中国冰箱行业战略报告.ppt

aaaaaa010807BJ refrigerator CONFIDENTIAL IndustrySituationAnalysis Refrigerator aaaaaaELECTRONICSCHINA aaaaaaChina Thisreportissolelyfortheuseofclientpersonnel Nopartofitmaybecirculated quoted orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinseyitisnotacompleterecordofthediscussion aaaaaa010807BJ refrigerator 1 KEYMESSAGES Refrigeratormarketisexpectedtogrowat4 6 annuallyfromRMB21billionin2000toRMB26billionin2005 Althoughgrowingatarateashighas31 1 side by siderefrigeratormarketisexpectedtoremainverylimitedinthenext5yearsIngeneral industryprofitabilityforrefrigeratorismoderate However side by siderefrigeratorsenjoydoubledigitreturnonsalesExceptside by siderefrigerator refrigeratormarketisledbylocalplayers However thereareopportunitiesforMNCstosuccessfullybuilduptheirpositionbyfocusingonmid to high endsegmentsTherefrigeratorindustryisrelatively low tech andhaslowentrybarriers EntryintoWTOisnotexpectedtohavedirecthugeimpactonthecompetitiveenvironmentWithmarketsharesaround3to4 aaaaaaismoderatelypositionedinrefrigeratormarket aaaaaa010807BJ refrigerator 2 MARKETASSESSMENT Marketassessment Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition aaaaaa010807BJ refrigerator 3 MARKETASSESSMENT Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition Evaluationcriteria weightandratingAssessmentofmarketattractiveness Marketassessment Product servicedefinition RelevantregulatoryenvironmentandtrendsRelevanttechnologicalenvironmentandtrends MarketsizeandgrowthrateKeybuyingfactorsDistributionchannelstructure MarketsharebycompetitorIndustryprofitabilityoreconomics aaaaaa010807BJ refrigerator 4 MARKETDEFINITION Product servicedefinition Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition Marketassessment aaaaaa010807BJ refrigerator 5 PRODUCTSCOPE WHITEGOODS Productgroup Productcategory Airconditioner Washingmachine Whitegoods Microwave PackagedA CCentralA C Side by side Refrigerator Productsubcategories Usedbyresidentialsandsmallbusinesses aaaaaa010807BJ refrigerator 6 MARKETDEFINITION Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition Marketassessment RelevantregulatoryenvironmentandtrendsRelevanttechnologicalenvironmentandtrends aaaaaa010807BJ refrigerator 7 LOW ENDREFRIGERATORMARKETISLIKELYTOBEDOMINATEDBYLOCALCOMPETITORS MNCSCOULDSUCCEEDINTHEMID TO HIGH ENDNICHEMARKETS Trends issues Implications MarkethasbeenfairlyopenandwillremainsoMostleadingMNCplayersarealreadyinChinaandhavelocalizedtheirproductionandsourcing Ingeneral technologiesforrefrigeratorsarenotverycomplicated esp forlow endproductsTechnologytrendistofocusondigitization artificialintelligenceandenvironmentalfriendliness EntrytoWTOisnotexpectedtohavehugedirectimpactoncurrentcompetitiveenvironment ThemarketislikelytobedominatedbylocalplayerswhoaremostlynotasstrongintechnologyasMNCplayersbutstrongerinchannelandsalescapabilities especiallyinthelow endsegmentsMNCplayersarelikelytosucceedbybeingnicheplayersandfocusingonmid to high endsegmentsCompetitioninproductinnovationislikelytofocusoncustomizationandlocalization aaaaaa010807BJ refrigerator 8 MARKETDEFINITION Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition Marketassessment MarketsizeandgrowthrateKeybuyingfactorsDistributionchannelstructure aaaaaa010807BJ refrigerator 9 ALTHOUGHaaaaaaONDLARGESTMARKETAMONGWHITEGOODS REFRIGERATORMARKETGROWTHWILLBEMODEST Source GFK SINO MR LightIndustryInformationCenter aaaaaa fieldinterviews McKinseyanalysis 2000 Side by side Non side by siderefrigerators 2001 2002 2003 2004 2005 CAGR 00 05 Percent 21 130 22 060 23 050 24 070 25 140 26 260 Keydrivers Rationaleorassumptions Replace ment SincethepenetrationrateinChinaishigh 80 particularlyinmajorcities 100 majorityofthedemandfornon side by siderefrigeratorswillcomefromreplacementpurchase Incomegrowth Increaseinaveragedisposableincomedrivesdemandformid to largecapacityandmid to highendrefrigerators Averageprice Dropsat4 p a 74 96 126 166 217 285 4 6 4 4 31 1 RefrigeratormarketsizeandgrowthRMBmillions percent Unitssold non side by side millions Averagesellingprice non side by side 9 4 14 3 13 1 12 1 11 1 10 2 1 840 1 910 1 990 2 070 2 160 2 250 8 8 4 0 aaaaaa010807BJ refrigerator 10 THEMARKETISVERYSATIATED Replacementislikelytobethekeydriverforfuturedemand Source ChinaStatisticsYearbook PenetrationrateinChina Tier1Tier2Tier3WholeChina 103 101 87 80 aaaaaa010807BJ refrigerator 11 MID TO LARGECAPACITYREFRIGERATORSHAVEBEENCONSUMER sFAVORITECHOICE Source SINO MR GfK 100L 100 1998 1999 2000 HistoricalmarketsizebycapacityinmajorcitiesPercent millionunits 0 6 0 5 0 4 100 150L 150 180L 180 200L 200 225L 225 250L 250 300L 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 aaaaaa010807BJ refrigerator 12 SIDE BY SIDEREFRIGERATORMARKETWILLBEOFVERYLIMITEDSIZE DESPITEITSHIGHGROWTHRATE RMBmillions percent 2000 2001 2002 2003 2004 2005 CAGR 00 05 Percent 31 1 Keydrivers Rationaleorassumptions Livingspace Onlyhouseholdswithkitchensover30m2 areassumedtopossiblyconsiderside bysiderefrigerators Householdincome OnlyhouseholdswithaverageannualincomeoverRMB500 000areassumedtopossiblyconsiderside by siderefrigerators Lifestyle Mostwealthypeoplehavemaidswhodogroceryshoppingeverydayandtheyarenotinhighdemandforsuperlargerefrigerators Price Dropsat2 p a ConstructionareaSource ZhongxiTradingCo aaaaaa LufthansaDepartmentStore Sci techDepartmentStore YYSC teamanalysis 3 500 4 680 6 260 8 380 11 210 15 000 33 8 Side by siderefrigeratormarketsizeandgrowth 21 0 20 6 20 2 19 8 19 4 19 0 2 0 KeycustomergroupsChineseeducatedoverseasExpatriatesWealthylocalpeopleKeymarketsBeijingShanghaiGuangzhouShenzhenShenyang aaaaaa010807BJ refrigerator 13 PRICEISTHEDOMINANTFACTORFORCONSUMER SNON SIDE BY SIDEREFRIGERATORCHOICEWHILEBRANDAWARENESSISMOREIMPORTANTFORSIDE BY SIDEREFRIGERATOR Factorstoconsiderwhenmakingnon side by siderefrigeratorpurchasingdecisionsPercentofrespondents Source IMI SCSS2000 interview 47 28 26 23 19 17 14 14 10 7 4 Brandimage Price Capacity Energy saving Exteriordesign Lownoise Nofrost After salesservice Non CFCs Freezercapacity Other KBFsforsidebysiderefrigerator Softcommercials suchasputtingaside by siderefrigeratorintheclubofhigh endresidentialareaisveryeffectiveinincreasingtheawareness Whenmakingpurchasedecisions thekeyfactorsthatcustomersconsiderarebrand designandfeature Mr GuYongGuyManagerZXHYTradingCo aaaaaa010807BJ refrigerator 14 DIRECTCOOLINGISSTILLTHEPREFERREDCHOICEACROSSTHEMARKET Percent Source SINO MR GfK fieldinterview NorthWest EastChina Althoughindirect coolingrefrigeratorisfrost free ittendstodryupthefood Asaresult itisparticularlyunpopularinlesshumidareassuchasNorthernChina NorthEast NorthChina SouthWest CentralWest Marketshareofdirectcoolingrefrigeratorsinmajorcities 2000 aaaaaa010807BJ refrigerator 15 CHANNELSTRUCTUREFORREFRIGERATORSISFLAT ESPECIALLYFORLOCALPLAYERS Source Interview Localmanufacturers 70 80 MNCmanufacturers 30 50 Localmanufacturers 20 30 MNCmanufacturers 50 70 aaaaaa010807BJ refrigerator 16 AMONGALLRETAILCHANNELS HYPERMARKETSANDSPECIALTYSTORESAREEXPECTEDTOGROWFASTINTHENEARFUTURE Salesdistributionbychannel whitegoodsPercent Hypermarkets Specialtystores Departmentstores Others 5 1998 2000 2003E IncludeselectronicchainssuchasGuomeiandDazhongSource Saaaaaa aaaaaa010807BJ refrigerator 17 DISTRIBUTIONSTRUCTUREFORSIDE BY SIDEREFRIGERATORSDIFFERBYTIERCITIES Tier1cities Manufacturers 1sttierdistributors Retailers 2ndtierdistributors 20 70 Endusers 10 Manufacturers 1sttierdistributors Retailers 100 Tier2cities Source Fieldinterview aaaaaa010807BJ refrigerator 18 KELON sCHANNELSTRUCTUREFORREFRIGERATORS Source Annualreport fieldinterviews Rongsheng Keloniscurrentlyexploringotherchannelstrategies SetupsalesanddistributioncompanieswithdistributorsCooperatewithlargeretailerssuchasCarrefourandGuomeiinproductplanning Kelon Retailers 1sttierdistributors 95 5 Kelon Retailers 1sttierdistributors 40 60 Kelon aaaaaa010807BJ refrigerator 19 HAIERHASADISTINCTIVEDISTRIBUTIONAPPROACHWHICHISHEAVILYFOCUSINGONDIRECTRETAILSALESFORBASEANDHUBCITIES Source Fieldinterview McKinseyanalysis Specialtyshores Firsttiercity aaaaaaondtiercity Thirdtiercity Haiershop in shops Retailersinfirsttiercities RetailersinsomelargeaaaaaaondtiercitiesSpecialtystoreHaiershopinshops RetailersinaaaaaaondtiercitiesSpecialtystoreHaiershopinshops RetailersinthirdtiercitiesSpecialtystores HaierA CsalesCo Haiersalesbranchesinsmallaaaaaaondtiercities Wholesalesinsomethirdtiercities Haiersalescenterinfirsttiercities Haiersalescenterinsomelargeaaaaaaondtiercities Haiersalescentersinfirstandaaaaaaondtiercities Haiersalesbranchesinbigthirdtiercities Eastregion Northregion Westregion Southregion aaaaaa010807BJ refrigerator 20 MARKETDEFINITION Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition Marketassessment MarketsharebycompetitorIndustryprofitabilityoreconomics aaaaaa010807BJ refrigerator 21 WHILETHEMARKETISGETTINGMOREDOMINATEDBYTOPPLAYERSCOMBINED MNCPLAYERSAREGRADUALLYTAKINGMORESHARES RongshengandKeloncombinedSource SINO MR GfK LIIC 100 1998 Others 1999 2000 37 4 15 5 8 7 2 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 HaierandKelonaretheleadingplayers However theirmarketsharesaredecreasingAlthoughlatecomerstothemarket ElectroluxandSiemensarequicklybuildinguptheirpositionsbyfocusingonmid tohigh endandhigh endmarketsComparedtootherMNCplayers aaaaaa sgrowthinthemarketisratherslow Millionsunits percent Refrigeratormarketshareofmajorplayersinmajorcities 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 aaaaaa010807BJ refrigerator 22 EAST SOUTHANDSOUTHWESTCHINASEEMTOBETHEWINNINGTERRITORYFORMNCPLAYERS KelonandRongshengcombinedSource SINO MR GfK LIIC 100 NorthChina Others aaaaaa Electrolux Meiling Kelon Haier Siemens 2 3 3 5 0 5 ElectroluxandSiemensaredoingparticularlywellinSouthwestApartfromSouthwest MNCplayersaredoingbetterineastChinaandSouthChina relativelymoreaffluentareasaaaaaaisrelativelystronginEastChinaandSouthChina NorthEast EastChina CentralSouth SouthWest NorthWest 0 9 0 7 1 4 32 0 11 6 8 5 9 8 5 3 1 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 Marketshareinmajorcitiesbygeography 2000Millionunits percent aaaaaa Haier Kelon Meiling Siemens Electrolux aaaaaa010807BJ refrigerator 23 LOCALLEADINGPLAYERSAREDOMINATINGINALMOSTALLPRICESEGMENTS MNCPLAYERSTENDTOBESTRONGINMID TO HIGHENDMARKETS AnotherKelon sbrandSource SINO MR GfK LIIC 100 1 500 Others aaaaaa Electrolux Meiling Kelon Haier Siemens 0 9 2 3 0 3 Siemensisfocusingonveryhigh endmarketwhileElectroluxisfocusingonmid to highendmarketaaaaaademonstratedstrengthinlow pricemarketKelonusesmulti brandstrategytotargetbothlow to midendmarketandmid to highendmarket 1 500 2 500 2 000 2 500 2 500 3 000 3 000 4 000 4 000 2 0 1 9 2 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 9 3 4 47 3 9 7 1 1 5 9 8 8 7 2 1 3 18 7 36 3 2 0 3 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 Marketshareinmajorcitiesbypriceband 2000Millionunits percent Electrolux Kelon Rongsheng Siemens aaaaaa aaaaaa010807BJ refrigerator 24 LOCALPLAYERSAREDOMINANTINMOSTPRODUCTSEGMENTS MNCPLAYERSHAVESTRENGTHINMID TO LARGECAPACITYMARKETS AnotherKelon sbrandSource SINO MR GfK LIIC 100 100L Others aaaaaa Electrolux Meiling Kelon Haier Siemens 0 2 1 0 0 7 HaierisleadinginmostmarketsElectroluxandSiemenshavestrongpositioninmid to largecapacitymarketsaaaaaaisverystronginsmallcapacity 100L marketandisrelativelystronginmidcapacitymarket 100 150L 150 180L 0 6 1 2 3 1 180 200L 200 225L 225 250L 250 300L 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 1 7 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 Marketshareinmajorcitiesbyproducttype 2000 aaaaaa Haier Rongsheng Kelon Siemens Electrolux aaaaaa010807BJ refrigerator 25 GEISTHELEADINGPLAYERINSIDE BY SIDEREFRIGERATORMARKET 100 Others aaaaaa 1 000 3 500 ThemarketisdominatedbyMNCplayersaaaaaahassignificantshareinthemarket However GEclearlydominatesNewplayerssuchasHaierareenteringthemarketThehigh endside by siderefrigeratormarketislikelytoremainMNC sterritorywhile localplayers willfocusonlower endsegments Units Percent Unitmarketshare 6 0 IncludesHaier LG Whirlpool etc Source ZhongxiTradingCo aaaaaa GE 1999 2000 Growthpercent 250 N A 319 211 aaaaaa010807BJ refrigerator 26 KEYMNCPLAYERSENJOYPRICEPREMIUMSINSIDE BY SIDEREFRIGERATORS GEenteredthemarketfirstandhasthestrongestbrandimage It spriceisthehighestaaaaaa spriceis10 20 lowerthanGE sOtherplayers pricesareonaverage10 lowerthanaaaaaa s Source Fieldinterview GfK aaaaaa010807BJ refrigerator 27 KELONANDMEILING SFINANCIALSSHOWTHATMANUFACTURER SPROFITSUFFEREDOVERTHEPASTFEWYEARSANDAREEXPECTEDTOREMAINLOW Source MorganStanleyDeanWitterreport annualreports Meiling 1997 2001E 2000E 1999 1998 Kelon EBITmarginPercent aaaaaa010807BJ refrigerator 28 MARKETASSESSMENT Marketassessment Supply competitor analysis Demand customer analysis Overallenvironmentanalysis Marketdefinition Evaluationcriteria weightandratingAssessmentofmarket