subject: The Profit Of China Kitchen Appliances Reach Up To 30%, The Price War Can Hardly Be Avoided [print this page] The average profit of China kitchen appliances industry reaches up to 30%, which is far more than 5%-10% of traditional household appliances, so the price war can hardly be avoided.
Recently, a number of domestic household appliances giants such as Changhong, Haier, Midea, etc. are moving into the inconspicuous kitchen appliances field one after another, they have found new main battlefield except the mobile phone, digital, color TV, kitchen utensil, refrigerator and washing machine market, in which the competition is always fierce. The main reason of the cookware appliances market suddenly becoming the phoenix is its high profit margins. So why dose the kitchen appliances industry own high profit margins in current environment that the profit of Chinese household appliances market is generally little? And how long can its windfall profit maintain?
Compared with developed countries, the popularizing rate of Chinese kitchen appliances market is lower, and it still in its early growth stage. Currently the popularizing rate of dishwasher in American, German, French and British family has reached 60% -70%, while in large and middle-sized cities in Chinese mainland, it is less than 1%; the popularizing rate of microwave ovens in Chinese large and middle-sized cities is about 10%, but in developed countries it has been more than 80%; in Chinese 100 million urban families, the ownership rate of the integrated kitchen cabinet is only 6.8%, while in European and American countries, it is 35%.
Chinese kitchen appliances market has great potential. In recent years, Chinese kitchen appliances sales is increasing with the speed of 35% every year, in which the annual growth rate of induction cooker is up to 20% -70%, while in mobile phone, digital, color TV and other cookware industry market it is only 10%. In the next 10 years, 33% of Chinese households will move into new houses, and 260 million units kitchen appliances are needed every year. Chinese kitchen appliances market will have the development space that exceeds 500 billion Yuan in the next 5 years.
The average profit of China kitchen appliances industry reaches up to 30%, which is far more than 5%-10% of traditional household uv lamp appliances. Many European-style lampblack pressers profit is as high as 300%, and it is really profiteering. It is reported that the average profit margin of domestic flat-panel TV is only 2%, and many domestic mobile phone outdoor furniture businesses even get loss. As for high profits, large household appliances manufacturers have entered the kitchen appliances market to seize market profits; Changhong, Midea and other manufacturers have the biggest movement. In the beginning of July in 2007, Changhong had announced to the public that they would allocate garment steam money to build the annual production capacity of more than 300 million sets, and mainly kitchenware research and develop lampblack pressers, gas stoves, disinfecting kitchenware cabinet, bath warmer and other kitchen and toilet appliances, as well as the whole kitchen accessory products; in September 2007, Midea Household Appliance Group's subordinate kitchen appliances company and bathroom appliances company combined to establish the Integral Kitchen and Toilet Division.
Foreign enterprises begin to enter Chinese kitchenware appliances market because they are in favor of its generous profits. In 2007, Siemens started to build kitchen appliances production base in Nanjing, and the gross investment was expected to be 160 million U.S. dollars. Panasonic and Electrolux also entered Chinese kitchen appliances market with the breakthrough point of integral kitchen appliances; American Kohler appliances, the world's top kitchen appliances brand, also announced they would increase the kitchenware investment in China.
