Abstract: In the first three quarters of 2023, the omni-channel retail sales of small kitchen appliances in mainland China were 38.9 billion yuan, a year-on-year decrease of 9.6%. The omni-channel retail sales of electric baking pans (frying machines) were 1.89 billion yuan, a year-on-year decrease of 1.9%. The main reason is that during the new crown epidemic in 2022, the control policies implemented by the mainland government have increased the time of home life, followed by the expansion of retail sales of small kitchen appliances, and the new crown epidemic in 2023 has been effectively controlled, which has reduced the market demand for small kitchen appliances and reduced the retail sales of electric baking pans (frying machines). With the improvement of the quality of life of mainland residents, there will be more and more types of small kitchen appliances in the mainland, and with the development of technology, the product quality of the small kitchen appliances industry in the mainland will be further improved, and products such as electric baking pans will gradually be active in the public eye.
1. Definitions and Classification
The electric baking pan is a tool for cooking food, which is heated on one side or on both sides at the same time so that the food in the middle is heated at a high temperature to achieve the purpose of cooking food. In addition to being commonly used to make pancakes, potstickers, tortillas and other pasta, electric baking pans can also be used to make barbecue, teppanyaki, grilled chicken wings, etc. According to the design classification, electric baking pans can be divided into flat-bottomed electric baking pans, concave and convex electric baking pans and clamshell electric baking pans.
Second, the business model
1. Procurement mode
The procurement of electric baking pan manufacturers is mainly for the procurement of raw materials. The raw materials purchased by the company mainly include metal materials, plastics and electronic components used in the production of electric baking pans. Enterprises in the industry set up a procurement department, mainly using the procurement model of "production and procurement", the procurement department determines the type and quantity of purchased raw materials according to the order demand combined with the actual inventory of finished products and formulates a procurement plan. In order to ensure product quality, the purchasing department has formulated a sound supplier management system and strictly implemented it, and controlled the quality of raw materials from the aspects of supplier development, selection and dynamic assessment.
2. Production mode
The production mode of electric baking pan production enterprises adopts a production mode combining independent production and OEM production. Under the independent production mode, the enterprise mainly adopts the mode of "sales and production". The sales department formulates a production plan every month according to the number of orders placed by customers and makes a reasonable forecast in combination with the historical sales situation, and the production department implements and organizes the production work according to the plan, and the product quality is controlled by the quality assurance department under the enterprise.
Based on the overall strategic layout of the enterprise, making up for its own lack of production capacity and production economy, the company entrusts some products to high-quality foundries with good reputation in the small household appliance industry and certain R&D technology and production strength. The company is responsible for product development and design, and the foundry implements the production process according to the company's product plan. In the production and manufacturing process, enterprises usually begin to send quality control personnel to the foundry to control the whole production process in the trial production stage, and do a series of experiments on the finished product such as drop and function to ensure that the product quality meets the national standards and enterprise requirements. The quality control personnel of the enterprise shall conduct random inspection of the products in accordance with the AQL standard, and the products can only be shipped after passing the inspection.
3. Sales model
Electric baking pan manufacturers sell products by combining online channels and offline channels to achieve external sales. Online channels are mainly divided into B2C model and B2B2C model. The B2C model refers to the opening of self-operated stores on third-party B2C platforms (such as Tmall, Pinduoduo, JD.com, Suning.com, 1688, etc.) to sell products directly to end consumers. The company is responsible for daily operation management, product sales, delivery, maintenance and product after-sales services, and issues invoices according to customer needs. The e-commerce platform is responsible for providing services such as mall infrastructure operation, overall promotion and data analysis, and collects system software service fees, Internet information service fees, market consulting service fees and other fees from enterprises. Under the B2C model, consumers place orders through the stores set up by the enterprise on the e-commerce platform, pay the payment to the e-commerce platform's capital account, and the enterprise delivers the goods to the customer according to the order information. After the consumer confirms the receipt of the goods or the system automatically confirms the receipt of the goods after a certain period of time, the payment will be directly transferred to the fund account set up by the enterprise on the platform, which is used by the enterprise as the basis for revenue recognition, and usually does not generate accounts receivable.
Under the B2B2C model, enterprises directly sign contracts with various e-commerce platforms (JD.com, Suning.com, Vipshop, Tmall Supermarket, etc.) and sell products to them, and then the aforementioned platforms achieve final sales to end consumers. The B2B2C model includes two modes: platform warehousing and dropshipping. In the platform warehousing mode, the enterprise entrusts the logistics company to deliver the products to the designated warehouse of the e-commerce platform, and then the e-commerce platform sells them to the end consumers; In accordance with the obligations agreed in the contract, the enterprise provides after-sales service for the end consumer, and the two parties adopt a regular settlement model, and the enterprise uses the settlement statement issued by the e-commerce platform as the basis for revenue recognition.
Offline channels are mainly distribution models. The enterprise authorizes offline dealers to sell the company's products in the designated area. The company signs a sales contract with the offline dealer, agrees on the supply price, and transports the product to the designated area to complete the handover of the goods according to the order issued by the dealer for each purchase, and the dealer sells it to the terminal by himself. Most of the sales of enterprises to offline dealers are buyout sales.
3. Industry policy
1. Competent departments and regulatory systems
The competent authorities of the electric baking pan industry in mainland China are mainly the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation. The main functions of the National Development and Reform Commission are to formulate relevant industrial policies for the electric baking pan industry, guide the structural adjustment of the electric baking pan industry, and carry out macroeconomic regulation and control of related industries. The main function of the Ministry of Industry and Information Technology is to formulate and organize the implementation of electric baking pan industry planning, plans and industrial policies, and formulate industry technical specifications. The main functions of the State Administration for Market Regulation are to supervise and manage the order of the electric baking pan market, the quality and safety of electric baking pan products, standardization, inspection and testing, and national certification and accreditation.
The self-regulatory organization of the electric baking pan industry is mainly the China Household Electrical Appliances Association. China Household Electrical Appliances Association (CHEAA) is a self-regulatory organization in the home appliance industry, composed of domestic household appliance production enterprises and related enterprises and institutions, and is a social group legal person approved and registered by the state civil affairs department. The China Household Electrical Appliances Association is mainly responsible for the communication between enterprises and the government, assisting in the preparation and formulation of development plans and economic and technical policies for the household appliances industry such as electric baking pans, participating in the formulation and revision of product standards for household appliances such as electric baking pans, and promoting foreign exchanges in the household appliances industry such as electric baking pans.
2. Relevant policies
In recent years, the mainland government has introduced many relevant policies to promote the development of the small kitchen appliance industry, and the electric baking pan industry has also developed. For example, a series of policies such as the "Outline of the Strategic Plan for Expanding Domestic Demand (2022-2025)", "Measures for the Recovery and Expansion of Consumption", and "Notice on Several Measures to Promote Household Consumption" support and promote the development of smart home appliances, including smart electric baking pans, and support the research and development of smart electric baking pans to meet market demand, increase product added value, and improve market competitiveness. "Guiding Opinions on Accelerating the Transformation and Upgrading of Traditional Manufacturing Industry", "Opinions on Accelerating the Construction of Waste Recycling System" and other policies to promote the development of recyclable use in the electric baking pan industry, the electric baking pan industry can respond to the call of resource recycling by using recyclable materials and designing a product structure that is easy to disassemble, which can not only reduce dependence on raw materials, but also reduce production costs.
Fourth, industry barriers
1. Technical barriers
With the continuous emergence of new technologies, new processes and new materials, consumers continue to put forward new needs for small household appliances such as electric baking pans in terms of material, appearance, function and environmental protection. Manufacturers must continue to improve the technical content of products, master more advanced technology, and timely launch new products demanded by consumers, in order to maintain a stable market share in the small household appliances industry such as electric baking pans, and the technical barriers in the small household appliances industry such as electric baking pans are gradually highlighted.
2. Brand barriers
The small household appliance industry such as electric baking pan has a high degree of dependence on the brand, and the brand reflects the product quality, design and market position, and consumers continue to pay attention to the brand when buying products and form a certain brand loyalty. The operation of independent brands often requires enterprises to invest a lot of money, time, personnel and long-term inspection by consumers. In the small household appliance industry such as electric baking pans, it is often difficult for new enterprises to establish a good brand image in a short period of time, so brand awareness is one of the barriers restricting new enterprises from entering the small household appliances industry such as electric baking pans.
3. Talent barriers
Consumers' requirements for products have become diversified and highly standardized, which has put forward higher requirements for the ability of employees in the electric baking pan enterprises in the industry. In addition, with the continuous enrichment of the marketing promotion model, the marketing team is required to have rich market experience, the positioning of different types of products is accurate enough, and the sales channels have a deep understanding in order to always keep up with the pace of channel development, and it is difficult for new enterprises to form experienced professional and technical personnel and sales teams in a short period of time, forming talent barriers for new entrants.
4. Scale barriers
Usually, small household appliance manufacturing enterprises such as electric baking pans will produce scale effects after reaching a certain scale, so as to effectively reduce the production cost of unit products, and have higher profit margins to invest in research and development, upgrade production lines, and recruit talents, forming a virtuous circle. The raw materials required for the production of small household appliances such as electric baking pans are highly volatile, and strong cost management and scale advantages are crucial to the stable development of small household appliances such as electric baking pans.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the industrial chain of the electric baking pan industry in China is mainly the raw materials and parts industry, the main raw materials are steel, plastics, etc., and the parts are electronic components such as resistors. The midstream is the production and manufacture of electric baking pans. The downstream is mainly sold to consumers through various sales channels. The industrial chain of China's electric baking pan industry is shown in the figure below:
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