China White Goods Market to Achieve Solid Growth in 2010
Refrigerators, air conditioners and washing machines set to enjoy increased shipments.
Continuing its strong performance from last year and largely untouched by the effects of the global economic recession, the China white goods market will enjoy robust growth in 2010, spurred by healthy domestic demand and vigorous government support, according to iSuppli Corp.
Shipments of refrigerators, air conditioners and washing machines will reach 161.5 million units in 2010, up
12.6 percent from 143.4 million last year. Together, these products form the crux of China’s white goods market—a segment that derives its name from the original white enamel paint finish of products, despite availability now in other colors. Other white goods of less consequence in the China market tracked by iSuppli include microwave ovens and induction cookers.
Among the three major white goods, refrigerators will post the highest growth this year, up 15.3 percent to 55.9 million units from 48.5 million in 2009, iSuppli data show. Air conditioners are next, up 11.6 percent to 64.4 million from 57.7 million in 2009. Washing machines come in third, up 10.8 percent to 41.2 million from 37.2 million.
Solid Growth to Continue Despite Weak Exports
The expected healthy performance in 2010 of white goods in China continues the expansion that started last year, when the market rose almost 8 percent from 2008 levels and, for the most part, escaped the downturn felt by most industries.
The only point of vulnerability could be found in the export sector, where all three major white goods suffered declining shipments to the United States, Europe and Japan—the destinations most seriously impacted by the economic slump. Exports are expected to improve gradually, but shipment volumes in the near term will not return to the high levels enjoyed by the market prior to the economic downturn.
Nonetheless, the overall outlook for the future remains bright, with growth to continue uninterrupted until the end of the forecast period in 2014, iSuppli figures indicate.
Among the drivers contributing to growth is a dynamic domestic sector, thanks to two government subsidy programs.
In the Home Appliances to Countryside program, which aims to spur demand in China’s rural market, rural consumers receive subsidies of up to 13 percent of the purchase price of home appliances. As of February, according to statistics from the Chinese government, sales of appliances to the countryside through this program have reached 37.7 million units, worth a total of 69.3 billion renminbi, or $10.2 billion.
In comparison, the Old for New subsidy program is targeted at stimulating urban consumption, providing subsidies of up to 10 percent for consumers that sell their home appliances in order to purchase new ones. As of February, sales have amounted to 23.2 billion renminbi, or $3.4 billion, in the nine pilot areas where the program is in effect. The maximum subsidies to which consumers are entitled come out to more than $50 for air conditioners, over $40 for refrigerators, and over $35 for washing machines.
Continuing its strong performance from last year and largely untouched by the effects of the global economic recession, the China white goods market will enjoy robust growth in 2010, spurred by healthy domestic demand and vigorous government support, according to iSuppli Corp.
Shipments of refrigerators, air conditioners and washing machines will reach 161.5 million units in 2010, up
12.6 percent from 143.4 million last year. Together, these products form the crux of China’s white goods market—a segment that derives its name from the original white enamel paint finish of products, despite availability now in other colors. Other white goods of less consequence in the China market tracked by iSuppli include microwave ovens and induction cookers.
Among the three major white goods, refrigerators will post the highest growth this year, up 15.3 percent to 55.9 million units from 48.5 million in 2009, iSuppli data show. Air conditioners are next, up 11.6 percent to 64.4 million from 57.7 million in 2009. Washing machines come in third, up 10.8 percent to 41.2 million from 37.2 million.
Solid Growth to Continue Despite Weak Exports
The expected healthy performance in 2010 of white goods in China continues the expansion that started last year, when the market rose almost 8 percent from 2008 levels and, for the most part, escaped the downturn felt by most industries.
The only point of vulnerability could be found in the export sector, where all three major white goods suffered declining shipments to the United States, Europe and Japan—the destinations most seriously impacted by the economic slump. Exports are expected to improve gradually, but shipment volumes in the near term will not return to the high levels enjoyed by the market prior to the economic downturn.
Nonetheless, the overall outlook for the future remains bright, with growth to continue uninterrupted until the end of the forecast period in 2014, iSuppli figures indicate.
Among the drivers contributing to growth is a dynamic domestic sector, thanks to two government subsidy programs.
In the Home Appliances to Countryside program, which aims to spur demand in China’s rural market, rural consumers receive subsidies of up to 13 percent of the purchase price of home appliances. As of February, according to statistics from the Chinese government, sales of appliances to the countryside through this program have reached 37.7 million units, worth a total of 69.3 billion renminbi, or $10.2 billion.
In comparison, the Old for New subsidy program is targeted at stimulating urban consumption, providing subsidies of up to 10 percent for consumers that sell their home appliances in order to purchase new ones. As of February, sales have amounted to 23.2 billion renminbi, or $3.4 billion, in the nine pilot areas where the program is in effect. The maximum subsidies to which consumers are entitled come out to more than $50 for air conditioners, over $40 for refrigerators, and over $35 for washing machines.
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