The tide of raw material price increase has begun, and Ningbo washing machine companies have collectively raised prices to survive

Recently, many home appliance dealers in the market reported to the home appliance circle that since mid-August, affected by the rise in upstream raw materials, many washing machine factories in Cixi, Ningbo, collectively raised their ex-factory prices by about 3%-5%. Involved are Cixi Meiluo Electric, Ningbo Huacai Electric, Ningbo Budweiser Electric, Cixi Keyi Electric, Cixi Amei Electric and many other companies.

It is worth noting that these washing machine factories in Ningbo do not have their own "famous" brands in the first-tier home appliance market. They mainly target remote rural markets, or imitate famous brands or copycat brands, and adopt a "one-ticket-all" operation mode to sell to home appliance dealers in various regions at bare prices. This is a typical "cost-driven" low-profit operation mode. Once the upstream raw materials rise too quickly, it will lead to an increase in the supply price in the downstream market.

It is reported that the above-mentioned washing machine factories emphasized in the business letters sent to dealers that the factory price increase was a helpless move. They were originally operating at a low profit and could no longer cope with the current pressure of rising raw material prices. Some washing machine factories pointed out in the business letters that the skyrocketing prices of raw materials (including copper, steel, cartons, plastics, etc.) have led to rising production costs, and the increase in some raw materials has exceeded 20%. From mid-August, the factory price of all washing machines will increase by 3%; some washing machine factories emphasized in the business letters that the cost of some accessories has increased by nearly 30%, and the prices of washing machines and dehydrators are still rising, with a price increase of 5%.

In fact, this round of price hikes not only affects the processing-by-supplied enterprises at the lowest end of China's home appliance industry chain, such as the small and medium-sized washing machine and refrigerator factories in Ningbo mentioned above. It also impacts other home appliance companies that are on the path of transformation and upgrading. Recently, due to a new round of national environmental protection supervision storms, the focus is on the rectification of industries and fields such as steel and chemicals, which has led to price increases for upstream accessories such as plastic particles, plates, and packaging materials related to home appliances, which has had a significant impact on the downstream manufacturers of complete machines in the home appliance industry.

At present, the biggest impact of this round of raw material price increases is not just on the above-mentioned washing machine companies. In fact, several people from home appliance factories revealed that the price of refrigerator black materials has risen more sharply, bringing a burden of about 10% on the cost of downstream refrigerators. Many small and medium-sized refrigerator factories have once again fallen into a cold winter.

In the short term, this round of national environmental protection supervision has brought about price increases for steel, chemical materials such as refrigerants, and raw materials such as plastic parts. This is already an open pressure that cannot be directly resolved. The reason why some small home appliance factories took the lead in raising prices is that their products lack brand premiums and are completely based on the raw material pricing mechanism; while other large and medium-sized home appliance factories faced the same pressure but did not choose to raise prices immediately, precisely because of their ability in corporate management innovation, technological innovation, and brand premium.

Next, if the current round of raw material price increases remains unchanged, if large and medium-sized home appliance manufacturers continue to choose to "stand still" and not raise prices, those small home appliance manufacturers that have raised prices will inevitably face the pressure of being eliminated. As the saying goes, many small and medium-sized home appliance manufacturers are courting death by raising prices, and they are waiting to die if they do not raise prices!

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.