First at home, then abroad
The history of the modern Chinese appliance industry dates back to the early 1950s. At that time, the country focused on building a new economy based on socialist values by focusing on establishing state-owned enterprises and manufacturing basic products. When the government introduced liberal market reforms in the 1980s and 1990s, large sections of China’s large population started having the financial means to purchase household appliances. Furthermore, due to the unshackling of the planned economy, formerly state-owned enterprises were able to produce according to market demands.Over four decades, the Chinese appliance industry evolved into a fully developed market with strong domestic players and a variety of products. In the early stages, Chinese companies profited from beneficial government policies, such as tax incentives and subsidies for innovation. In addition, the government ensured that imported products remained expensive so that Chinese companies were shielded from competition until they were strong enough. Today, it has become a market leader with grit and quality, even integrating smart-home technology.
The Chinese appliance vanguard
A handful of companies were able to withstand the turmoil of market reforms and brave the fierce competition for dominance of the Chinese market. Most of today’s leading brands had humble beginnings as a company owned by the state. For instance, Haier was converted into a state-owned company after the establishment of the PRC, and Little Swan, which belongs to the Midea Group, was the country’s first washing machine manufacturer. However, with a strong commitment to innovation, these companies were able to establish a strong market position domestically and abroad.Chinese home appliance manufacturers were very successful in expanding into overseas markets. This was due in part, to their capabilities to manufacture reliable products at a competitive price, as well as their understanding of the market requirements in developing countries. Consequently, these companies not only profited from the rising living standards at home but also from emerging middle classes in many other nations as well. Today, the popularity of Chinese appliances also extends into developed markets. Like Japanese electronics and cars in the second half of the 20th century, Chinese brands undercut established brands by offering high quality at lower prices.
