The fire of rising prices has burned the home appliance industry this time.
According to incomplete statistics by the reporter of Securities Daily, since late February this year, Midea, Haier, TCL, Toshiba, Mitsubishi and other home appliance manufacturers have issued price increase letters one after another. They plan to raise the selling prices of different categories of home appliances to varying degrees before early April.
The price increase range of each household is about 5% to 10%. Midea’s small household appliances have the highest price increase, with an overall price increase of 20%.
raise prices before the peak sales season
According to the time of price increase, Midea, Haier and Hisense plan to start raising prices on March 16. TCL, York air conditioning, Toshiba and Mitsubishi are a little later. On April 1, earlier, and on February 18, Grundfos announced that it will implement new prices for Grundfos products within the sales scope of Grundfos China from March 1.
In April, the home appliance industry will usher in the peak sales season of the year. The reasons for announcing the price rise at this time node are also similar.
Midea said in the price increase notice sent to dealers on March 9 that based on the current changes in competition at the venue and the continuous rise of factory raw materials, resulting in an increase in production costs, it would raise the delivery price of household air conditioning engineering machines by 8%.
Similar to Midea, Haier, TCL, York air conditioner, Toshiba, Mitsubishi, Kelon air conditioner and so on also take the increase in cost as the reason for the price increase.
Fu Yifu, senior researcher of Xingtu Financial Research Institute, said in an interview with the Securities Daily that the main pressure on the recent collective price rise of household appliance enterprises really comes from the cost side. Since last year, the prices of raw materials required for the production of household appliance products have generally increased, such as the prices of non-ferrous metals such as copper, aluminum and nickel, or are at an all-time high, Or breaking new records.
raw material price rise is the main reason
In fact, as Fu Yifu said, when explaining the reasons for the price increase, many home appliance enterprises mentioned the price rise of raw materials such as copper, iron and aluminum.
Taking copper price as an example, according to the data provided by the business agency, since the beginning of last year, the reference price of copper (market) has fluctuated and rose to 7697667 yuan / ton on May 10. After breaking the historical record, it has maintained a high shock trend. So far, the same situation has also occurred in the price trend of nonferrous metals such as aluminum and nickel.
According to Fu Yifu, the rise in raw material prices has led to two factors. On the one hand, the rise in raw material prices has increased the manufacturing costs of home appliance manufacturers; On the other hand, the rise in the price of raw materials will also lead to active hoarding on the demand side, resulting in a shortage of supply, which will lead to a decline in the output of some household electrical appliances. For household electrical appliance enterprises, they have to choose to raise the price.
“Especially in the post epidemic era, the demand side shrinks, and the production and operation of household appliance enterprises are already under pressure. Coupled with the rise in the price of upstream raw materials, household appliance enterprises must raise prices to alleviate profit space in order to survive better. It is also a way of self-help.” Fu Yifu further said that whether home appliance enterprises will continue to raise prices in the future depends on the game between the supply and demand sides of the market. If home appliance enterprises blindly rely on price increases to solve the operating pressure, it is obvious that the demand side will resist. At that time, the profit space obtained by price increases is likely to be swallowed back through the decline of sales.
high end transformation becomes a trend
Of course, facing high costs and shrinking demand, home appliance enterprises may not have only one way to go.
Huaan Securities Co.Ltd(600909) home appliance industry analysts believe that from the perspective of supply chain optimization, there is enough room for the home appliance industry to reduce costs, which needs to be explored.
According to the analyst, there are three steps in the supply chain of home appliance enterprises to reduce costs. Negotiation price reduction, process optimization and design optimization. Combined with the profit performance of home appliance enterprises in the same period last year, there is still room for large cost reduction in the design optimization stage of the three steps.
Liang Zhenpeng, chief consultant of Zhifan coast marketing planning agency, agreed, In an interview with Securities Daily, he said: “Generally speaking, home appliance enterprises will not pass on 100% of the pressure of raw material price rise to consumers, and may pass on 50% to 60%. In addition, many home appliance enterprises are transforming high-end products to improve their brands and products. They can have more brand premium ability and absorb part of the pressure brought by rising costs.”
In addition, when sorting out the price increase notices of various home appliance companies, the reporter of Securities Daily noted that Midea raised the prices of many of its products to different degrees. Among them, the highest proportion of price increase was small home appliances, with a price increase range of 20%, far exceeding the price increase range of other enterprises by 5% to 10%.
In this regard, Liang Zhenpeng believes that small household appliance products are easier to drive household appliance enterprises to integrate various emerging functions, such as energy conservation, environmental protection, artificial intelligence, Internet of things, etc., but at the same time, more chips are needed. In addition, since last year, the chip market has been in short supply, resulting in high prices, and the price rise of small household appliances will be higher.
“Generally speaking, the rise in the sales price of household appliances in the future is the general trend, and it is expected that the price rise will continue throughout the year, because in the current economic environment, the rise in raw materials will continue.” Liang Zhenpeng said.
