After a period of relative price stability, mounting production costs and renewed R&D investment are driving the majority of China’s small kitchen appliance suppliers to raise prices through 2008. Improvements in products across all categories from microwave ovens to electric kettles, however, are obvious: New appliances meet RoHS and WEEE requirements and feature multiple functions, sleek housings and sophisticated components. With profiles of 68 companies, color photos of 169 products and a comprehensive industry overview, this report will answer these questions and more…

Executive Summary:

Price markups are on the agenda of most of China’s small kitchen appliance makers in 2007. Climbing manufacturing costs coupled with more aggressive R&D investments by midsize and large companies make higher quotes inevitable after a year of intense competition that kept prices stable.

China exported 704 million small kitchen appliances worth US$6.7 billion in 2006, a year-on-year increase of 15.5 percent in terms of value and 12 percent in volume. While export figures have been rising continuously since December 2005, growth rate of value decreased by 11 percentage points, while volume dipped by about 1 point.

The slowdown in revenue growth despite a relatively steady shipment volume indicates that price increases were less significant in the past 12 months than they were two years ago. This was a direct result of the suppliers’ efforts to maintain prices in order to stay competitive.

The following are some of the trends we see in China’s small kitchen appliances export industry:
•  Most large and many midsize suppliers will continue to invest in advanced machines and equipment to support RoHS- and WEEE-approved manufacturing, and bolster their output as well. Some even have set up special production and QC lines dedicated to compliant designs.
•  Many small companies with limited financial capability, however, may find it difficult to follow EU regulations. At the most, they use components procured from RoHS qualified parts providers. Those without means to comply focus on export markets other than the EU or shift to other product lines.
•  Despite the WEEE and RoHS directives, the EU will continue to be the favored export destination for many China makers, mainly because buyers from the region are less price conscious, giving suppliers higher profit margins.
•  The primary R&D focus of most companies will be the incorporation of multiple functions in their new and upcoming products. Some of the most recent coffee maker releases, for instance, are designed with slice toasting and grilling capability.

This report focuses on electric kettles, coffee makers, slice toasters, toaster ovens, rice and slow cookers, and food processors, blenders and juicers — products that comprise the bulk of China’s exports.

The Products & Prices section details the newest features and current price ranges of these appliances. It also describes the main materials used to make each type and the significant factors that determine price and differentiate quality.

The Manufacturing section explains the start-to-finish steps companies perform during production, and compares the manufacturing capability of small, midsize and large suppliers. Significant QC procedures conducted are also discussed.

Current product development trends and the typical set-up of a design team in China are discussed in the R&D section.

This report profiles some of the leading small kitchen appliance makers in China, a number of which were also featured in our 2005 report. With annual sales of US$1.2 billion, Guangdong Galanz is the top maker of microwave ovens in China. The company’s annual exports have grown by 18.7 percent to US$780 million since we last profiled the company.

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