The price of raw materials such as cardboard boxes and stainless steel skyrocketed. Household appliances companies used these materials and processes to reduce costs...

The tide of crazy raw material prices has continued for more than a year now. The market did not end this test against the home appliance industry because of the delay. Not only that, but the raw materials such as carton boxes and stainless steel that have been brewing have soared. The industry began to smoke and mourn in the shadow of this price increase.

Time back to the end of 2016, affected by the severe environmental protection and other impacts, carton materials began to appear short of the phenomenon, the price has also been a phenomenon of skyrocketing, not to drop for the home appliance industry's price surge.

In early 2017, shortly after the first round of price increase, the home appliance industry began to frequently receive price increases for giants such as LeTV, Skyworth, Midea, and Hisense. The "butterfly effect" caused by the creation of pulp companies was highlighted. The second wave of price increases began to stage. In May this year, the raw material market once again spread out the price of stainless steel, an important raw material for home appliance production, and the shortage of cartons. The news of soaring prices led to a new wave of price increases in the home appliance industry.

At this point, under the trend of rising prices, the home appliance industry practitioners who have long been grumpy have to start actively seeking countermeasures, and cost savings to ensure the normal capital chain, no doubt has become the decision whether the company can continue to stay in the market today The important cornerstone.

Reduced cost killer

According to sources inside the industry, New Material Online® revealed that the surge in price started to this day. In just one year, the input cost of the whole appliance industry has increased by about 10% to 20%. In this market situation, although home appliance companies have already made corresponding price increases for the end consumer market, in order to protect the competitiveness of the company in the long-term development of the market, most of the cost pressures of the entire production unit are internal to the company itself. Undertake digestion, which also prompted home appliance companies to continue to optimize themselves and adopt various cost-reduction strategies to cope with the rising market prices.

According to the New Materials Online® multi-party understanding, it has been found that home appliances companies are generally focused on the introduction or development of alternative processes in response to price increases.

"At present, Meiling's cost-reduction plan focuses on the four aspects of the traditional carton conversion transparent packaging, spray-free coating, ABS conversion of injection molded parts PP, and thinning of steel plate thickness." Hefei Meiling Co., Ltd. (hereinafter referred to as "Meiling") materials Engineer Cai Xunru told New Materials Online®. He said cartons have been one of the most costly materials for home appliance companies. Due to the scarcity of current carton materials and the precipitous price explosion, Meiling currently considers cartons as one of the entry points for cost reduction and plans to develop transparent packaging materials. To replace the traditional carton. "The material of the transparent packaging material is mainly based on PE material and bubble bags. If this package replaces the development and promotion of the process, then the enterprise can save at least about 25% of the cost in terms of packaging." Zhuhai, home appliance giant Gree Electric Co., Ltd. (hereinafter referred to as "Gree") CMF project manager Zeng Sen also said in an interview with New Materials Online ® that Gree is focusing on developing and introducing cheaper and more efficient alternative processes.

“Gree currently focuses on the introduction and promotion of non-spray-injection molding process, hot stamping instead of plating process promotion, and introduction of alternative metal oxidation sandblasting process in terms of appearance and cost reduction.” Zeng Sen told New Material Online® that Gree is currently The main reason for the promotion of hot stamping instead of electroplating is that Gree found that the hot stamping process has a green and low cost advantage over the electroplating process in the production process, and Gree has successfully obtained cost reduction in the application of this solution. A certain effect.

In addition, according to Zeng Sen, Gree is currently developing a process that uses the exposure and development principle of the photographic industry for metal surface treatment processing to do pattern processing and plans to replace the laser laser engraving process with this process. "If this process succeeds in substitution, then companies will be able to improve their production processing efficiency while achieving cost reduction."

Wan Xiaochun, General Manager of Product Planning Department of Anwei Konka Electrical Appliance Co., Ltd. (hereinafter referred to as “Konka Electric”) told New Materials Online that Konka Electric currently conducts procurement, internal mediation and sales mediation in three areas, of which internal mediation mainly refers to Through cost-optimized methods such as enterprise technology substitution and process replacement, cost reduction can be achieved.

Maximize the cost reduction to ensure the full and reasonable use of the company's capital chain, starting from the source of production to develop their own or from the outside to introduce a practical and cheap alternative process, has become one of the main methods of the current home appliance industry companies.

In addition, according to Zeng Sen, CMF project manager of Gree Electric Co., Ltd., in terms of cost reduction of alternative processes, currently a spraying alternative process being promoted by Huawei can completely replace the originally complicated metal oxide sandblasting with a 30% reduction in cost. Craftsmanship and alternative crafts have become the killer for home appliance companies. "The process being promoted by Huawei is capable of achieving oxidizing and sandblasting quality with a hardness of 6H. If this process is successfully applied to the metal oxide sandblasting process, at least a 30% reduction in cost can be achieved."

The crisis is also an opportunity

Looking at the market, it is easy to find that under the current situation of rising prices, the current home appliance industry has shown a trend of polarization, that is, large enterprises continue to exert force to continue production in an orderly manner, while small and medium-sized enterprises have shown that it is difficult to continue The reduction in production, production or withdrawal. In this regard, some industry insiders told New Material Online that the main factors that led to the emergence of polarization were due to the internal digestion of the company itself and whether the company had sufficient ability to fight a protracted war in the market.

“The actual cost of high-cost enterprises under the tide of price increases is only two-tenths of the price transferred to the market terminal, and most of the rest is basically absorbed by the company itself.” Wan Xiaochun, general manager of Konka's Electrical Product Planning Department, stated that at present, The home appliance industry is still in a period of market turmoil, and the end market's acceptance of product price increases is still in the process of digestion. To avoid prematurely dumping burdens on end-market enterprises, only self-digestion is required.

In fact, due to the pressure of high-cost load, home appliance industry companies basically started one, two or three rounds of price increase this year, hoping to transfer the cost pressure of the company's high load. Although this round of another round of price increase triggered a huge slump in the end consumer market, but according to industry veteran sources, the product price increase phenomenon in the household appliance industry is still only a small part of the company’s cost pressure. . “The cost pressure caused by the price increase has to be solved by the companies themselves. In the prolonged period of this market price explosion, consumption and consumption cannot be the main reasons for the polarization of the household appliance industry.”

Although the price hikes have brought a huge blow to the development of the home appliance industry, many industry veterans have told New Materials Online that everything has a two-sided nature. Even if the price increase does have a huge impact on the household appliance industry, it is rational. From the perspective of view, the pressure caused by the price increase is not another opportunity for the development of the home appliance industry.

"In this market situation, only large and medium-sized enterprises that control advanced technologies such as unique technologies or unique technologies can break through market barriers." Zeng Sen, CMF project manager of Gree Electric Co., Ltd. believes that the surge in prices will squeeze the market. The pressure will inevitably make most SMEs more difficult to sustain, while the opposite of the leading companies will be the original scale advantages and profit margins to further consolidate its leading position, through the survival of the fittest appliance industry development will only be more rational and standardized.

Wan Xiaochun, general manager of Konka's Electrical Product Planning Department, also stated that large companies are more resistant to risks, so in this market tug of war will inevitably lead to the emergence of more centralized results of large companies, and small businesses because of weak resistance to risk so easy There has been a total collapse or temporary exit. Therefore, driven by the rolling of this price increase trend, it is bound to be more powerful in the future more concentrated and standardized development of the home appliance industry.

The fickleness is the norm in the market. Although the trend of rising prices has caused considerable losses in the current home appliance industry, it is too early to describe the industry as a “disaster”. In fact, from an industry point of view, the current price increase will only become one of the highlights of the development history of the home appliance industry, and the arguments that trigger this point are only due to the cost-reduction strategy of the company's main pushers. The rational attitude of the market can be drawn.

In order to further discuss how the household appliance industry needs to reduce raw material prices and how to meet the needs of home appliance product appearance upgrades and intelligence, August 30-31, Seeking Materials® and Lemon Beans will be combined with Changhong, Gree, Haier and Midea. , TCL, Hisense, Konka, Whirlpool (China), Meiling, Bo Xihua, Four Seasons Mu Song, Little Swan, and other major home appliances companies, Hefei Fengda International Hotel held "2017 third China home appliance industry technology and development forum".

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