In 2006, China household appliance industry was impacted by many adverse factors such as the high prices of energy resources, the rising cost of raw materials, the appreciation of RMB and changed competition pattern caused by the penetration of multinationals into Chinese market, etc. However, there was a slight increase in the profitability of the whole home appliance industry, just only running at low level, which is mainly attributed to the white goods. The cost rise forced some inferior enterprises out of the market, but meanwhile, it promotes industrial concentration to be upgraded and competitiveness of superior leading enterprises to get full play.

Sales Revenue of China Household Appliance Industry, 2001-2006
 

There is always a fast upgrading of the demand for consumer electronics and the upgrading is now accelerated along with the increase of people's disposable income, whatever in the developed countries or in China. The global sales volume of flat panel TVs has been growing at an annual rate of 100% in recent years, even more, the environment-friendly and energy-saving refrigerators and air-conditioners have also become more and more popular among consumers, who, to be noticeable, are more concerned about product brand, quality, security, environmental friendliness and novel functions instead of only price.

Due to huge market demands in China, global manufacturing is transferring into mainland China, which creates great opportunities for China household appliance industry to grow rapidly and drives China to be the strong home appliance manufacture country.

With significant improvement of Chinese household appliance brands, the business of overseas corporations in China is shrinking. The growing business of Chinese household appliance brands in overseas countries shows some domestic home appliance giants have enhanced their international competitiveness.

Owing to low-cost production and improving innovation force, China domestic enterprises win consumers' recognition to their brands and capture higher market shares. Moreover, exportation also enjoy a fast growth in volume as well as for high-end products, which shows that either production or innovation ability of those Chinese enterprises has been widely accepted by consumers both at home and abroad. All of these pose great threats to foreign-owned counterparts who are eager to possess themselves of these advantages via acquisition.

2. Sub-sectors of China Household Appliance Industry in 2006
2.1 Air-conditioner
2.2 Refrigerator
2.3 Illumination Appliance
2.4 Energy Saving Lamp
2.5 Flat Panel Display
2.6 Kitchen Appliance

3. Analysis of Key Enterprises
3.1 Zhuhai Gree Corporation
3.2 Haier Group
3.3 Zhejiang SUPOR Cookware Co., Ltd.
3.4 Midea Group
3.5 Changhong