Increasing costs and product upgrades promote the price increase of home appliances——

Visit home appliance price adjustment in summer

  "6.18" is approaching, many consumers are looking forward to buying home appliances at lower prices.

However, in offline home appliance stores, many products have quietly increased in price.

  Since the second half of last year, the prices of home appliances such as refrigerators, air conditioners, and washing machines have been adjusted many times, and the prices of some products have increased by more than 25%.

  In the impression of many consumers, the prices of home appliances, especially traditional home appliances, have been in a relatively stable or even declining channel for many years.

Why have the prices of home appliances increased this time?

How do consumers choose?

The increase is not large, the frequency is accelerating

  "If you don't buy it, the price may continue to rise"-This is what Beijing Min Xiaoliu heard most recently in home appliance stores.

"I saw that the price of home appliances is more expensive than years ago, but there is no way. After all, the demand is here, so I still have to buy it." Xiao Liu told reporters that he has been decorating the wedding room in the past few months. I have learned about the prices of refrigerators, washing machines, and dryers.

  Many people are a little unaccustomed to the price increase of home appliances.

Ms. Sun, a Shanghai resident, recalled that in the late 1990s, her parents bought a 21-inch color TV for more than 4,000 yuan. In 2005, it only cost less than 3,000 yuan for a 29-inch color TV. She moved to a new house in 2009. When I bought a 42-inch LCD TV, it cost nearly 7,000 yuan. Two years later, I bought a color TV of the same brand and the same specification, and found that it had dropped to 4,000 yuan.

"It feels that the home appliance industry is extremely competitive, and it seems to have been cutting prices. How did it rise this time?"

  In fact, since the second half of last year, the home appliance industry has begun a new round of price increases.

According to the monitoring data of Aowei Cloud Network, in December 2020, in the online market, the average price of color TV sets was 2,569 yuan, a year-on-year increase of 27%; the average price of washing machines increased by 10.2% year-on-year; the average price of the air-conditioning industry was 2,947 yuan, a year-on-year increase of 19.3%.

In the offline market, the average price of color TV was 4,717 yuan, a year-on-year increase of 21.5%; the average price of the washing machine industry was driven by the structural growth of drums, an increase of 8.2% year-on-year; the average price of the air-conditioning industry was 3,837 yuan, a year-on-year increase of 9%.

  Since the beginning of this year, many home appliance manufacturers have successively issued price adjustment notices.

On January 12, TCL Home Appliances (Hefei) Co., Ltd. issued a "TCL White Electronics to All Distributor Friends", stating that the company plans to adjust the prices of refrigerators, washing machines, and freezers starting on January 15. The price increase is 5%-15%.

More than a month later, Midea issued the "Midea Refrigerator Price Increase Notification Letter" and mentioned that due to the continuous increase in raw materials, it decided to increase the price system of Midea refrigerator products by 10%-15% from March 1st.

In addition, Gree, Hisense and other brands have also raised the prices of some products.

  According to a salesperson at an electrical appliance store in Beijing, the prices of major appliances are generally increasing, with the largest increase in air conditioners, followed by washing machines and refrigerators.

"Every time you go up one or two hundred yuan, it is not too much for a single call, but the price has been adjusted more than once in the past six months, and the frequency of price increases has been slightly higher."

The price of raw materials has risen, and the products have been updated.

  Why are home appliances rising in price?

One or two can be glimpsed in a price adjustment notice letter from Haier water heaters.

Haier said that the price adjustment is based on four factors: product quality upgrades, service quality upgrades, increased operating costs such as manpower, logistics, and after-sales services have led to increased corporate costs, and the industry's bulk raw material prices have risen sharply.

  According to industry insiders, the price of home appliances is generally adjusted, and the rise in raw material prices is the main reason.

According to data from the National Bureau of Statistics, in late May last year, the price of electrolytic copper in non-ferrous metals was 4,4097.2 yuan/ton; in mid-January this year, the price of electrolytic copper rose to 5,8931.3 yuan/ton; by the end of May this year, the price of electrolytic copper had reached 72253.1 yuan/ton.

  "For the home appliance manufacturing industry, especially for large home appliances, the cost of raw materials can account for more than 70%. The home appliance industry has a large demand for copper, aluminum, steel, plastics and other bulk raw materials, and the rise in the price of core raw materials will inevitably bring cost pressures. Under this circumstance, the price fluctuation of some home appliances is also a normal phenomenon of market operation.” said Xu Dongsheng, vice chairman of the China Household Electrical Appliances Association.

  Prior to this, the price of home appliance parts has been adjusted.

In December last year, many compressor companies such as Highly issued price increase notices, mainly due to the substantial increase in the prices of bulk raw materials such as copper, aluminum, steel, and iron.

The compressor is an essential part of home appliances such as refrigerators.

The price of compressors has risen, which has led to an increase in the production costs of home appliances.

  The rising costs of logistics and labor have also put considerable pressure on home appliance companies.

Liu Xiangdong, deputy director of the Economic Research Department of the China International Economic Exchange Center, said in an interview with this reporter that due to the impact of epidemic prevention and control and the rising cost of upstream raw materials, transportation and logistics, labor costs, etc. have shown an upward trend, which indirectly pushed up home appliances to a certain extent. price.

  Technology upgrading is another major factor driving the price increase of home appliances.

A salesperson of Bosch Electric told reporters that the upgrading of home appliances is very fast, and every update will have some technological progress, the use of sense and function will be upgraded, and the price will also increase. This is a normal phenomenon.

  "In recent years, as green and low-carbon life has taken root in the hearts of the people, consumer demand for products such as energy saving and carbon reduction has increased. To achieve green intelligence, etc., product function upgrades need to be promoted, which usually increases the cost of home appliances, which in turn pushes up prices. ." Liu Xiangdong said.

 The home appliance industry is developing towards high-end and intelligent

  What do consumers think about the price increase of home appliances?

  Xiao Liu said that home appliances are just in demand, as long as the increase is not particularly large, you still have to buy it.

"Buyers have to call according to the progress of the renovation. For example, our cabinets are customized, and the size of kitchen appliances must match the cabinets. The designer will give suggestions on the size and style. Buy early or buy late, both It may be the wrong size. And we can’t predict the rise and fall of the price of home appliances. We can only buy it at what price it is at the moment.”

  According to data from Aowei Cloud Network, in the first quarter of 2021, the overall situation of China's home appliance market is good, with multiple categories achieving the same increase in volume and price.

However, the sales of color TVs have declined significantly, with a total of 9.9 million units sold, a decrease of 0.6% from the same period last year and a decrease of 20.5% from the same period in 2019.

According to the analysis of Aowei Cloud Network, the average price of the color TV market has risen for seven consecutive months, making consumers more hesitant when buying, and the number of people holding money on the sidelines has also doubled.

  Liu Xiangdong believes that the price increase of home appliances has put a certain amount of pressure on consumers, which may cause the demand for some products to decline to varying degrees.

However, comprehensive consideration shows that after years of full competition in the home appliance industry, there is little price moisture and little price elasticity.

Taking into account the high durability of the major appliances with this round of price increases, consumers will gradually accept the price increase as long as the price increase is not too outrageous.

From the perspective of market demand, the substitutability of major appliances is not high, and the appropriate price adjustment of home appliances will not cause a sudden drop in demand. It is expected that the demand for some home appliances will remain relatively stable.

  From an industry perspective, consumption upgrades and high-end product structure are one of the factors contributing to this round of price increases, and they also represent a long-term trend.

  A salesperson of Matsushita Electric told reporters that the price of their new series of products is indeed not low, but the functions have also been increased a lot.

"We will give consumers a good talk about the new features of the product. Although the price of this series of products is high, but it has more functions, and the price is very high! Good products are a little more expensive, and consumers can still accept it. "It is understood that in recent years, home appliance companies are actively pursuing transformation and upgrading. On the one hand, they are transforming from low prices and large-scale to high-quality, adapting to the general trend of consumption upgrading, and on the other hand, reducing production costs and stabilizing prices through intelligent manufacturing and other means.

  "The upgrading of household consumption is accelerating, and the demand for home appliances is also personalized and diversified, and the pursuit of quality, brand and intelligence is more pursued. The home appliance industry should adapt to this change, improve quality, accelerate the digital and green development of home appliances, and adapt to The need for intelligent upgrading of home life and energy saving and emission reduction in the new era." Liu Xiangdong said.

  Will the price of home appliances rise further?

Industry insiders analyzed that price adjustments can improve production and operation profits for the entire industry and reduce the pressure caused by rising upstream raw materials.

In the medium and long term, the demand for home appliances will not weaken significantly, and the prices of home appliances will continue to rise. However, compared with the prices of upstream raw materials, downstream home appliance companies are more competitive, and the price trend is expected to flatten out and maintain considerable stability.

  Xu Peiyu