What domestic companies need to think about is that
How to go out with high quality
Recently, the news of "Europeans buying up China's electric blankets" has frequently appeared on hot searches, and close heating products such as electric blankets are selling well in Europe. At the same time, "winter artifacts" such as warm underwear, heating treasures and bareleg artifacts are also entering the lives of European people.
According to the data of the China Household Electrical Appliances Association, in the context of the decline in the export value of most home appliances to Europe in 2022, the categories of electric heaters and electric blankets have grown against the trend, and the cumulative export value from January to July has reached 490 million US dollars and 33.4 million US dollars, respectively, of which the growth rate of electric blankets has reached 97%. According to the General Administration of Customs, in July this year alone, the EU27 imported 1.29 million Chinese electric blankets, an increase of 150% month-on-month. At the same time, on AliExpress, the sales of heating products such as heaters and foot warmers have also achieved rapid growth in major European countries.
Under the situation that heating products such as electric blankets are hot in Europe, small household appliance enterprises located in Zhejiang, Guangdong and Hebei have made gains. Industry insiders told China News Weekly that in the current market environment, European consumers are in urgent need of more cost-effective heating methods, and low-power small appliances made in China have become a new choice. It should be noted that the technical and financial threshold of electric blankets is not high, and the more noteworthy issue is the low safety factor, "once the product quality problem occurs in Europe, the company may suffer a huge fine."
Looking for low-cost "wintering artifacts"
"Recently, the weather has been very cold, and everyone has begun to wear down jackets," Gao Li, a Chinese who has lived in Stuttgart, Germany, for six or seven years, told China News Weekly, and the winter in Germany is very cold and long. The minimum temperature in her area is generally 0 degrees Celsius in winter, which is acceptable.
As the Russian-Ukrainian conflict continues and there is a shortage of energy in Europe, she has sensed that the energy problem seems a bit troublesome. "The energy crisis is reflected in all aspects, energy is expensive, everything has become expensive", Gao Li observed, now neighbors will turn off the lights early at night, saving electricity bills, before everyone will not be like this. What is even more exaggerated is that many families who rely on fireplaces for heating are rushing to buy wood, and the wood can even be stolen in the garden, and now everyone is racking their brains to hide the wood.
Gao Li's Chinese neighbors are peddling electric blankets to her, and she didn't expect this kind of childish use to appear frequently in her life recently, but she mentioned that she is still hesitant to get it. "Everyone faces a different situation, some families live in villas, that kind of old house is very large, need more heating costs, the cost is three or four times more expensive at once, it is unbearable, and the neighbor's electric blanket is sold very widely recently."
The head of DMS cross-border e-commerce told China News Weekly that European energy prices have soared due to the impact of the Russian-Ukrainian conflict. In recent weeks, the forward price of daytime electricity in Germany in the fourth quarter of this year has soared to more than 1,200 euros ($1,200) per megawatt-hour, compared with more than 2,500 euros in France. The usual price is around 50 euros.
"People are looking for lower-cost alternatives to heat this winter," the person in charge stressed, adding that on a foreign e-commerce platform, the online search volume of "electric blanket" soared by 342% last week, and the sales of some platforms increased by 57% compared with the same period last year. Even her own rental house in the UK, the rent has risen by almost a hundred pounds, more than 500 pounds, including 100 to 300 pounds a month for electricity.
A blogger in Europe told social media about his experience with an electric blanket for Amway, an elderly British couple neighbor, who placed an order for use and gave a positive review. But until then, most Europeans didn't know what an electric blanket was. The blogger said that the electric blanket on Amazon's platform is actually gradually on the cabinet from 2020, and it began to increase after September this year.
According to Magic Mirror market intelligence data, in the Amazon electric blanket market in the five European countries (Britain, Germany, Spain, France and Italy) in August, the total sales reached 30 million yuan, and the sales volume was 87,000 pieces, an increase of 233% month-on-month. Gao Feng, director of market intelligence research at Magic Mirror, told China News Weekly that the sales data was also rising in July, but it was not so obvious. Among them, the United Kingdom and Germany rose more prominently, reaching a doubling growth.
Gao Feng pointed out that this heating equipment is welcomed by the European market, in fact, since last year, small household appliances such as air source heat pumps and heating treasures have entered various promotions last year, and this year they have suddenly sold out, thus entering the public eye. In addition to the impact of the Russian-Ukrainian conflict, there is also a background that the epidemic has caused everyone to be more cautious in consumer spending, tending to spend less money to solve the problem of actual heating.
According to British energy supplier Octopus, the typical home can save £300 a year on their energy bill by choosing an electric blanket instead of heating the entire house. It is estimated that heating an entire house costs around £4 a day, but energy-efficient electric blankets cost only 2p to 4p per hour. The head of cross-border e-commerce mentioned that many households are preparing for higher energy costs this winter, and warm clothes and energy-saving appliances, such as air dryers and air fryers, are selling well.
Factory orders are scheduled for the New Year
Since the spring of this year, Yu Xuehui, president of the Cixi E-commerce Association, has continuously received inquiries from European customers about heating products, and he said that there are still many people who come to inquire.
"Electric blankets and heaters, in high demand. The orders for the electric blanket factory are scheduled until January next year or even later, which will not be the case in previous years," Yu Xuehui told China News Weekly, and many manufacturers in Cixi are working overtime to produce electric blankets and heaters, and many orders are currently unable to be opened.
"The export market for heating equipment has grown significantly, it can be said that the market is very hot, individual enterprises have received orders up to several hundred million", Zhou Huaishan, executive director of Yishang Think Tank, pointed out that the industrial base of heating equipment is located in Cixi, Ningbo, Yiwu is mainly trade, and the demand for heating products has increased significantly since this year.
According to public data, there are more than 100 heater manufacturers in Cixi, Ningbo, Zhejiang, accounting for one-third of the country's exports, and it is one of the more important small household appliance industry belts in China. According to customs statistics, from January to August this year, Cixi heater exports of 3.35 billion yuan, an increase of 26.3% year-on-year, of which exports to the EU 1.53 billion yuan, an increase of 55.2%.
In addition to Cixi, Zhejiang, Dongguan in Guangdong and Xinle in Hebei are also relatively core industrial belt concentrations. Previously, there were also media reports that the sales of electric blankets in an electric blanket factory in Dongguan, Guangdong Province, this year were 3 times that of the same period last year, and it was also the best record in the past five years. In June this year, the factory equipment was operated 24 hours a day, three shifts, and specially expanded for this purpose.
In this year's electric blanket sales boom, a head electric blanket manufacturer in Xinle seized some business opportunities. A staff member told China News Weekly that southern manufacturers prioritized the discovery of business opportunities for products such as electric blankets, won orders, and began to prepare in the middle of the year. Subsequently, due to the increase in demand for European orders, their production capacity could not meet the orders, and northern manufacturers gradually received these orders. This year's electric blanket market has a conductive effect.
"This year, the entire company has increased by at least 30% of its orders, all from export orders. At present, the factory is already working overtime to produce, but there are still many orders that have not been able to produce and ship, which is a big problem," the person pointed out, these orders are mainly from Ukraine, Russia and many European foreign trade companies. He believes that it is not yet winter, and many European foreign trade companies may stock up on some goods first, and then they can sell them at a good price.
"Usually the heater order is the traditional foreign trade OEM order, simply put, the customer placed an order over, to the customer OEM production mode, generally from the order to the packaging material takes a month cycle, and then through the sea past it takes another month, then it may be Christmas, now to inquire about the customer is actually more hesitant, worried about the order after the inventory." Yu Xuehui stressed that behind the strong demand for orders this year, there are actually reasons for the overall postponement of the sales season. In previous years, orders could be obtained in the spring, but due to the Russian-Ukrainian conflict and the epidemic, European customers were in a wait-and-see state in the first half of the year, so the peak production season of heating equipment has moved to the present.
Exporting electric blankets is not an easy task
In a positive voice, A-share electric blanket manufacturer Chengdu Rainbow Electric Appliance (Group) Co., Ltd. (hereinafter referred to as "Rainbow Group") has risen by 132% since September, ushering in 8 up and down boards in 12 consecutive trading days, with a market value of 2.539 billion yuan.
Rainbow Group issued the "Announcement on the Reply to the Shenzhen Stock Exchange's Letter of Concern" on the evening of October 13, saying that in 2022, the company obtained some export orders for some products, but the overall quantity was small and the amount was low. By the end of June, household flexible heating products such as electric blankets had achieved overseas sales revenue of 210,000 yuan. At present, the order amount in hand is about 1.33 million yuan. The Group pointed out that at present, there have been no material changes in the fundamentals of the company's business, the company and its holding subsidiaries are operating normally, and there is no material information that should be disclosed but has not been disclosed.
According to the financial report data, the revenue of Rainbow Group in the first half of this year reached 533 million yuan, down 10.5% from the same period last year, and the profit was 71 million yuan, down 29.48%, of which household flexible heating products accounted for 64.93% of revenue, and the main sales areas were Sichuan, Southwest and Yunnan-Guiyu.
Rainbow Group previously replied to investors on the investment interactive platform, the company's current export business is still actively developing, and received some small orders from Britain, Germany and other countries in the early stage. The group has also previously responded to investors that some models of electric blankets of the company have been certified by Europe.
Gao Feng mentioned that compared with Chinese and foreign electric blanket products, it can be found that electric blankets in foreign markets generally emphasize safety, and products also need to pass EU safety certification, in addition to the material is also different from domestic products, and different power supply power supplies are also needed in European countries.
The electric blanket industry is one of the traditional industries of Hebei Xinle, with annual production and sales accounting for 40% of the country's total sales. At present, in Xinle, there are 44 electric blanket manufacturers and 5 electric blanket accessories manufacturers that have passed 3C certification, and the annual output of electric blankets has reached 16 million. The staff of the above-mentioned electric blanket manufacturer told China News Weekly that in Xinle, it has the ability to make export orders, and what can meet the EU standards is a large factory with strength, and many small factories can only do such a link as "stringing and ripping".
"It is very important to get the export qualification, the production process of foreign electric blankets is not the same as the domestic, we have a separate production line, the export is the need to have a certain strength of the manufacturer to do", the staff stressed that the export of electric blankets to Europe has its own requirements in the material and standards, generally pay more attention to safety and environmental protection, the overall product quality requirements are very high.
Liu Buchen, a senior observer of the home appliance industry, said that electric blankets are actually a niche industry, and even have faded out of the mainstream home appliance vision. The technical threshold of the electric blanket is not high, the capital threshold is also relatively low, and the more worthy of attention is the low safety factor, he further pointed out that the principle of the electric blanket is to implant a resistance wire in the electric blanket, and after the power is on, the resistance wire generates heat to provide warmth, if there is leakage or wetness is not safe.
"At present, the hot sales of electric blankets are based on the soaring market in the short term under a specific background, which is an emergency material, so we should pay more attention to product quality and safety issues, and once product quality problems occur in Europe, enterprises may encounter huge fines," Liu Buchen stressed.
How to go out with high quality?
Zhang Zhouping, director of the B2B and cross-border e-commerce department of the E-commerce Research Center of the Network Economic and Social Society, analyzed that at present, China is the world's most important supplier of electric blankets. At present, the electric blanket-related products sold on cross-border e-commerce platforms are still cost-effective to attract consumers. In addition to electric blankets, in the current market environment, European consumers are in urgent need of more cost-effective heating methods, and "Made in China" low-power small appliances have become a new choice.
According to data from the General Administration of Customs, the export data of small household appliances has grown significantly, with an increase of more than 600% in 2021. In addition, on a cross-border export platform, the shipment of domestic smart small household appliances increased by 150% in the third quarter.
Liu Buchen analyzed that China has become the world's largest small household appliance production base, after the epidemic in 2020, experienced the rapid growth of the domestic market, the current growth rate has slowed down, and it is urgent to release production capacity. Therefore, in the past two years, many enterprises have chosen to go to sea. In the process of going to sea, China's small household appliance brands are awakening, but the reality is that the degree of internationalization is low, and the influence of their own brands is limited.
According to the magic mirror market intelligence, most of the best-selling electric blanket brands in Europe in 2022 are still European local brands, and one cross-border e-commerce brand from China ranks among the top 10, which is from Wuxi's Shangbai Global Company. Liang Zhenpeng, an analyst in the home appliance industry, believes that electric blanket products have a low unit price, a small market capacity, and as a durable consumer product, many people will not repurchase it for many years after purchase. He said that for small products like electric blankets, most companies will not consider operating independently because of the high cost.
Zhang Zhouping observed that before the current situation in Europe has not been improved, the sales of electric blankets may continue for a period of time, and peripheral products related to electric blankets will also usher in a wave of small peaks in sales. It is worth noting that electric blankets are seasonal products, and the heat will naturally drop after the season, he said, when planning production, enterprises should be laid out according to demand and their own actual conditions.
Gao Feng pointed out that at present, Chinese enterprises are mainly doing cross-border processing or OEM to save costs and energy and export. Enterprises through the making of their own brands for cross-border trade, is still in a relatively rudimentary, low popularity. Extending to the category of small household appliances, he suggested that enterprises can consider entering the market with similar living habits to the Chinese market, and cultivate consumers through a better entry point.
"Independent brand means that each cooperation link has a huge profit to operate, at present, a number of high-end small household appliances enterprises have emerged in China, solidly improve the level of technology research and development and product innovation, improve the reliability, and increase the unit price of customers, which can gradually realize the branding", Liang Zhenpeng believes that China's small household appliance enterprises should seek truth from facts and develop according to their actual conditions. Whether it is export or domestic sales, we must do what we can.
Zhou Huaishan stressed that cross-border e-commerce is to some extent reconstructing the international retail market. Domestic enterprises still have a long way to go in the value chain, and what needs to be considered is how to go out with high quality and benefit from the valuable high-end industrial chain.
Author:Meng Qian
Source: China News Weekly