Homch Cable


A major reshuffle of the global home appliance landscape

by | May 18, 2024

Downsizing and withdrawing from the home appliance business are now becoming the norm for international traditional brands. After the operation rights of Whirlpool China are sold to Galanz in 2021, Whirlpool’s business in Europe and Africa will also be “taken over” by Turkey’s Achilik Company. Whirlpool’s European business will be integrated with Achilik’s home appliance business, and Operated through new home appliance company BekoEurope. Whirlpool holds a 25% stake in the joint venture.


Currently, the only regions where Whirlpool Home Appliances operates independently are the United States and India. Industry insiders believe that the possibility of Whirlpool further selling its actual operating rights in the remaining two markets cannot be ruled out. The global home appliance landscape is gradually being rewritten. As China’s home appliance industry collectively enters the stage of going overseas, traditional home appliance brands including Toshiba, Hitachi, AGE, Philips, Siemens and other traditional home appliance brands continue to sell their home appliance business and seek transformation.


Advancing eastward and retreating west, changing status

The additive effect of international brands on enterprises is in home appliances. In 2023, international brands including Whirlpool China, Bosch Siemens and other international brands are having a hard time. Among them, Whirlpool China has achieved the results of “reducing revenue and increasing profits”. Although it achieved a year-on-year increase of 190.36% in net profit attributable to the parent company, Whirlpool China has suffered seven consecutive declines including 2023.

BSH’s full-year revenue in 2023 will be the same as the previous year, reaching 14.8 billion euros, but actual revenue has declined to varying degrees in most major regions. Among them, sales fell by 11.3% in North America, 10.5% in Greater China, and 6.5% in Europe. In the emerging markets of Eastern Europe, the Middle East and the African continent, revenue also fell by 2.2%, and it completely exited the Russian market.

In contrast, Chinese companies are rising rapidly. Among them, Haier Smart Home delivered the best performance in history, achieving revenue of 261.428 billion yuan, a year-on-year increase of 7.3%, and net profit attributable to shareholders of listed companies reaching 16.597 billion yuan, a year-on-year increase of 12.8%. Midea Group’s operating income in 2023 was 372.037 billion yuan, a year-on-year increase of 8.18%, and the net profit attributable to the parent company was 33.7 billion yuan, a year-on-year increase of 14%.

Behind this is a major reshuffle in the global home appliance market, mainly showing the trend of “advancing eastward and retreating west”. In the past ten years, there have been numerous cases of European, American, Japanese and Korean home appliance companies withdrawing from the Chinese market or even withdrawing from the home appliance market, or selling their home appliance business to Chinese home appliance companies. China’s home appliance companies have grown in the cracks of foreign brands at the beginning and now hold the position of manufacturing more than half of the world’s home appliance products, achieving a counterattack.

Industry insiders believe that similar to the logic of the global manufacturing industry chain shift, the home appliance industry first developed in Europe and the United States. When the economies of Europe and the United States developed, the focus of home appliance manufacturing shifted to Japan, where the economy began to take off. When the Japanese economy developed to a certain extent, , the focus of home appliance manufacturing shifted to South Korea and China, whose economies began to rise.


Chinese home appliances accelerate overseas expansion

In order to further accelerate their overseas expansion, home appliance giants have made many big moves in recent years. Among them, Midea Group recently submitted listing documents to the Hong Kong Stock Exchange again. Industry insiders believe that Midea Group’s goal in going to Hong Kong is to further expand international business, increase investment in research and development to improve technological capabilities, and supplement working capital. Perhaps, you can exchange for technology through a “buy, buy, buy” strategy.

Midea Group quoted a Frost & Sullivan report as saying that Midea Group is the world’s largest home appliance company based on sales and revenue in 2023. Midea Group’s expectations for the global market are further breakthroughs in the high-end market. Domestically, Midea’s brand positioning may focus more on cost performance to meet the needs of consumers. This market strategy requires relatively low prices to attract more consumers and expand market share.


But for Midea, the globalization strategy should not only be about sinking, but also needs to be high-end. The competitiveness of Midea Group’s products overseas still requires continuous increase in research and development. At the 2023 Midea Group shareholders’ meeting, Midea Group executives said that the listing of Hong Kong stocks is not to raise funds. “The most fundamental reason is that Hong Kong stocks are breakthrough, convenient and rapid.”


It is worth noting that Midea’s biggest rival in overseas markets is not BSH, Samsung, LG, Sony and other brands, but Haier Smart Home. In recent years, Haier Smart Home has built a matrix of mid-to-high-end home appliance brands in different markets around the world by acquiring Japan’s Sanyo’s white goods business (currently under the AQUA brand), the United States’ GE Home Appliances business (GEA), New Zealand’s Fisher & Paykel, and Italy’s Candy.


Judging from Midea’s future strategic performance and Haier Smart Home’s global brand layout, China’s home appliances have entered a counterattack stage in overseas expansion. Brands that have continuously exported home appliances to China are facing challenges from Chinese home appliances in the local market. Especially in the Japanese and Korean markets, while local brands such as Samsung, LG, and Sony are still strong, Chinese home appliances are still opening up gaps. Home appliance brands such as Haier and Hisense have successfully entered the Japanese market and won the favor of young consumers.


Euromonitor international market analyst Taro Yamato pointed out that with the rapid advancement of China’s domestic Internet of Things and artificial intelligence technology, the technical strength of Chinese home appliances is constantly improving. “Chinese manufacturers have the ability to provide more advanced networking functions and AI than large Japanese companies.” Function”. Many elderly Japanese people still have a deep-rooted “belief in domestic products” and prefer domestic Japanese brands when choosing. However, young Japanese groups have been completely captured by Chinese brands and appreciate the benefits brought by advanced and practical designs and high cost performance.