Small Kitchen Appliances
China's small kitchen appliance industry is booming. However, rising raw material and labor costs are prompting many suppliers to consider raising prices.
What are producers doing to offset higher costs? Which suppliers are planning price increases and which are planning to hold the line? You'll find the answers in this report.
Get profiles of China's major manufacturers (including Galanz, which manufactures 40% of the world's microwave ovens), and use them to evaluate new opportunities.
Plus, you'll receive a comprehensive industry overview that looks at the production, QC and R&D trends that will impact your future sourcing decisions.
What you'll get
 Deep profiles of 20 major small kitchen appliance makers that provide detailed information on product-development initiatives, production capabilities and future plans. Based on factory tours and personal interviews with senior managers, these profiles are available nowhere else
Profile tables of an additional 73 suppliers featuring key information such as product lines, annual sales and main export markets
Information on the comparative advantages of sourcing from Ningbo (Zhejiang) and Shunde (Guangdong), China's two main production hubs
Full-color pictures and complete product specifications for 57 top-selling export models
How you'll benefit Find out why almost 90% of major suppliers plan to expand their capacity in the next 12 months
Know what steps manufacturers are taking to improve product quality and which producers best meet your quality requirements
Save time and money by shortlisting suppliers to visit before your next sourcing trip to China
Get information on producers' company backgrounds, output capacities, export experience and more — plus full contact details
Executive summary The small kitchen appliance industry in China is growing by leaps and bounds. Production and exports increased by almost 30 percent y-o-y in 2003. Strong demand for kitchen appliances from the domestic China market and developing countries in Asia has spurred capacity expansions.
Products available from China range from US$2 electric kettles to high-end US$80 rice cookers with LCDs and fuzzy logic systems. While the majority of makers focus on the low and midrange products, many are steering towards the high end to distinguish themselves from the rest.
Grappling with rising raw material costs, quite a few suppliers have raised prices, while others have scheduled price increases in coming months. Most, however, have adopted a wait and see policy and are holding prices steady. This trend is also reflected in the Global Sources China Market Intelligence Supplier Survey featured in this report. Fifty five percent of the suppliers who responded to the survey will keep prices unchanged in the next 12 months, while 41 percent expect prices to increase anywhere between 3 and 20 percent. Only 4 percent plan to decrease prices.
The two main production hubs in China are Ningbo (Zhejiang province) and Shunde (Guangdong province). While Shunde — the largest home appliance base in China — gains strength from its well-established parts and components supply chain, Ningbo — the plastic capital of China — leans on the solid foundation of its large plastics industry.
Exports of small kitchen appliances are dominated by a handful of large companies that have been in the industry for the past two to three decades. The industry also comprises numerous small and midsize entrepreneurs that started out as OEM producers for the big suppliers, but have gained valuable production experience over the years and are now exporting on their own.
Suppliers are supported by a strong parts and components sector comprising 2,000 to 3,000 makers spread across all parts of the country, but concentrated in Ningbo and Shunde.
Industry overview
Despite rising costs of raw materials, primarily steel and plastic, China's small kitchen appliance industry is booming. Exports in the sector grew by almost 30 percent in value from US$2.8 billion in 2002 to US$3.7 billion in 2003. The growth rate in terms of volume was also at the same level, from 357 million to 458 million units. Export and production forecasts for the current year are positive with the 30 percent growth rate expected to continue.
The small kitchen appliance product range offered by China makers is varied: from US$2 plastic kettles to US$80 high-end rice cookers with LCDs and microcomputer-controlled fuzzy logic systems, to the newest in microwave cooking &$8212 lightwave ovens. The first of these was developed in China. Production and exports are however dominated by low- and midrange appliances in the export price band of US$4 to US$20 (excluding microwave ovens, which average at US$30 to US$35).
The range of products offered by China makers can be classified into six broad categories, which are also the scope of this report: microwave ovens; electric kettles and coffee makers; motor-driven products such as food processors, blenders and juicers; convection appliances such as ovens, roasters and grillers; rice and slow cookers; and slice and oven toasters.
On average, most makers are able to offer an entire range of appliances, although almost all prefer to manufacture a particular group of products in-house and subcontract the rest.
Industry composition
The small kitchen appliance industry in China comprises four main types of companies. There are large suppliers (which number about 40) that often have a handful of subsidiaries manufacturing a range of appliances, with production capacities in the millions. Galanz, Midea, Modern and X.J. Group are some examples.
Second are the midsize companies (about 200) that offer a smaller range of appliances, but are fast developing their R&D capabilities while at the same time expanding their production capacities. Eastron and Balsa are two of these.
Third are the small-size companies (about 300) that export only one or two appliances and have low production capacities.
Fourth are the hundreds of non-exporters that carry out OEM work for exporting suppliers. Supporting this supplier base are 2,000 to 3,000 parts and component makers.
Samples of supplier profile Banshen Electrical Appliance Co. Ltd
Changshu Banshen Electrical Appliance Co. Ltd specializes in air conditioners, refrigerators and freezers. In August 2003, the company expanded its range to icemakers, selling US$483,000 worth by the end of the year. The icemakers are priced at US$100 to US$800 depending on capacity and design. Around half of output is shipped to wholesalers in Dubai and Russia. All exports carry buyers' labels, while products for the domestic market are sold under its in-house brand, Banshen.
Product development
Banshen has three R&D teams each assigned for icemakers and refrigerators, freezers and air conditioners.
The R&D team that specializes in icemakers and refrigerators consists of eight members, three of whom focus on structure and aesthetics, two on electrical system, two on the refrigeration system, and one overall manager.
Designing is computer-aided using UG and other software. It usually takes 75 to 90 days to develop a new product, including 45 days for tooling.
The company's IM and IMS series of icemakers can make finger-shaped ice and ice slush, respectively. The IM series is available in ice-making capacities of 25kg to 100kg per 24 hours, while the IMS series can produce 40kg to 200kg of ice per 24 hours. Both are housed in stainless steel. A smaller version, the IM-15, has a capacity of 15kg per 24 hours, and comes in a plastic housing.
Banshen sources stainless steel from Shanghai Baosteel Group Corp.
Electric motors are sourced from Wuxi Dexin Miniature and Special Motor Co. Ltd, blower fans from Jingjiang City in Jiangsu, isocyanate (foaming material) from the ICI Group (Japan), and plastics from local and Taiwan or South Korea suppliers.
Production capability
Banshen has a total facility area of 200,000 square meters, with respective factories for freezers, icemakers, refrigerators, air conditioners and water heaters.
The freezer and icemaker factories are located with the headquarters in the company's 125,000-square-meterfacility in Changshu city.
The 3,000-square-meter icemaker workshop has one assembly line and three QC lines.
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Global Sources Industry-specific China Sourcing Reports All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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