China's home appliance enterprises should use economic turmoil to grasp the dominant power

During the economic turmoil, global household appliance companies have seen two distinct responses: Some companies have tried to reduce the impact of the recession through the shrinking of the business sector, layoffs, and others, while others have chosen to accelerate the expansion of the global market at this time. Haier’s acquisition of Japan’s Sanyo Electric’s white power business and Huayi’s compression and acquisition of a Spanish compressor company are typical examples.

Under the influence of the debt crisis in Europe and the United States, the global demand for home appliances has entered a period of relative decline, and established companies in the world's major household appliances industry have fallen into the market. China is driven by the domestic series of domestic demand stimulus policies, relying on relatively large domestic home appliance market support and becoming the most dynamic market in the world. This provides an opportunity for the steady development of China's home appliance companies. The industrial scale effect brought about by relatively stable market flow supports the steady development of China's home appliance companies, and also accelerates the process of expanding the global market. For China's home appliance industry, the global economic turmoil has made it possible for China's home appliance industry to integrate low-cost global resources. At this time, access to overseas markets, technologies and other resources through integration, mergers and acquisitions will be the best time to enhance global competitiveness.

Due to the limitations of development history, technology reserves and other factors, the Chinese home appliance industry has been at the end of the industrial value chain in the global market and has formed the “Made in China” cognition in the global market. Under the inherent development of the global home appliance industry, foreign-funded enterprises have taken advantage of the industry's first-mover advantage, occupying key industrial resources and a relatively large market and user share. The Chinese home appliance industry has long been in a relatively weak position. But in general, there are two core factors that plague China's home appliance industry: one is the lack of independent brands, and the other is the lack of core technologies.

At present, the external environment for the development of China's home appliance industry has undergone major changes: the global financial crisis has triggered a decline in market demand, the overall scale of household appliances in Japan and the United States has shrunk, and companies in these regions have also faced operating difficulties, or market share decline, or deep-seated. Loss, the global home appliance market has fallen into a global management crisis. In this crisis, Chinese home appliance companies have achieved steady development under the stimulus of a series of domestic demand policies introduced by the country, not only maintaining the overall flow of the entire industry, but also accelerating the pace of expansion in the global market.

Under the support of a huge domestic demand appliance market, China has not only become the world’s largest home appliance manufacturing base, but also has become the most dynamic consumer electronics market. Under this support, China’s home appliance manufacturing capacity has been effectively released, and China’s home appliance market has grown Manufacturing and the big market have become the basic plate for balancing the prices of global household appliances. The huge manufacturing capacity and relatively stable market flow have formed the internal circulation of the development of the Chinese home appliance industry. Under this internal circulation support, Chinese home appliance companies have seized the dominant power of the global home appliance market with the cost advantage brought by the world's largest manufacturing scale. Under the support of the optimal cost structure, Chinese enterprises have accelerated the pace of expansion in overseas markets. Haier has fully confirmed this for the first time in three consecutive years, the first time in the world.

For a long time, China’s home appliance industry has been criticized in the global market for lack of control over key components and key technologies. The demand crisis brought about by the global economic turmoil has provided an opportunity for Chinese home appliance companies to break through this barrier. Under the support of stable market traffic, Chinese home appliance companies have accelerated the process of integrating global technology resources. Haier has acquired Sanyo Electric's white-power-related business and Huayi has contracted to acquire Spain's Cubigel compressor plant. Chinese companies have achieved technology from simple-scale mergers and acquisitions to technology. M&A transformation.

It can be imagined that in the coming period, the vitality of the market consumption brought by the demographic dividend of China will still provide a relatively stable market space for the development of China's home appliance industry. At the same time, the country’s relevant domestic demand stimulus policies will also accelerate the expansion of the domestic demand market. A relatively stable market capacity will help stabilize the manufacturing scale of China's home appliance industry, which will stabilize the overall cost structure of China's home appliance companies. After integrating global technology resources to grasp the changes in global industrial technology, China's home appliance companies are in a global economic turmoil. The period has risen to become a key force in global industrial development and it has begun to grasp the dominance of global industrial development.

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