Home appliance industry trapped in inventory difficulties

Recently, a research report shows that since 2010, the growth rate of retail sales of home appliances such as washing machines and refrigerators has been declining. In particular, compared with 2012, sales of many home appliance companies have declined. The high inventory problem has seriously hampered the development of enterprises. How to solve the problem of high inventory of household appliances has become a major problem at present.

In the third quarter, the total inventory reached 43.7 billion yuan. The survey agency analyzed the financial statements of 43 companies listed in the third quarter of this year, and found that nearly half of the company's performance has increased, but inventory growth has remained high while the company's performance has increased. Data shows that as of the end of the third quarter, the total inventory was as high as 43.734 billion yuan, while in the previous half-yearly report, this figure was 41.512 billion yuan, which was in turn an increase.

Since the beginning of this year, there has been no fundamental improvement in the home appliance industry. Only the color TV industry has seen a slight increase, and the overall home appliance market capacity has shrunk. In the first half of the year, the overall sales volume of the domestic refrigerator industry fell by 12% year-on-year, and sales decreased by 7% year-on-year; both washing machine sales and sales were negative growth; and air-conditioning sales fell by more than 20% year-on-year. In response, the government launched a project to save energy and benefit people in June this year in hopes of promoting market consumption.

In the interview with the reporter, Xiong Xiaokun, a light industry researcher of China Investment Advisors Co., Ltd., said that the household appliance market is highly competitive and the overall output is relatively high, which has led to high inventory levels. This is the “heart disease” of home appliance companies. If it can't be solved well, then it will make it impossible for home appliance companies to concentrate on industrial upgrading, which will be detrimental to the long-term development of the home appliance industry.

Policy factors advance overdrafts The industry has voiced that today's high inventory conditions are largely due to a series of stimulative policies. The stimulus policy has achieved great results in a short period of time. While the sales performance and growth rate have hit record highs, it also left the market dark and advanced overdraft the market. Not long ago, in the discussion on whether the new home appliances policy was continued, many companies and experts proposed to stop the policy.

Appliance analyst Liang Zhenpeng said that in recent years there have been two major drawbacks, including “home appliances going to the countryside” and “replacement of old”. The first is to overdraw the home appliance market in the third- and fourth-tier cities and rural areas in advance. For home appliances, their service life is usually long, which leads to weak market demand. In addition, the policy has spawned a large number of local enterprises. These enterprises often blindly expand their products to enter the market and abandon the R&D of products, which is detrimental to the upgrading of the entire industry.

In addition, the high inventory of home appliances is inseparable from the national economic situation. Xiong Xiaokun said that the high inventory of home appliances is affected by the economic capacity of consumers. At present, China’s national income level has not been significantly improved, and consumer purchasing power is still at a low level. According to Chen Liming, Editor-in-Chief of Home Appliances World Net, real estate market control is also a major cause. The sales of home appliances largely depend on the construction of new houses. In recent years, the state has not relaxed its control over real estate, which has caused the market demand to not rise significantly.

The entire industry is in desperate need to break through the difficulties for the high inventory of the household appliance industry. Experts said that high inventory is harmful to the company. The high inventory of enterprises, not only the funds can not be timely returned to operation, but also dragged down other strategic deployment. In addition, the longer the home appliance product is shelved, the greater its depreciation will be. This is an issue that needs to be solved urgently.

"The fourth quarter inventory problem will get some relief, but the total inventory will still exceed previous years." Liang Zhenpeng expects that due to the impact of energy-saving projects, there will be a large number of finalists in the fourth quarter sales, in addition to the final quarter of the product will be cleared . IResearch analysts also said: "In the fourth quarter, there will be some acceleration in destocking, but it will be very difficult to digest such inventory in this year."

For such industry-wide problems, it will take a long time to completely solve them. Xiong Xiaokun believes that companies should take the form of discount promotions to increase sales. In addition, we can broaden sales channels and actively develop online businesses. With the development of online shopping, the online market is becoming more and more spacious. At the same time when conducting online business, it is necessary to avoid homogenous competition both online and offline.

Liang Zhenpeng expressed his recognition that enterprises could quickly sink the market and accelerate sales in the rural market. For those older models with qualified products, they should adopt price cut sales. Although it may reduce some profits, it can return enterprise funds and it is beneficial to the long-term development of the company. In addition, exports can also be increased to stop bleeding in the more backward countries such as Southeast Asia and Africa.