Industry overview
China is home to about 2,000 makers of electric irons. Small and midsize companies dominate, shipping mostly low-end and midrange models. Private enterprises represent an estimated 90 percent of the manufacturing base. The rest are joint ventures and foreign-invested companies. The majority of suppliers concentrate on electric irons, and allot a portion of their capacity to other appliance types such as shavers, hair dryers and vacuum cleaners. Small makers usually have three to five specialists who coordinate with overseas customers to develop new products. QC is done according to clients’ requirements. Midsize companies employ about 10 R&D technicians. While some create models in-house, OEM orders still dominate. A portion of output goes under proprietary brands. There are typically between 30 and 50 designers at large enterprises, some with five to 10 years of experience. The factories have separate workshops for processes such as plastic injection, spraying and painting, die-casting, molding and component assembly. To ensure quality, makers may purchase stainless steel in Japan and Taiwan, and other materials in North America. QC teams perform random inspections during different stages of production and examine all finished units before shipment. They can also test individual parts and components, performance and packaging. Some established companies boast Intertek-approved laboratories certified for TMP or Testing at Manufacturer’s Premises. The majority of small suppliers are assembly-oriented, with some making housings in their own factories but procuring components from local specialists. Midsize and large enterprises usually perform molding, plastic injection, spraying, silk-screening, die-casting, assembly and packaging in-house. Zhejiang province is the major sourcing center for electric irons, accounting for about 70 percent of China’s total shipments. Cixi is the primary production base, with an estimated one-third of the country’s outbound shipments in the line from this city. Guangdong province is the other significant hub. Companies in both areas offer products at all price ranges. According to customs statistics, China exported 93 million electric irons from January to November 2008, an increase of only 0.73 percent year on year. From January to March 2009, overseas shipments shrank by at least 20 percent YoY, prompting makers to lower their prices by 5 to 10 percent to stimulate demand. Currently the industry is seeing signs of recovery. At many suppliers, export volume grew by 10 to 20 percent in the past three months. Nevertheless, most companies do not plan to increase capital expenditure. The US and the EU are expected to remain the major overseas markets.
|