Sep 21, 2020|
JD White Paper: Consumers Have New Priorities for Home Appliance Purchases
by Ella Kidron
Consumers in China are considering new priorities when making home appliance purchases, as reflected in a new industry white paper by JD.com. The white paper, JD.com 2020 Refrigerator and Washing Machine White Paper, was released on September 16th at an industry event hosted by the retail giant.
In the past, consumers tended to only replace home appliances when they were broken and therefore no longer usable. JD data, however, indicates that this behavior has changed in the continued pursuit for an upgraded lifestyle and now the number of reasons for replacing a home appliance have become more diversified. JD data indicates that 47% of users who replaced their washing machine opted to change because they either wanted to upgrade or were not satisfied with the available functions.
This upgrade is apparent in the premium pricing of home appliances. Sales of refrigerators priced at RMB 4,800 yuan and up increased 110% YOY, while sales of washing machines priced at RMB 4,000 yuan and up increased 50%. New products were a major leader of category growth, with new fridges, washing machines and dryers increasing 141%, 174% and 486% respectively, and accounting for 44%, 46% and 88% of total sales respectively.
The role of data in the development of home appliances is also increasingly prominent. On the one hand, data helps show that post-epidemic consumers are paying more attention to smart, health conscious appliances and consider quality as tantamount. This is particularly true in the fridge category, where products with anti-bacterial and anti-odor qualities have received positive reviews from consumers.
Consumer-to-Manufacturer (C2M) where data is used to create products that will better meet market demand is also a trend in the home appliances space that looks as if it’s here to stay. In the first half of 2020, the number of JD Home Appliance C2M products with partners had already reached 2,046, and the contribution of C2M products accounted for 10% of JD’s retail sales in the first half of the year. JD and LG alone have developed seven C2M refrigerators and washing machines in just two months. All products were designed based on customers’ preferences, revealed through data analysis, and consideration of the latest trends in the home appliances industry.
According to the 2020 H1 China Home Appliance Market Report released by China Center for Information Industry Development (CCID Group), online sales account for 51.84% of China’s home appliance market. Even though the industry saw a dip in Q1 partially due to lockdowns making delivery and installation highly inconvenient, the second quarter saw a boom, particularly online which grew 44.8% YOY, and there are clear signs of continued recovery in the second half of the year. JD’s white paper also reflects this reality.