The Kitchen Appliance Market in China (Smart Guide)

China’s kitchen appliance market expanded considerably over recent years. According to mainland market surveys, the total value of China’s kitchen furniture market should reach $10 million in 2021. In the long run, urbanization is expected to drive steady expansion in the kitchen appliance industry. As of 2017, China’s urbanization rate stood at 58.5% and is projected to rise by about one percentage point annually. Urbanization, the real estate market, and smart home appliances are all seen as conducive to the development of the kitchen appliance market in China.

Chinese people want more design homes

As consumers’ brand awareness continues to heighten, more emphasis is being placed on product design, functions, and features, while price sensitivity is falling. Medium to high-end products is becoming the mainstay of the consumer market, while the demand for eco-friendly and energy-efficient kitchen appliances is also growing as consumer environmental awareness increases.

 

Imported kitchen market is growing

More and more people spend their money on enjoyment-centric consumption or improvement-centric consumption. When the China Furniture Association released the “2018 China Furniture Industry Information Report.”, data show that China’s furniture imports totaled US$3 billion in 2017. The year-on-year increase was 15%, and furniture imports hit a new high in nearly a decade. So under this background, it is highly positive that imported-furniture consumption will keep a positive development.

The furniture industry, and so the kitchen too, have a highly separated structure. According to the survey, industry giant such as IKEA has only 3% market share globally. In China, the major part of the market share belongs to the Chinese native brand. So in face of the Chinese market where the market margin is still very high for high-end imported furniture, how should a foreign furniture brand take its first step to the Chinese market?

 

The success of microwaves and small home appliances in China

In 2020, the microwave market soared in the Middle Kingdom. Because of the Covid-19 pandemic, there was a switch in consumer behavior. The Chinese spend more time at home and turn more easily to the kitchen and home purchases. According to the e-commerce platform JD.com statistics, young consumers mostly spent on their kitchen during 618 Shopping Festival, in June 2020. The sales of large home appliances increased by 17% and even reached 28% for small home appliances in 2020.

Chinese netizens often spend a lot of time on social media and live streaming to find new kitchen and home appliances to purchase. For instance on Kuaishou, the Chinese are more willing to spend more on products related to their home. Kuaishou is a video-sharing app in China with 262 million daily active users (DAU). On average, Chinese users spend 80K RMB for home decoration and 9K RMB for electronic appliances. In 2021, the microwave market in China should reach a total revenue of $1 billion.

 

Learn from the international giant IKEA

IKEA is known globally for its low prices and innovatively designed furniture. In China, however, it faced peculiar problems. Its low-price strategy created confusion among aspirational Chinese consumers while local competitors copied its designs. IKEA identified the strategic challenges and made attempts to overcome them. One of the main problems for IKEA was that its prices. Considered low in Europe and North America, they were higher than the average in China. Since 2000, IKEA has cut its prices by more than 60 percent.

IKEA also had to tweak its marketing strategy. In most markets, the company uses its product catalog as a major marketing tool. In China, however, the catalog provided opportunities for competitors to imitate the company’s products. Instead, the company is using Chinese social media and micro-blogging website Weibo to target the urban youth.

Manage a marketing plan is a key to success

Therefore business in China involves a lot of hard work and awareness of consumer behavior. If you find yourself weak in understanding consumer expectations, professional marketers can be of great use. In the field of the kitchen furniture business too, the owner has to have a complete arsenal at the disposal to score big market share. Here is what a kitchen furniture business owner in China needs to have for meeting the promotion objectives.

 

 

Being consumer-oriented

French furniture brand Ligne Roset has reduced 25% and 15% of its price in the Chinese market both in 2015 and 2016. Norwegian brand Stressless has already set its price in the Chinese market the same as it in Europe. Some imported brands have even set their price in the Chinese market lower than those in the Japanese and Singapore markets to attract Chinese consumers.

Indeed, Chinese consumers, with their increasing horizons, are more and more reasonable. Imported goods are no longer something untouchable. Consumers pay more and more attention to the design and quality instead of the price tag. It is true that in the first period, imported furniture was still something new and was being worshiped like an idol in the shrine. Consumers with limited knowledge of connaisseur only pursue high price and a distorted imported-furniture market was born under this consuming behavior. The purchase raised the price and the raised price impel continuously the consumer.

But this has changed dramatically these years. With the development of the native brand and more reconnaissance of quality, Chinese consumer needs no more to “worship” imported brand blindly. So Italian brands need to consider their consumer first and set the strategy of their pricing more carefully.

Online presence

Internet usage is exceptionally common in China. The owner of any business in China, including the furniture specialist, should have an online venture to reach a humongous chunk of the audience. To gain more visibility online, thus, one should have an SEO specialist hired. Also, the business owner can take the audience on an online tour to the manufacturing unit to gain more trust and credibility. It will give you better chances of scoring more sales ultimately.

Responsive website

The online presence of furniture starts with building a web property like a website or mobile application. Therefore, any web application or website developed should be responsive in nature. This way it becomes easy to tap the large consumer base active on mobile phones and tablets.

Take a shot at Chinese E-commerce

In the last 10 years, China has made its way to have the most developed e-commerce industry in the world. Main e-commerce platform such as Tmall and JD.com is no doubt an efficient and economical portal for a foreign furniture brand to expand its brand influence. You can improve your brand awareness, accumulate a customer base hence develop your business in the Chinese market.

According to a sales report from Alibaba, only in “11.11” one day, the most influential shopping festival in China, the sales from the top 5 furniture brands account for 10% of the total sales of all brands that participated in the event. With these general e-commerce platforms such as Tmall and JD.com, one can definitely approach the Chinese market with a limited risk now.

Not only limited to big shopping platform, foreign brands who want to have a share in the Chinese market. So, they can also cooperate with specialized online furniture selling platforms such as ITALYCLASSICO. This platform has a good reputation with real estate developers. Cooperation with real estate developers means a chance to be the furniture supplier for luxury real estate projects. Most developers also believe that using imported furniture is more attractive to consumers.

A social media account makes different

Approaching the Chinese market using these platforms can be a “hard bone”. For international brands, the communication barrier, and the ever-changing commercial policies in China. It is hard for a foreign brand also in that the digital marketing tools are totally different from those in the Western world. The disappearance of Google, Facebook, and Instagram can make brand communication an impossible mission. A “new” company that has definitely no idea what’s going on in China. So finding a good business partner that knows the digital approach to Chinese can be fundamental for the business strategy you may choose.

To fathom the online world further, the furniture business enterprise in China should be active on social media networks too. Posting the latest product information creatively, launching promotional events, and giving information about them on social media accounts are some of the ways furniture businesses can try to reach consumers.

Contact us to understand the opportunities and possibilities for your brand in China