Can Japan's declining home appliance industry regain its "former glory"?

Japanese home appliance manufacturers once led the world in white goods such as washing machines and refrigerators, as well as electrical appliances such as televisions and video recorders (VTRs). However, in the past decade or so, most Japanese home appliance manufacturers have fallen into a slump. Japan's leading position in the home appliance field has been replaced by Asian countries and regions such as South Korea, China and Taiwan.

Last year (2016), Sharp was acquired by Taiwan's Hon Hai Precision Industry Co., Ltd. for restructuring. Sharp began developing electronic calculators and microwave ovens in the 1960s, and developed small and lightweight semiconductor substrates and liquid crystal technology. Hot-selling new products such as electronic calculators, electronic account books, and word processors have emerged one after another, and the crystallization of these technologies is the LCD TV "AQUOS" launched in 2001. Compared with the previous cathode ray tube screen TV, AQUOS is very thin and light, becoming a super popular product. Sharp uses Kameyama City in Mie Prefecture, known as the "Kameyama of the World", as its main factory and has established large factories here one after another. However, with the growth of Korean and other electrical companies and the launch of products with comparable performance and lower prices, the market has fallen into low-price competition. Sharp also suffered huge losses due to the large-scale investment in the LCD production factory.

In 2017, Toshiba, one of Japan's representative integrated electrical appliance manufacturers, also fell into a serious business crisis. The focus of attention has been on which company to sell its core industry, the semiconductor business, to in order to achieve reconstruction. Analysts say that the current business difficulties faced by Toshiba are due to the failure of its investment in the US nuclear power industry, the company's strategy of focusing on the home appliance business, and its misfortune in predicting the future market.

Toshiba has been laying off employees in its home appliance division since the fall of 2015. In late December of the same year, then-president Masashi Muromachi said with deep sorrow: "Toshiba must abandon its home appliance business and invest the savings in energy (nuclear power) and storage (memory media, semiconductors) businesses." The history of Toshiba can be described as the history of the development of Japan's home appliance industry. Since the manufacture of incandescent lamps in 1890, Toshiba has manufactured Japan's first domestically produced electric fans, washing machines, and refrigerators. After the 1980s, Toshiba launched the world's first laptop computer and DVD player, and its market share in the personal computer field once ranked first in the world.

Sharp and Toshiba are not the only companies that have failed in the home appliance industry. Panasonic, Sony, Hitachi and other world-renowned large companies have also experienced huge setbacks and fallen into business difficulties in the past decade.

After entering the 21st century, Japanese home appliances declined due to the rapid rise of the home appliance industries in South Korea and China. The emerging forces conducted a thorough study of Japanese products and quickly occupied the market share of Japanese products with their advantages of low prices and good quality. When launching products overseas, Japanese manufacturers mostly copied the products sold in Japan, while Korean manufacturers would investigate the lives and needs of local people and reflect the survey results in the products. For example, in order to cater to the Chinese habit of not mixing underwear with other clothes, washing machines with upper and lower washing troughs were launched; in India, in order to prevent food from being stolen, refrigerators with locks were specially launched.

The huge impact of the digital transformation of the times

The reason why it is easier for emerging companies to participate in market competition is largely due to the change of the times from analog signal type to digital development of electrical appliances. In the analog signal era, both product development and assembly technology required high technical capabilities. This also became a barrier for latecomers to enter the market. Most of the leading Japanese companies in the field of home appliances can quickly develop high-performance and high-quality products, and the world market also has a great demand for such products.

However, with the development of digitalization, the technical barriers are getting lower and lower. The rapid development of semiconductor technology has made it easier to manufacture products with the same functions and performance. Products with good quality and low prices are widely favored by consumers, and sales are also rising. However, Japanese companies are obsessed with past successful experiences and think that as long as they have good quality products, they will definitely have a market, and stick to the policy of manufacturing high-performance products.

After the 1990s, with the collapse of the socialist economy in communist countries, the world market has once again moved towards unification. China's market opening policy has brought a huge new market to the world. The economies of emerging countries such as Asia and Africa are constantly developing, and the market share is gradually shifting from developed countries to emerging countries, which has also led to huge changes in the global market.

In markets dominated by emerging countries, products that are "good quality but a bit expensive" do not sell well, and only "cheap products" or "products that are not expensive (due to their scarcity, brand, representative significance, etc.)" can survive.

In addition, dealing with the 2008 financial crisis put many companies in trouble. In particular, Toshiba and Sharp were still clinging to their "past glory" under the circumstances at the time and missed a good opportunity to revive.

Relatively speaking, Hitachi and Panasonic were less affected. Hitachi had been in deficit since the beginning of the 21st century, and its business situation hit rock bottom in 2008, with an annual deficit of 780 billion yen. Hitachi decisively abandoned its TV and computer businesses, shifted its development focus to business content such as infrastructure for enterprises, and reorganized the group, eventually achieving a V-shaped recovery in performance in 2010.

Panasonic acquired Sanyo Electric in 2011, which once became a heavy burden and made it difficult for Panasonic to move forward. In the joint financial statements for the fiscal year 2012 to March 2013, the net loss totaled 1.52 trillion yen. This also announced the complete failure of Panasonic's main business at the time, plasma TVs (which are easier to manufacture large-screen products and have more vivid dynamic images than LCD TVs). Panasonic's top management decided to reduce the home appliance business and carry out reconstruction plans, and resolutely laid off employees. They invested resources in promising areas such as automobiles and housing, and planned to develop them into new pillar industries of the company. Panasonic currently maintains the production capacity of all home appliances, but has adopted a development strategy of ① promoting high-performance and high-priced products made in Japan to the wealthy class in Asia ② promoting products produced in the target country to expand the customer base to the middle class. In fact, this management method was learned from its competitor Korean companies to achieve business revitalization.

Sony, a world-renowned brand, has also been actively exploring restructuring and transformation in recent years. Sony's original industry is the electrical appliance business, but it has lost its advantage in global competition and is having difficulty developing. Sony plans to focus its resources on entertainment industries such as film and music to overcome its operating difficulties.

As the management department of the home appliance industry, the Ministry of Economy, Trade and Industry of Japan has intervened in various ways in the reconstruction of Sharp and Toshiba to prevent technology loss and maintain the survival of Japan's home appliance industry, but it has not succeeded. When reorganizing Sharp, the Ministry of Economy, Trade and Industry tried to make large-scale adjustments to Toshiba at the same time and put it under the jurisdiction of the Industrial Innovation Agency, but this move failed. In the end, it lost to Hon Hai, which offered generous funds and special conditions. Compared with the "national policy" that requires layoffs and debt waivers, Sharp's senior management and major investment banks prefer Hon Hai, which promises to rebuild through business integration.

Regarding the sale of Toshiba's semiconductor business, the Ministry of Economy, Trade and Industry is concerned about the risk of technology leakage overseas, but the relevant plan has never been smoothly implemented. Some officials of the Ministry of Economy, Trade and Industry pessimistically stated: "Japanese manufacturers have lost their technological leadership in the field of home appliances, and the possibility of Japanese companies surpassing other Asian competitors again is very small."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.