Equalocean has been continuously paying attention to the overseas market development of Chinese brands. In particular, the home appliances category went overseas relatively early, and some brands, such as Midea, and Haier, have a good reputation worldwide. The Chinese home appliance industry has become globally competitive, and the production scale continues to rank steadily at the top of the world.
In the previous article, When will the Next Dyson Appear? Chinese Home Appliance Brands Going Global Analysis, Equalocean briefly introduced the performance of the Chinese home appliance industry in the global market, pointed out the industry challenges, and analyzed the reasons why the Chinese home appliance industry could continue to grow even during the epidemic. This article will focus on the following areas:
Analysis of the driving factors of Chinese home appliance brands going abroad
Chinese home appliance brands' overseas destination marketsComparison of
Chinese and foreign home appliance brands through detailed data
Overall, the size of the global home appliance industry remained steadily growing in recent years. The Chinese home appliance industry has strong resistance and resilience against market volatility, particularly evident in the background of COVID-19.
The global appliance market was volatile in the early months of the COVID-19 outbreak. Impediments in the supply chain, raw materials and delivery costs slowed the pace of industry development. Thanks to the effective control of COVID-19 spreading and the strong supply chain system in China, the supply of production capacity recovered rapidly, and the overseas substitution effect of Chinese companies was highlighted. Against the backdrop of the negative growth volume of home appliance exports from various countries under the impact of COVID-19, Chinese home appliance exports still achieved a growing volume of about USD 25 billion in 2021 and a CAGR of 12% since 2018.
Driving factors of home appliances going abroad
In addition to the two factors mentioned in the previous article - the development of online channels and better policy - many market trends also provide essential opportunities for the Chinese home appliance industry.
Aqara (Chinese, 绿米) mentioned two reasons in the interview with Equalocean:
Firstly, influenced by COVID-19, many consumers are becoming more conscious of personal health. The importance of smart home appliances, such as TVOC air health companions, natural gas alarms, smoke alarms, and air purifiers, is also being increasingly recognized.
Secondly, the trend of the aging population is a common phenomenon worldwide. Many care and assisted living facilities use intelligent home appliances and devices to provide better client monitoring and care services. In addition, young people are more likely to purchase these home appliances for their parents to help them better cope with different emergencies.
Chinese home appliance brands' overseas destination markets
Chinese home appliances destination market abroad is mainly concentrated in the US, Japan, Germany, the UK, and new markets such as Mexico, Brazil, and Southeast Asia. In particular, the US market accounted for the most export share. However, despite the massive size of the US market, brands such as Whirlpool (Chinese: 惠而浦) and BSH (Chinese: 博西) have long occupied the local market. Facing the high brand loyalty of US consumers, Chinese brands need to assess their strength reasonably to seize the market share.
Comparison of Chinese and foreign home appliance brands through detailed data
Comparison of large appliances
Haier(Chinese: 海尔), Midea(Chinese: 美的) and Hisense(Chinese: 海信) are among the top 10 global home appliance brands. Therefore, we selected these three brands, as well as Whirlpool, the Top1 brand from the US, to compare the big home appliance brands domestic and abroad from three dimensions.
Dimension 1: Top5 traffic regional distribution
According to the geographical distribution of each brand's website traffic sources, the Japanese market is particularly important to Midea. In the US and Brazil, Midea's market share is the largest among the three brands.
Haier's overseas market mainly focuses on the US, Japan and India.
Compared to the other two brands, Hisense has a limited proportion of the traffic volume in overseas markets.
Dimension 2: Websites performance
Monthly Visits: Sum of all visits (non-unique, desktop & mobile) per month. This is an excellent metric for understanding the overall size of a brand,
Monthly Unique Visitors: Average number of individuals driving traffic to a website.
Bounce Rate: Percentage of visitors who enter a site and then leave after visiting only one page.
Midea and Whirlpool have similar monthly visits at the 2 million level, far exceeding the other two brands. In addition, Midea's website has the lowest bounce rate, at 23%, which shows that it has exploited the function of overseas independent websites. This means that the customer stickiness and loyalty of Midea are relatively higher. However, the number of Midea's monthly unique visitors is much lower than Whirlpool, slightly inferior in terms of consumer reach.
Haier's website traffic is about half of Whirlpool's, which means Haier still needs to further explore overseas markets. In addition, its website has a high bounce rate of 55.8% and low visitor stickiness. Despite the excellent overall revenue, there is still space for improvement.
The overall visits to Hisense's international website are relatively low, so Hisense can optimize its website by learning from competitors' websites and industry benchmarks.
Dimension 3: Traffic channel sources
Direct Visit: Traffic from users directly entering the URL, using a bookmark or saved link, etc. Direct traffic can be used as a barometer for brand strength (awareness and demand).
Organic Search: Refers to the search results of a search engine that cannot be influenced by paid advertising. Is the site well-optimized for SEO? A correlation with direct traffic indicates strong brand awareness, as many organic visits are generated by branded terms.
Social: This section shows the leading social networks that drive traffic to the selected site on desktop. This includes sites like YouTube, Twitter, Facebook, Reddit, Douban, and others. A website that generates high and consistent traffic from social networks is likely to have a loyal community of users.
Referrals: A website that receives a large amount of traffic from referrals is likely to have a strong affiliate strategy or enjoy significant media coverage.
Midea's direct visits account is much higher than the other Chinese brands. 96% of the traffic comes from direct visits and original searches, which shows Midea has built excellent brand power and has been recognized strongly by overseas consumers.
Original search is the primary source of Haier and Hisense's traffic, showing their objective overseas brand power. It is worth noting that 15% of Hisense's traffic comes from social media searches, reflecting its efforts in social media marketing.
However, all three Chinese brands have a small percentage of referrals. In the future, brands can utilize the power of association to attract traffic, build brand power and trigger subconscious associations among users; at the same time, they can make more efforts in overseas social media to deeply explore potential users.
Comparison of small appliances
Since COVID-19, the demand for cleaning for consumers has increased significantly. Smart cleaning appliances occupy the majority of the small home appliance market. Therefore, we selected this category to analyze domestic and overseas small home appliance brands. The US brand iRobot's revenue has always been the first in this category, while Ecovacs Robotics Co., Ltd.(Chinese: 科沃斯, 603486:SH) is ranked second, and the domestic Dreame Technology (Chinese: 追觅科技) also performs well. Therefore, we selected these three brands for comparison.
Dimension 1: Top5 traffic regional distribution
iRobot's primary market is still in the US, and the global layout has not yet been formed.
Europe, US and Japan are the main overseas markets for Ecovacs and Dreame.
In particular, the duration of web page visits of Dreame in the US market is quite long, about 6 minutes and 44 seconds, which shows that Dreame precisely fits the needs of consumers and has gained high market recognition.
Dimension 2: Traffic channel sources
The three brands have a similar proportion of traffic source channels, of which original search is the main way, indicating that Ecovacs and Dreame have successfully built overseas brand power and gained recognition from overseas consumers.
Dreame's proportion of social media and referrals is much larger than the others. Hao Yu, founder & CEO of Dreame, mentioned in the interview with Equalocean that Tiktok is a vital traffic channel in social media. Potential users can go to Amazon stores and brand websites through Tiktok. In addition, on YouTube, Dreame tried cooperating with YouTubers in various fields such as daily life, games, autos and technology, which also achieved excellent performance. This not only means that Dreame has invested a lot in marketing and gained a loyal user base but also has gradually formed brand relevance and led users to notice the brand.
Bottom Line
Chinese home appliance brands are steadily moving forward on the way of going abroad and have gained some positive outcomes in terms of marketing and brand power building. However, Chinese brands still need to make more efforts to consolidate their status and gain more recognition from overseas users.
EqualOcean has always focused on serving Chinese companies to globalize and helping overseas companies and organizations to seize the growth opportunities in China. We believe in the value of globalization, and our mission is to connect China with the world. We will always keep following the development of Chinese brands in the global market in the future.