Competing for the last profit of the home appliance industry The two small home appliance purchases that took place within a week seemed to be unexpected, but it was reasonable. On July 11, Philips officially announced the acquisition of Pentium Electronics, which is expected to be completed in the fourth quarter of this year, with a transaction volume of approximately 2.5 billion. Coincidentally, one day later, Aishida signed an agreement with BBK to pay RMB 22.88 million for the acquisition of the latter’s small home appliances business.
The industry expects that the annual CAGR of domestic small household appliance market will be 13.5% in 2010-2013. By 2020, the domestic potential market revenue will reach 176 billion yuan, and the growth rate of the small household appliances industry will exceed the growth of the overall household appliance industry. In the face of “the last profit-making cheese in the Chinese home appliance industryâ€, a large number of companies competed and the mergers and acquisitions cases continued to be staged.
Luo Qingqi, a senior director of Pare Consultancy Co., Ltd., said that small household appliances have entered the mid to late stage of full competition. The market share has been dominated by major companies, and the oligopolistic situation will gradually develop. The space for pure small household appliances will become smaller and smaller.
Small appliance industry intensified competition
On July 11, Philips officially announced the acquisition of Pentium Electronics, which is expected to be completed in the fourth quarter of this year, with a transaction volume of approximately 2.5 billion. This is the second case of cross-border mergers and acquisitions initiated in the domestic small home appliances industry following the acquisition of Supor by the French small appliance giant Cyber ​​Group in February this year.
Kong Xianghui, chairman and executive vice president of Philips Greater China, said that through the acquisition of Pentium, it will vigorously expand Philips' product line in China. According to industry analysts, Pentium can make up for Philips' lack of life in small household appliances. Pentium's mature marketing system in the third- and fourth-tier markets can also help Philips in the first-tier and second-tier markets to enter the third- and fourth-tier markets.
Not coincidentally, that is, after Philips announced the acquisition of Pentium one day, Ashida signed a "Agreement on Asset Acquisition and Transfer" with BBK Household Appliances. ASD acquired the related assets of the Dongguan Small Business Appliance Co., Ltd. for RMB 22.88 million.
As early as this year in March this year, BBK announced the withdrawal of small household appliances business, ASD has been ready to take over. Aishida executives have publicly stated that “entering small household appliances is a pressure on the profit of listed companies†and hopes to acquire “the income and profit brought by small household appliances in the future will be comparable to that of cooking utensilsâ€.
The oligopoly is gradually forming
In recent years, there have been many cases of mergers and acquisitions in the domestic appliance industry, such as the acquisition of Supor by France’s Saibo Group and the purchase of small household electrical appliance businesses by Aishida. Why do small home appliance industry mergers and acquisitions occur frequently?
Luo Qingqi pointed out that small household appliances have entered the mid to late stage of a period of full competition, market share has been occupied by major companies, small-share companies have gradually withdrawn, and acquisitions and mergers have begun to become frequent.
The acquisition will take place in two phases. The first phase will be the acquisition within the industry, which means the acquisition of small appliances by small household appliances; the second phase will be the cross-industry acquisition, that is, the home appliance purchases small household appliances.
Relative to color TVs, air conditioners, refrigerators, washing machines and other major appliances, small household appliances industry, the technology and funding threshold is low, making many manufacturers rush, foreign investment, the competition is fierce. Price wars, promotional wars, advertising wars, and channel wars are on the rise and the market tends to be saturated. At the same time, problems such as the passing rate, performance stability, and electrical safety of small household electrical appliances that have not been properly solved have become more and more serious. Together with the intensification of homogenization competition, the average household appliance industry in China has become even Profits are getting lower and lower.
In spite of this, the profit rate of small household appliances is still higher than large appliances, which is also an important reason for attracting capital. The analysis predicts that the average annual compound growth rate of domestic small home appliance market will be 13.5% in 2010-2013. By 2020, the domestic potential market revenue will reach 176 billion yuan. Driven by government stimulus policies and the development of real estate and affordable housing, the growth rate of the small household appliance industry will exceed the growth of the overall home appliance industry.
According to industry insiders, after a small-scale home appliance market is acquired and integrated in a round of brands, the oligarchic situation will gradually develop, and the space for pure small household appliances will become smaller and smaller.
The industry expects that the annual CAGR of domestic small household appliance market will be 13.5% in 2010-2013. By 2020, the domestic potential market revenue will reach 176 billion yuan, and the growth rate of the small household appliances industry will exceed the growth of the overall household appliance industry. In the face of “the last profit-making cheese in the Chinese home appliance industryâ€, a large number of companies competed and the mergers and acquisitions cases continued to be staged.
Luo Qingqi, a senior director of Pare Consultancy Co., Ltd., said that small household appliances have entered the mid to late stage of full competition. The market share has been dominated by major companies, and the oligopolistic situation will gradually develop. The space for pure small household appliances will become smaller and smaller.
Small appliance industry intensified competition
On July 11, Philips officially announced the acquisition of Pentium Electronics, which is expected to be completed in the fourth quarter of this year, with a transaction volume of approximately 2.5 billion. This is the second case of cross-border mergers and acquisitions initiated in the domestic small home appliances industry following the acquisition of Supor by the French small appliance giant Cyber ​​Group in February this year.
Kong Xianghui, chairman and executive vice president of Philips Greater China, said that through the acquisition of Pentium, it will vigorously expand Philips' product line in China. According to industry analysts, Pentium can make up for Philips' lack of life in small household appliances. Pentium's mature marketing system in the third- and fourth-tier markets can also help Philips in the first-tier and second-tier markets to enter the third- and fourth-tier markets.
Not coincidentally, that is, after Philips announced the acquisition of Pentium one day, Ashida signed a "Agreement on Asset Acquisition and Transfer" with BBK Household Appliances. ASD acquired the related assets of the Dongguan Small Business Appliance Co., Ltd. for RMB 22.88 million.
As early as this year in March this year, BBK announced the withdrawal of small household appliances business, ASD has been ready to take over. Aishida executives have publicly stated that “entering small household appliances is a pressure on the profit of listed companies†and hopes to acquire “the income and profit brought by small household appliances in the future will be comparable to that of cooking utensilsâ€.
The oligopoly is gradually forming
In recent years, there have been many cases of mergers and acquisitions in the domestic appliance industry, such as the acquisition of Supor by France’s Saibo Group and the purchase of small household electrical appliance businesses by Aishida. Why do small home appliance industry mergers and acquisitions occur frequently?
Luo Qingqi pointed out that small household appliances have entered the mid to late stage of a period of full competition, market share has been occupied by major companies, small-share companies have gradually withdrawn, and acquisitions and mergers have begun to become frequent.
The acquisition will take place in two phases. The first phase will be the acquisition within the industry, which means the acquisition of small appliances by small household appliances; the second phase will be the cross-industry acquisition, that is, the home appliance purchases small household appliances.
Relative to color TVs, air conditioners, refrigerators, washing machines and other major appliances, small household appliances industry, the technology and funding threshold is low, making many manufacturers rush, foreign investment, the competition is fierce. Price wars, promotional wars, advertising wars, and channel wars are on the rise and the market tends to be saturated. At the same time, problems such as the passing rate, performance stability, and electrical safety of small household electrical appliances that have not been properly solved have become more and more serious. Together with the intensification of homogenization competition, the average household appliance industry in China has become even Profits are getting lower and lower.
In spite of this, the profit rate of small household appliances is still higher than large appliances, which is also an important reason for attracting capital. The analysis predicts that the average annual compound growth rate of domestic small home appliance market will be 13.5% in 2010-2013. By 2020, the domestic potential market revenue will reach 176 billion yuan. Driven by government stimulus policies and the development of real estate and affordable housing, the growth rate of the small household appliance industry will exceed the growth of the overall home appliance industry.
According to industry insiders, after a small-scale home appliance market is acquired and integrated in a round of brands, the oligarchic situation will gradually develop, and the space for pure small household appliances will become smaller and smaller.
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