commercial/industrial solutions (ToB), has propelled their growth within the smart home and industrial technology sectors.

Midea's revenue from their new energy and industrial technology divisions reached 17.1 billion yuan, with smart building technology contributing an additional 15.7 billion yuan, and robotics and automation generating 13.9 billion yuan in revenueMidea continues to hold a leading position in the global market for household air conditioning compressors, commanding a 45% share.

In the context of a challenging market for color televisions, some companies have reported impressive growthTCL Electronics, for example, posted revenue of HKD 45.49 billion, marking a year-on-year increase of 30.3%, with an adjusted net profit of HKD 6.5 billion, growing by 147.3% in the same timeframe

Sichuan Changhong also saw a 10.24% rise in revenue, with net profits increasing by 38.71%.

TCL's domestic strategies capitalized on policies encouraging the replacement of old consumer electronicsThey achieved a 5.4% increase in shipments, and revenue grew by 21.1%. Additionally, TCL made significant inroads into the mid-to-high-end market, with shipments of 75-inch and larger televisions increasing by 33.2% and a dramatic 120.1% surge in sales of their Mini LED television sets in China.

Conversely, Sichuan Changhong focused on a sustainable business model, continuously upgrading its “smart manufacturing” capabilities while controlling costs to improve overall efficiencyTheir household electrical equipment manufacturing segment benefited from the implementation of old-for-new policies that stimulated demands for compressors, ultimately enhancing profitability within this sector.

As a result of improving conditions in overseas markets, China's appliance exports have flourished

Customs data indicates that in the first seven months of this year, Chinese appliance exports reached 409.19 billion yuan, signifying an 18.1% increase year-on-yearA recent report from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products confirms that monthly exports for appliance products have consistently set new records, surpassing 10 billion USD for four consecutive months starting from March.

According to Jiang Yaoping, a former Vice Minister of Commerce, China's export of electronic household products has been on a steady rise in recent years, maintaining a top position globallyThe continuous improvement in market share and brand reputation is complemented by rapid technological innovation and increasingly sophisticated foreign investment strategies.

High-profile sporting events, such as the European Cup and the Olympics, have also led to a surge in big screen television consumption

Major Chinese TV brands are eagerly expanding their international presenceFor example, TCL's TV shipments in Europe increased by 40.1% in the first half of the year, while shipments in emerging markets also recorded a 4% increase.

In the first half of 2024, TCL's global TV shipments reached 12.52 million units, representing a 9.2% increase, with revenue reaching HKD 25.914 billion, an uptick of 23.2%. Notably, their income from international markets was approximately double that of the domestic market.

In a similar vein, Driven by marketing efforts related to the European Cup, Hisense's revenue from the European market grew by 20.06%, serving as a significant driver in their overseas expansion initiativesA representative from Hisense stated that the company is committed to advancing its global brand and high-end structural upgrade strategy, utilizing major international event marketing to accelerate product structure improvements.

Hisense experienced a remarkable 153.43% increase in sales of smart display terminals measuring 85 inches or larger outside of China

Their flagship European Cup-themed U7 series also saw overseas sales rise by 74.20% year-on-year.

Looking forward to export trends in the latter half of the year, Zhou Nan, Secretary-General of the Household Appliances Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, predicts a moderate deceleration in growth rates due to a decrease in orders reported for June and high export bases from the previous yearNevertheless, it is expected that total appliance exports will reach a new all-time high, likely exceeding 120 billion USD.

The "Old-for-New" policies have gained renewed vigor following government encouragement and local supportHan Dong, General Manager of Rongsheng Appliances’ GTM Department, emphasized the importance of these innovations as they cater to user needs while driving upgrades in industry and consumption

In 2023, Rongsheng launched an initiative that allows customers to recycle old refrigerators and freezers in exchange for subsidies on new purchases, alongside incentives such as online lottery prizes, extended warranties, and gifts.

Data indicates that between April and July 2024, retail revenues from essential home appliances such as refrigerators, among others, experienced year-on-year growth of 4.4%, while revenue from televisions saw a 3.5% increase—up by 4.8 and 10.1 percentage points respectively compared to earlier months of the yearThis positive trend in retail sales has been reflected upstream, positively impacting production rates.

Regulations have also been adjusted to provide additional subsidies for consumers purchasing energy-efficient appliances such as refrigerators, washing machines, and air conditioners, with subsidies reaching up to 15% based on final sales prices

Consumers can receive an extra 5% on particularly high-efficiency products, with specified budgets for subsidies per customer for each product class not exceeding 2000 yuan.

Individual regions are free to determine specific appliance categories eligible for these subsidies and are encouraged to offer subsidies for additional products based on local circumstances.

The recent policies supporting the old-for-new scheme have been described as a timely intervention for the home appliance industry amidst rising global uncertainties and pressures in domestic marketsJiang Feng, Executive Vice Chairman of the China Household Electrical Appliances Association, emphasized the critical need for transforming both incremental and existing market potential, as there remain substantial opportunities for refreshing traditional appliances.

As we move deeper into 2024, it is clear that while challenges exist, the concerted efforts by the government, manufacturers, and the market at large signify a robust path forward for China's appliance sector