China’s premium home appliances are winning domestic and global market share

Business & Technology

Chinese people are upgrading their home goods, turning the domestic market for high-tech appliances into fertile ground.

Image via Sidekix Media.

Ningbo Qingmei Electric Appliance Technology 轻美电器, a smart dishwasher manufacturer established in 2019, received “tens of millions” of Series A financing this week for R&D investment, the construction of factories, and market expansion.

With dishwasher penetration in China still standing at less than 1% (compared with 50–70% in Europe and the U.S.), Qingmei is preparing itself for a market explosion, but in order to thrive in China’s competitive domestic market, the company is focusing on high-end products and competing in foreign markets.

The context: In March, Chinese home appliances manufacturers announced a new round of price increases, the latest since 2020: For example, as of March 27, the average price of refrigerators increased by 810 yuan ($127) year-on-year to 5,981 yuan ($940), and the average price of washing machines increased by 415 yuan ($65) year-on-year to 3,961 yuan ($622).

The reason is twofold: The soaring costs of raw materials like copper and aluminum, and sluggish growth in the domestic market.

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However: The market for high-quality smart products is growing rapidly. Domestic manufacturers are focusing their attention on the premium segment as well on exports:

Hisense expects its overseas revenue to surpass domestic revenue within the next three years. In 2021, 42% of the company’s total revenue was based on exports.

The takeaway: China’s domestic manufacturers of home appliances have for years faced the problem of sluggish domestic demand — very few people have the habit of using dishwashers, for example — and fierce competition. Increasingly, however, they are now upgrading their R&D and technology and transitioning to high-end products.