Feb 18, 2020 (China Knowledge) - Last week, China’s home appliance sector ranked 13th among 28 industries in the equity market in terms of price performance, overage prices of such stocks were up 2.20%; with 38 home appliance companies’ shares rose, while 19 fell. This possibly depicts that demand for home appliances increase could be derived from the government’s compulsory quarantine to minimize human interaction to curb the spread of coronavirus; hence, people are spending time using home appliances, appreciation of such products lead to more purchases in the immediate or near term.
Although the epidemic has affected the supply side due to the shutting down of factories or production at a lower capacity, it has a limited impact on the demand side, only causing a delay in demand. Completion of construction projects later month could also cause a spillover effective for the strong demand for home appliances to fit in the new homes.
2020 is ushering a massive replacement of old appliances and more than 150 mln pieces of these will reach repair guarantee expiry date; therefore, the market is likely to see large scale purchases.
Compulsory home-quarantine is likely to boost the demand for home appliances; it has increased Chinese consumers’ frequency and time-spent on making home meals, working, learning, and entertainment at home.
In terms of such activities, we see preparing coffee, tea, fruit juice, and other drink-related products that could spur demand for a hand-held mixing cup, coffee machine, and a high-speed blender. Home-quarantine also triggered a pervasive fever for cooking, boosting demand for kitchen appliances; especially, multi-functional rice cookers, induction cookers, stove hoods, and baking oven.
Moreover, health-improvement products attracted consumers’ focus. Demand for air-conditioner, air purifier, and ultraviolet disinfection lamps will take off.
Though the demand for these home appliances is likely to receive unprecedented quantity orders, we do not rule out the spending from China’s households to match those highly-demand masks – at least, by spending not quantity.
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