Is demand for white goods in China waning?

Sales for traditional home appliances are expected to remain flat for the next five years.

Analysts have observed that demand for white good appliances, including washing machines and refrigerators, in China may have already hit its peak, according to an article on the South China Morning Post.

Evidences point to a weak relationship between housing sales volume, which has increased over the years, and demand for home appliances, which is currently seeing flat to negative increase. The slow is attributed to a period of economic prosperity in the country that has enabled many families to secure a middle- to high-class lifestyle, equipped with sufficient home appliances.

Despite affluence, many consumers are not willing to spend on large appliances and upgraded versions unless their current units absolutely need to be replaced, says IHS Markit Technology analyst Horse Liu. Thus, in order to maintain sales, manufacturers are urged to invest in innovation, and offer units at higher prices.

As a result, demand for such products is expected to remain flat for the next five years, considering the long replacement cycles for these traditional appliances. "The replacement cycle for air conditioners is around eight to 10 years, while it is 10 to 15 years for televisions and washing machines," Liu says.

On the other hand, air conditioners, despite also having similar replacement cycles, will see a growth in sales. This is due to the fact that China's air conditioner models are mostly wall- and window-mounted, covering a limited space inside the home. With consumers gaining higher disposable incomes and wider residential spaces, it becomes practical to purchase and install multiple units.