In the next three to five years, China's home appliances industry will have two major opportunities.

In the next 3-5 years, China's home appliance industry is facing two major epoch-making opportunities: domestic consumer quality upgrades and the "Belt and Road" national strategy abroad.

Faced with market transformation and national policy dividends that everyone can share, all home appliance companies must quickly adjust their strategies and pace and transform and upgrade in order to accurately grasp external market opportunities.

The core of consumption upgrading is product reengineering

In fact, consumption upgrade is an old topic. Recently, at the 2017 Shanghai International Business Annual Conference China Consumer Economy Transformation and Upgrade Summit Forum, Xiaomi CEO Lei Jun frankly said that consumption upgrade is not about selling products more and more expensive, but the core of consumption upgrade should be to buy better products at the same price. In this regard, Xiaomi's experience is user experience and efficiency. This is a typical way to use Internet thinking to make high-quality products.

Lei Jun also said, "The core of retail is still hot products, that is, whether you have what ordinary people want. Consumption upgrade is to provide consumers with high-cost-effective products. Good products with high quality and reasonable prices are liked by people all over the world." Of course, this is just one path Xiaomi is exploring. In the context of consumption upgrade, for Chinese home appliance companies, all roads lead to Rome, and Xiaomi is just an example.

However, in the context of consumption upgrading, everyone needs to re-examine the system of "price/performance ratio". Now "price" refers to both measurable price and immeasurable price (such as design and brand). From another perspective, consumption upgrading will also subvert the product pricing mechanism.

Product production costs are no longer the only core dimension, and the importance of design and consumer demand will rise rapidly. We often have this experience: if we find something we like while browsing Taobao, few people care about what the product is made of or how the company controls costs. They only care about what they need, what they like, and what they can afford.

Fan Gang, a famous economist and professor of economics at Peking University, revealed a set of data: in 2012, household consumption accounted for 35% of China's GDP, and now it is over 40%. Government consumption plus household consumption is about 55%. From 35% to over 40%, a mere 5 percentage point increase, how much market expansion will it bring? Referring to Tmall's Double 11 sales, Tmall's sales in 2012 were 13.2 billion, and in 2015 this figure soared to 91.2 billion, and last year it exceeded 100 billion to 120.7 billion, an 8-fold increase in five years.

If we say that the past three years were the embryonic and nurturing stage of consumption upgrading, then the next three to five years will officially enter the growth and explosion stage of consumption upgrading. For Chinese home appliance companies, the consumption potential contained therein is unlimited. The first is the high-end upgrading of consumption, the second is the high-cost-performance upgrading of consumption, and the third is the personalized and customized upgrading of consumption.

Overseas business opportunities of the Belt and Road Initiative

In 2013, Chinese leaders proposed the "Belt and Road" initiative. In just four years, from top-level design to project implementation, the "Belt and Road" as a national strategy has advanced in construction and improved in development. The implementation of this policy will greatly promote the expansion of consumption in countries along the "Belt and Road", thereby providing new space for the Chinese consumer market and leaving significant room for China's consumption upgrade.

In the past four years, with the proposal of the Belt and Road Initiative, the construction of a large number of railways, roads and many infrastructures is accelerating. For example, in infrastructure construction, the development of electricity will have a significant positive impact on home appliances. According to media reports, in 2016, my country's power companies have carried out investment business and project contracting projects in 52 countries related to the Belt and Road Initiative, including 120 large-scale contracting projects involving 29 countries.

For example, Egypt, a country known as the "Eagle of North Africa", has long been troubled by power shortages. All this will change completely in 2016. The sufficient supply of electricity will also help local residents consume home appliances. At the same time, the improving infrastructure has also created a large number of jobs and increased the income level of local residents. Income is the basis of consumption.

In addition, from the perspective of the international financial environment, the inclusion of the RMB in the Special Drawing Rights (SDR) will also help Chinese home appliance companies reduce exchange rate risks and exchange costs in cross-border trade and investment settlements, and accelerate the internationalization process of Chinese home appliance companies.

All of the above have provided guarantees for the overseas development of my country's home appliance industry from infrastructure to consumption capacity. According to data from the National Bureau of Statistics, in the first half of 2017, the cumulative export volume of the country's home appliance industry to the "Belt and Road" was US$9.055 billion, a year-on-year increase of 15.42%. For my country's home appliance companies, they must attach strategic importance to the development opportunities and space brought by the "Belt and Road".

On the basis of maintaining strong manufacturing capabilities, the overseas market will be a brand new stage and battlefield for Chinese home appliance companies, whether it is Haier and Midea's large-scale overseas mergers and acquisitions, or Hisense and TCL accelerating overseas market revenue growth, or Chigo and Aux taking advantage of the "Belt and Road" strategy. Therefore, with a global and overall strategic vision, we should forge resource docking and integration capabilities that look at the global market as a whole, so as to reshape the new strength and brand image of Chinese home appliance companies.

Whether it is the domestic consumption upgrade opportunities or the external "Belt and Road" opportunities, they will open up market demands of hundreds of millions of units. This cannot be achieved overnight. To share the dividends, home appliance companies must transform and upgrade, and must see farther than others, run faster than others, and provide more for others.

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.