麦肯锡为某著名外企所作中国冰箱行业战略报告

CONFIDENTIAL Industry Situation Analysis: Refrigerator aaaaaa ELECTRONICS CHINA (aaaaaa China) This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey it is not a complete record of the discussion. KEY MESSAGES Refrigerator market is expected to grow at 4.6% annually from RMB 21 billion in 2000 to RMB 26 billion in 2005. Although growing at a rate as high as 31.1%, side-by-side refrigerator market is expected to remain very limited in the next 5 years In general, industry profitability for refrigerator is moderate. However, side-by- side refrigerators enjoy double digit return on sales Except side-by-side refrigerator, refrigerator market is led by local players. However, there are opportunities for MNCs to successfully build up their position by focusing on mid-to-high-end segments The refrigerator industry is relatively “low-tech” and has low entry barriers. Entry into WTO is not expected to have direct huge impact on the competitive environment With market shares around 3 to 4%, aaaaaa is moderately positioned in refrigerator market. 2 MARKET ASSESSMENT Market assessment Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition 3 MARKET ASSESSMENT Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition Evaluation criteria, weight and rating Assessment of market attractiveness Market assessment Product/service definition Relevant regulatory environment and trends Relevant technological environment and trends Market size and growth rate Key buying factors Distribution channel structure Market share by competitor Industry profitability or economics 4 MARKET DEFINITION Product/service definition Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition Market assessment 5 PRODUCT SCOPE WHITE GOODS Product group Product category Air conditioner Washing machine White goods Microwave Packaged A/C Central A/C* Side-by-sideRefrigerator Product subcategories *Used by residentials and small businesses 6 MARKET DEFINITION Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition Market assessment Relevant regulatory environment and trends Relevant technological environment and trends 7 LOW-END REFRIGERATOR MARKET IS LIKELY TO BE DOMINATED BY LOCAL COMPETITORS. MNCS COULD SUCCEED IN THE MID-TO-HIGH- END NICHE MARKETS Regulatory Trends/issues Implications Market has been fairly open and will remain so Most leading MNC players are already in China and have localized their production and sourcing Technological In general, technologies for refrigerators are not very complicated, esp. for low- end products Technology trend is to focus on digitization, artificial intelligence and environmental friendliness Entry to WTO is not expected to have huge direct impact on current competitive environment The market is likely to be dominated by local players who are mostly not as strong in technology as MNC players but stronger in channel and sales capabilities, especially in the low-end segments MNC players are likely to succeed by being niche players and focusing on mid-to-high-end segments Competition in product innovation is likely to focus on customization and localization 8 MARKET DEFINITION Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition Market assessment Market size and growth rate Key buying factors Distribution channel structure 9 ALTHOUGH aaaaaaOND LARGEST MARKET AMONG WHITE GOODS, REFRIGERATOR MARKET GROWTH WILL BE MODEST Source: GFK, SINO-MR, Light Industry Information Center, aaaaaa, field interviews, McKinsey analysis 2000 Side-by-side Non-side-by -side refrigerators 2001 2002 2003 2004 2005 CAGR (00-05) Percent 21,130 22,060 23,050 24,070 25,140 26,260 Key drivers Rationale or assumptions Replace- ment Since the penetration rate in China is high (80%), particularly in major cities (100%), majority of the demand for non-side- by-side refrigerators will come from replacement purchase Income growth Increase in average disposable income drives demand for mid-to-large capacity and mid- to-high end refrigerators Average price Drops at 4% p.a. 74 96 126 166 217 285 4.6 4.4 31.1 Refrigerator market size and growth RMB millions, percent Units sold (non-side-by-side) millions Average selling price (non-side-by-side) 9.4 14.313.112.111.110.2 1,8401,9101,9902,0702,1602,250 8.8 -4.0 10 THE MARKET IS VERY SATIATED Replacement is likely to be the key driver for future demand Source:China Statistics Yearbook Penetration rate in China Tier 1 Tier 2 Tier 3 Whole China 103% 101% 87% 80% 11 MID-TO-LARGE CAPACITY REFRIGERATORS HAVE BEEN CONSUMERs FAVORITE CHOICE Source:SINO-MR, GfK 300L CAGR (00-05) Percent 8.6 9.1 9.4 -18.4 4.5 -22.5 4.9 -5.1 17.3 8.7 -18.4 -18.4 12 SIDE-BY-SIDE REFRIGERATOR MARKET WILL BE OF VERY LIMITED SIZE, DESPITE ITS HIGH GROWTH RATE RMB millions, percent 2000 2001 2002 2003 2004 2005 CAGR (00-05) Percent 31.1 Key drivers Rationale or assumptions Living space Only households with kitchens over 30m2* are assumed to possibly consider side-by side refrigerators Household income Only households with average annual income over RMB500,000 are assumed to possibly consider side-by-side refrigerators Lifestyle Most wealthy people have maids who do grocery shopping everyday and they are not in high demand for super large refrigerators Price Drops at 2% p.a. *Construction area Source:Zhongxi Trading Co., aaaaaa, Lufthansa Department Store, Sci-tech Department Store, YYSC, team analysis 3,500 4,680 6,260 8,380 11,210 15,000 33.8Units sold Side-by-side refrigerator market size and growth Average selling price 21.0 20.6 20.2 19.8 19.4 19.0 -2.0 Key customer groups Chinese educated overseas Expatriates Wealthy local people Key markets Beijing Shanghai Guangzhou Shenzhen Shenyang 13 PRICE IS THE DOMINANT FACTOR FOR CONSUMERS NON-SIDE-BY-SIDE REFRIGERATOR CHOICE WHILE BRAND AWARENESS IS MORE IMPORTANT FOR SIDE-BY-SIDE REFRIGERATOR Factors to consider when making non-side-by-side refrigerator purchasing decisions Percent of respondents Source:IMI, SCSS2000, interview 47 28 26 23 19 17 14 14 10 7 4 Brand image Price Capacity Energy-saving Exterior design Low noise No frost After-sales service Non-CFCs Freezer capacity Other KBFs for side by side refrigerator Soft commercials, such as putting a side-by-side refrigerator in the club of high- end residential area is very effective in increasing the awareness Many potential customers are not fully aware of the existence of side-by-side refrigerators in China market When making purchase decisions, the key factors that customers consider are brand, design and featureMr.Gu Yong Guy Manager ZXHY Trading Co. 14 DIRECT COOLING IS STILL THE PREFERRED CHOICE ACROSS THE MARKET Percent Source:SINO-MR; GfK, field interview North West East China Although indirect-cooling refrigerator is frost-free, it tends to dry up the food. As a result, it is particularly unpopular in less humid areas such as Northern China North East North China South West Central West Market share of direct cooling refrigerators in major cities, 2000 15 CHANNEL STRUCTURE FOR REFRIGERATORS IS FLAT, ESPECIALLY FOR LOCAL PLAYERS Source:Interview Manufacturers First tier distributors Retailers Local manufacturers = 70-80% MNC manufacturers = 30-50% Department stores Hypermarkets Specialty stores Others Local manufacturers = 20-30% MNC manufacturers = 50-70% 16 AMONG ALL RETAIL CHANNELS, HYPER MARKETS AND SPECIALTY STORES ARE EXPECTED TO GROW FAST IN THE NEAR FUTURE Sales distribution by channel - white goods Percent Hyper markets Specialty stores* Department stores Others 5 1998 2000 2003E *Includes electronic chains such as Guomei and Dazhong Source:Saaaaaa 17 DISTRIBUTION STRUCTURE FOR SIDE-BY-SIDE REFRIGERATORS DIFFER BY TIER CITIES Tier 1 cities Manufacturers 1st tier distributors Retailers 2nd tier distributors 20% 70% End users10% Manufacturers 1st tier distributors Retailers 100%Tier 2 cities Source:Field interview 18 KELONs CHANNEL STRUCTURE FOR REFRIGERATORS Source:Annual report, field interviews Rongsheng Kelon is currently exploring other channel strategies: Set up sales and distribution companies with distributors Cooperate with large retailers such as Carrefour and Guomei in product planning Kelon Retailers 1st tier distributors 95% 5% Kelon Retailers 1st tier distributors 40% 60% Kelon 19 HAIER HAS A DISTINCTIVE DISTRIBUTION APPROACH WHICH IS HEAVILY FOCUSING ON DIRECT RETAIL SALES FOR BASE AND HUB CITIES Source: Field interview; McKinsey analysis Specialty shores First tier city aaaaaaond tier city Third tier city Haier shop-in -shops Retailers in first tier cities Retailers in some large aaaaaaond tier cities Specialty store Haier shop in shops Retailers in aaaaaaond tier cities Specialty store Haier shop in shops Retailers in third tier cities Specialty stores Haier A/C sales Co. Haier sales branches in small aaaaaaond tier cities Wholesales in some third tier cities Haier sales center in first tier cities Haier sales center in some large aaaaaaond tier cities Haier sales centers in first and aaaaaaond tier cities Haier sales branches in big third tier cities East region North region West regionSouth region 20 MARKET DEFINITION Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition Market assessment Market share by competitor Industry profitability or economics 21 WHILE THE MARKET IS GETTING MORE DOMINATED BY TOP PLAYERS COMBINED, MNC PLAYERS ARE GRADUALLY TAKING MORE SHARES *Rongsheng and Kelon combined Source:SINO-MR, GfK, LIIC 100%= 1998 Others 1999 2000 37.4 15.5 8.72.7 32.4 35.7 13.8 8.2 5.9 5.7 28.0 30.9 12.3 8.6 10.0 8.8 26.1 aaaaaa Electrolux Meiling Kelon* Haier Siemens 8.6 9.1 9.4 Haier and Kelon are the leading players. However, their market shares are decreasing Although latecomers to the market, Electrolux and Siemens are quickly building up their positions by focusing on mid-to high-end and high -end markets Compared to other MNC players, aaaaaas growth in the market is rather slow Millions units, percent Refrigerator market share of major players in major cities 4.5 -6.2 15.6 270.7 101.2 3.9 -6.9 -5.0 CAGR (98-00) Percent aaaaaa Haier/Kelon/Meiling Siemens/Electrolux 2.6 3.3 2.7 0.7 22 EAST, SOUTH AND SOUTHWEST CHINA SEEM TO BE THE WINNING TERRITORY FOR MNC PLAYERS * Kelon and Rongsheng combined Source:SINO-MR, GfK, LIIC 100%= North China Others aaaaaa Electrolux Meiling Kelon* Haier Siemens 2.3 3.5 0.5 Electrolux and Siemens are doing particularly well in Southwest Apart from Southwest, MNC players are doing better in east China and South China, relatively more affluent areas aaaaaa is relatively strong in East China and South China North East East China Central South South West North West 0.9 0.71.4 32.0 11.6 8.5 9.8 5.31.7 30.8 36.6 16.1 11.5 7.6 5.9 0.4 21.9 26.0 6.2 9.7 9.4 8.2 10.1 30.3 31.0 14.3 6.9 9.7 10.5 3.3 24.4 20.4 11.0 9.8 19.2 18.5 0.3 20.8 33.8 18.2 9.6 8.6 0.1 24.1 5.6 Market share in major cities by geography, 2000 Million units, percent aaaaaa Haier/Kelon/Meiling Siemens/Electrolux 23 LOCAL LEADING PLAYERS ARE DOMINATING IN ALMOST ALL PRICE SEGMENTS, MNC PLAYERS TEND TO BE STRONG IN MID-TO-HIGH END MARKETS *Another Kelons brand Source:SINO-MR, GfK, LIIC 100%= 4,000 2.0 1.92.0 24.1 12.5 1.2 17.8 19.6 24.8 0 0 16.0 12.6 0.1 7.7 4.1 45.7 13.8 28.3 16.5 0.1 8.5 10.0 31.5 1.93.4 47.3 9.7 1.1 5.9 8.8 7.2 1.3 18.7 36.3 2.03.8 2.9 19.3 26.0 9.4 0.4 29.8 0.1 4.3 4.7 0.3 48.1 0.3 12.5 Rongsheng* 0 Market share in major cities by price band, 2000 Million units, percent Electrolux Kelon/Rongsheng Siemens aaaaaa 24 LOCAL PLAYERS ARE DOMINANT IN MOST PRODUCT SEGMENTS, MNC PLAYERS HAVE STRENGTH IN MID-TO-LARGE CAPACITY MARKETS *Another Kelons brand Source:SINO-MR, GfK, LIIC 100%= 300L 2.6 0.03 Rongsheng* 40.4 7.8 0 36.9 0.1 19.8 51.2 13.4 0 1.4 9.6 0 2.8 21.4 24.8 23.3 0.5 9.0 7.7 6.5 1.1 27.1 29.8 9.1 0.8 13.7 5.2 7.5 4.2 29.7 35.5 11.7 0.8 5.9 11.0 10.1 2.9 22.1 23.4 5.4 1.17.8 24.1 2.6 1.2 34.4 17.2 8.5 5.2 5.0 13.7 30.4 19.9 0.1 25.1 0 19.0 2.6 1.1 52.0 0.2 0 Market share in major cities by product type, 2000 aaaaaa Haier/Rongsheng/Kelon Siemens/Electrolux 25 GE IS THE LEADING PLAYER IN SIDE-BY-SIDE REFRIGERATOR MARKET 100%= Others* aaaaaa 1,000 3,500 The market is dominated by MNC players aaaaaa has significant share in the market. However, GE clearly dominates New players such as Haier are entering the market The high-end side-by -side refrigerator market is likely to remain MNCs territory while “local players” will focus on lower-end segments Units, Percent Unit market share 60 *Includes Haier, LG, Whirlpool, etc. Source:Zhongxi Trading Co., aaaaaa GE 1999 2000 Growth percent 250 N/A 319 211 26 KEY MNC PLAYERS ENJOY PRICE PREMIUMS IN SIDE-BY-SIDE REFRIGERATORS GE entered the market first and has the strongest brand image. Its price is the highest aaaaaas price is 10-20% lower than GEs Other players prices are on average 10% lower than aaaaaas Source:Field interview; GfK 27 KELON AND MEILINGS FINANCIALS SHOW THAT MANUFACTURERS PROFIT SUFFERED OVER THE PAST FEW YEARS AND ARE EXPECTED TO REMAIN LOW Source:Morgan Stanley Dean Witter report, annual reports Meiling 1997 2001E 2000E 1999 1998 Kelon EBIT margin Percent 28 MARKET ASSESSMENT Market assessment Supply (competitor) analysis Demand (customer) analysis Overall environment analysis Market definition Evalua