An American resident in China once joked: “the only thing that can truly reflect the changes in the quality of life of the Chinese people is home appliances, which can’t be compared with houses and cars.”
His words are still worth considering. Although the house and car life is the rigid demand of life, the vast majority of families buy it through mortgage. However, household appliances, as durable consumer goods, will be upgraded and renewed only when the economy recovers and food and clothing are abundant.
May day is approaching. As the first labor day in the post epidemic era, many families are planning their consumption and tourism. With the gradual recovery of the overall consumer market in the first quarter of 2021, the sales scale of home appliance market is also expanding. The white paper on the trend of replacement of May 1 household appliances released by the joint industry monitoring organization of Jingdong household appliances Co., Ltd. predicted that this year’s May 1 household appliance market will usher in a new round of replacement.
It is self-evident that the pressure and risks brought by COVID-19 to the economic operation for nearly two years is also uncertain. In this context, consumers can not help but downgrade their consumption.
Since this year, COVID-19 has been effectively controlled, the employment situation is becoming clearer and the consumption of residents is escalating again. Thanks to the upgrading of consumption, the sales of fashion and high-end household appliances rose. As a leading retail platform for home appliances, in the tide of home appliances replacement, on the one hand, Jingdong home appliances has established industry standards to eliminate the confusion and anxiety of brands in choosing the track; On the other hand, in the process of transformation to high-end, through the transformation from operating products to operating users, I personally explore the way for brand merchants and form a positive interactive interface.
Boosting domestic demand and looking at home appliances
Recently, the white paper on the trend of replacement of May 1 household appliances (hereinafter referred to as the “white paper”) jointly released by Jingdong household appliances and zhongyikang data organization pointed out that in the first quarter of 2021, the scale of China’s household appliance market reached 190.3 billion yuan, with a year-on-year growth rate of 47%, and the two-line market showed a trend of rapid growth.
In the first quarter, the sharp increase in the sales scale of household appliances was due to three factors, one of which was the policy factor. From the historical origin of the development of household appliances industry, the degree of marketization of household appliances was the highest, and it was the most dynamic industrial plate. In 2021, the government work report clearly mentioned that it is necessary to “steadily increase bulk consumption of automobiles and household appliances”, and household appliances consumption has become the top priority of revitalizing domestic demand economy.
Second, the epidemic has brought about the upgrading of consumption concept, and the potential demand of consumers has been released. Nowadays, consumers prefer health quality and intelligent experiential home appliances. New function + intelligent / health trend has become the theme keyword of home appliance market in 2021, and improving demand has become the strongest driving force of home appliance consumption.
In addition, there are also changes in consumption concepts. During the interview, many consumers told Wall Street tech eye that the epidemic has made them more aware of life and the meaning of life. In daily life, the frequency of abandonment has increased, and “exquisite consumption” is more advocated in shopping. With generation Z (post-95 and Post-00) becoming the main consumption force, it has played a role in boosting refined consumption. The report shows that with the rapid development of economy, the structure of Chinese consumers has also undergone earth shaking changes. Generation Z has gradually become the main consumer in the market. According to the data of the National Bureau of statistics, generation Z will account for about 19% of China’s total population in 2019, and their concept and attitude towards life will also promote the generation of demand for home appliance replacement.
Figure: proportion and personality characteristics of generation Z
From this point of view, under the multiple favorable blessing, consumers’ enthusiasm for home appliance renewal continues to rise. It is expected that the May Day holiday will usher in a “new trend”. The white paper predicts that the market scale of this may day home appliance will reach 52.3 billion yuan.
Set standards and eliminate confusion
Foreseeing this trend, home appliance brands will “push new high” as the main direction of product innovation in the near future. At the same time, this is also the strategic focus of home appliance retailers represented by Jingdong.
Jingdong appliance always accurately grasps the market trend, has a deep insight into the market consumption trend, constantly leads the industry to develop in a diversified and healthy direction, and promotes the industry to accelerate the transformation and upgrading.
Starting from the standard, Jingdong household appliances constantly standardizes the development of the industry, and makes new products grow in the “standard”. Take low sugar rice cookers as an example. After the birth of low sugar rice cookers in 2019, the market penetration continues to rise, and it will be further accelerated in 2020. According to Ovi cloud data, in the first half of 2020, the total retail sales of offline low sugar rice cookers accounted for 16.7%, and the total retail sales of online rice cookers accounted for 5.1%. As a brand new category that has just entered the rice cooker Market for more than one year, low sugar rice cookers are not only injecting fresh blood into the industry, but also becoming a new growth point after the growth of rice cooker Market slows down.
However, due to the lack of standards, brands in the market are mixed, which increases the difficulty for consumers to choose. A few days ago, China Home Appliance Research Institute, together with Jingdong household appliances and major brands, jointly promoted the formulation of the latest group standard – “technical specification for quality evaluation of rice cooked by low sugar electric rice cooker”, to promote the innovation and development of low sugar electric rice cooker products with higher standards, and promote the upgrading of industry standards.
The introduction of this standard has a positive guiding significance for standardizing the development of low sugar rice cooker industry.
In recent years, whenever the emerging category development encounters the lack of standards or the confusion of path selection, JD household appliances will step forward. Up to now, JD household appliances has taken the lead in establishing the industry standards for a variety of new categories, such as smart TV, smart air conditioning, etc. Jingdong home appliances believes that when the industry comes to this stage and the track has real confusion, it needs a voice to come out, establish a hub, clear up the difficulties of the industry, and make the ecology work.
Explore the way for brand business
With the improvement of living standards, consumer demand for home appliances no longer stays in the use of demand, different regions and different groups of people’s demand for products are very obvious.
From the perspective of product use demand, the big appliances, which symbolize the quality of life, show the performance of “becoming bigger”, while the small appliances, which enhance the sense of happiness in life, pay more attention to the segmentation of people.
According to the online monitoring data of zhongyikang, in the first quarter, there were many star categories with high-speed growth in the home appliance market, most of which were related to high-quality consumer appliances such as intelligent and health. Among them, the growth rate of new product washing machines in the clean market was maintained at more than 2000%, worthy of being the growth star in the first quarter; The growth rate of all-in-one washing machine, 8K TV set, fresh air conditioner, sterilization and purification air conditioner and other household appliances upgrading categories remained in three digits, with 395%, 268%, 200% and 171% respectively. The all Italian coffee machine, low sugar rice cooker, independent dishwasher and other household appliances improving the quality of life also maintained double-digit growth.
Figure: development status of Q1 online star market in 2021
As of March, the retail sales of TVs above 75 inches accounted for 28%, up 5% year on year, and that of refrigerators above 500L accounted for 54%, up 10% year on year; The share of washing machines above 10kg was 76%, up 8% year on year; The share of small volume rice cookers below 3L increased to 23%, up 2 percentage points year on year.
In general, home appliances are developing in the direction of intelligence, laziness and automation, and smart home appliances are favored by consumers. According to the calculation data of zhongyikang, the market scale of smart home appliances will reach 272.7 billion yuan in 2020, accounting for 43% of the total home appliances.
Figure: calculation data chart of smart home appliances consumers may buy in the future
As a leading domestic appliance retail platform, Jingdong appliance continues to help the supply side accurately match the consumption needs of different users. Home appliance manufacturers use technological innovation to continuously introduce new functions, new shapes and new products, leading the high-end upgrading of the home appliance industry.
In the cooperation with home appliance manufacturers, Jingdong home appliance plays the role of “Pathfinder”, leading home appliance brands to find new markets and new growth points, occupying the value highland of various categories of products. Take the air conditioning industry as an example. After the epidemic, air conditioners with health, purification and oxygen delivery are widely praised on the sales platform of Jingdong household appliances, and the shipment volume continues to increase. Having an insight into the needs of users, Jingdong household appliances has built a bridge between supply and demand. Together with Casati, TCL, Hisense, Xiaomi and other enterprises, Jingdong household appliances has jointly launched fresh air air conditioners into the market. Thanks to the help of Jingdong, the brand manufacturers are keen to capture the pain points of the market and achieve a substantial increase in sales and brand premium; For consumers, as the major brands focus on the introduction of fresh air conditioning, to meet the needs of differentiated users.
In the whole process, by connecting supply and demand, JD household appliances has completed the transformation from operating products to operating users, and also eliminated unnecessary detours and uncertainties for the transformation and upgrading of household appliance brands.
The cooperation with air-conditioning enterprises is the tip of the iceberg in the case of Jingdong household appliances promoting the high-end transformation of household appliances brands. In fact, in various segments of home appliances, JD hopes to become the most trusted home appliance retail platform for major brands and consumers by building bridges and exploring the way ahead. Nowadays, in the era of developing domestic circulation and expanding domestic consumption, high-end quality is expected to become the key direction of policy support in the future. Therefore, the structural upgrading of home appliance industry promoted by Jingdong home appliance not only meets the demand of terminal consumption, but also captures the opportunity of the times, continuously helps the value transformation of the industry, and makes contributions to economic growth and people’s pursuit of a better life.