Analysis of the Operation Situation of China's Household Appliance Industry from January to July 2025 (Outlook)

Since 2025, the international environment has been complex and volatile, and the international economic and trade order has suffered significant damage, with increased instability and uncertainty. To address external challenges, China has placed greater emphasis on expanding and strengthening the domestic cycle, introducing a series of policies to support domestic demand expansion, promote production, and facilitate circulation. Overall, the most prominent feature of economic performance in the first half of the year is "stability." Domestically, although factors such as the downturn in the real estate sector and weak consumer expectations have had a considerable impact on domestic consumption in the home appliance industry, the policy of trading old for new has continued to play a strong role, and the domestic sales market has exhibited characteristics of stability. In terms of exports, despite being impacted by increased uncertainty in U.S. tariff policies, accelerated restructuring of the industrial chain, ongoing geopolitical turmoil, and intensified fluctuations in commodity prices, home appliance exports have still demonstrated remarkable resilience.

Second Half Outlook

In the first half of 2025, amidst increasing impacts of U.S. tariff policies and compounded internal challenges, China's national economic indicators, although growth has slowed, remain stable. The policy of replacing old consumer goods with new ones has been intensified and expanded. The export market is under pressure but remains resilient. According to a survey conducted by the China Household Electrical Appliances Association on its member enterprises (N=62), in the first half of 2025, 43.5% of enterprises maintained revenue growth, and 27.4% maintained profit growth. Combining revenue and profit, 22.6% of enterprises achieved growth in both, with comprehensive enterprises that specialize in three or more home appliance categories performing better. However, enterprises generally have conservative expectations for the second half of the year, believing that the policy of replacing old goods with new ones provides a certain pull for the market, but issues such as insufficient domestic consumption momentum and market demand remain prominent. The global trade situation faces high uncertainty, bringing greater pressure and challenges to the industry's development in the second half of the year. Considering the high base of the domestic retail market in the second half of 2024, supported by policies, the retail sales of China's home appliance market in 2025 may maintain positive growth, although the growth rate is expected to show a trend of high early and low later.

In terms of exports, in the first half of 2025, China's home appliance industry maintained a certain level of resilience in the face of uncertain global tariff policies from the United States. However, entering the second half of the year, the challenges facing exports will become more severe. From the base level perspective, 2024 was a significant year for China's home appliance exports, with double-digit growth in most months except March, April, and September, and October leading with a growth rate of 25.1%. The high base directly brings considerable pressure for further growth in 2025. From the supply and demand environment perspective, with the implementation of a series of trade measures by the United States globally, such as "reciprocal tariffs," 40% transfer tariffs, and 232 steel and aluminum tariffs, factors like accelerated layout of overseas production capacity, slower decline in overseas inflation, previous "rush exports," price recovery, and RMB appreciation against the USD will all have a restraining effect on exports.

It is worth noting that the diversification of China's home appliance export markets, the depreciation of the RMB against multiple currencies, the phased stability of China-US trade negotiations, the low operating prices of commodities, the global competitive advantages of China's home appliance industry in terms of the entire industrial chain and the quality-price ratio of home appliance products, the medium-to-low level of overseas inventory cycles, the continuous development of cross-border e-commerce and overseas warehouses, and the pressure from domestic market competition driving enterprises to accelerate their expansion overseas, will continue to support the resilience of China's home appliance exports in the short to medium term. In the long term, as parallel supply chains develop overseas, Chinese home appliance companies should be more determined in their globalization strategies, deeply integrate into the global industrial chain, strengthen the ability to provide localized services across the entire value chain globally, and enhance China's leading role in the global supply chain of home appliances. Additionally, home appliance enterprises need to continuously shift away from the traditional price competition model of exports, focusing on climbing to the mid-to-high end of the global trade value chain, and creating a more resilient and sustainable new competitive edge for overseas expansion.