Abstract: According to the data of the National Bureau of Statistics, the output of household electric fans in mainland China will reach 249.724 million units in 2021, and by 2022, the output of household electric fans in mainland China will drop to 197.8071 million units. With the increase in residents' income levels and disposable incomes, consumers are willing to pay higher prices for more comfortable, smarter, and more designed fans. This has prompted fan manufacturers to continuously develop innovative technologies such as intelligent temperature control, remote control, air purification and other functions to meet market demand. At the same time, fashionable and personalized design has also become an important factor to attract consumers, and smart fans will become an important growth point in the fan industry.
1. Definitions and Classification
Electric fan, also known as fan or fan, is a household appliance that uses an electric motor to drive the fan blades to rotate to accelerate air circulation, mainly used to cool off the heat and circulate air. Electric fans can be divided into several categories based on their design and use. Common ones include desktop fans, ceiling fans, wall-mounted fans, vertical fans, multi-function fans, handheld fans, industrial fans, smart fans, USB fans, etc.
Second, the business model
1. Procurement mode
The main raw materials purchased by electric fan manufacturers are steel, motors and other raw materials. The procurement mode of electric fan manufacturers is mainly a centralized procurement model, and the company has set up a special procurement department to be responsible for the unified procurement of all raw materials and parts required for production. Centralized procurement helps to reduce procurement costs, improve procurement efficiency, and ensure the quality and stability of raw material supply. Fan manufacturers sign long-term cooperation agreements with key suppliers to ensure stable supply and possible price concessions. This model helps both parties build a long-term relationship of trust and maintain stable costs when market prices fluctuate.
2. Production mode
The production mode of electric fan manufacturers is mainly the production mode of "sales and production", and the production plan is determined according to market demand and sales orders. In this model, the company arranges production based on sales forecasts and actual orders from customers to maximize market demand while avoiding inventory overstock and waste. This production model helps to reduce inventory costs, improve capital turnover, and reduce the risk of unsalable products.
3. Sales model
The sales model of electric fan manufacturers mainly adopts a sales model that combines online sales and offline sales. The online sales model is mainly carried out through e-commerce platforms such as Tmall, JD.com, Suning.com, and the official websites of electric fan manufacturers. The company is responsible for daily operation management, product sales, delivery, maintenance and product after-sales services, and issues invoices according to customer needs. The e-commerce platform is responsible for providing services such as mall infrastructure operation, overall promotion and data analysis, and collects system software service fees, Internet information service fees, market consulting service fees and other fees from enterprises. Under the B2C model, consumers place orders through the stores set up by the enterprise on the e-commerce platform, pay the payment to the e-commerce platform's capital account, and the enterprise delivers the goods to the customer according to the order information. Offline sales are mainly a distribution model. The enterprise authorizes offline dealers to sell the company's products in the designated area. The company signs a sales contract with the offline dealer, agrees on the supply price, and transports the product to the designated area to complete the handover of the goods according to the order issued by the dealer for each purchase, and the dealer sells it to the terminal by himself. Most of the sales of enterprises to offline dealers are buyout sales.
3. Industry policy
1. Competent departments and regulatory systems
The main functions of the National Development and Reform Commission and its local branches are to formulate industrial policies, study and formulate development plans for the fan industry, guide the structural adjustment of the fan industry, implement industry management, and participate in the system reform, technological progress and technological transformation, quality management and other work of the fan industry. The Ministry of Industry and Information Technology is responsible for formulating industrial development policies, plans and technical standards for the fan industry, and supervising the production, sales and service activities of the industry. Through the formulation of relevant policies and standards, promote the healthy development of the fan industry, and promote technological innovation and industrial upgrading. The State Administration for Market Regulation is responsible for the supervision of the fan market, including product quality supervision, consumer rights protection and market order maintenance. Supervise the quality and safety of electric fan products, crack down on counterfeit and shoddy products, protect the legitimate rights and interests of consumers, and maintain fair competition in the market.
The self-regulatory organization of the fan industry is mainly the China Household Electrical Appliances Association. China Household Electrical Appliances Association is an industry-based, national, non-profit social organization voluntarily composed of manufacturers, spare parts and raw material supporting enterprises in the household appliance industry registered in China, and is a social group legal person, which is subject to the business guidance and supervision and management of the Ministry of Civil Affairs, the State-owned Assets Management Commission of the State Council, the China Light Industry Federation and the registration and management authority of the association. Its main function is to represent the interests of enterprises in the household appliances industry such as electric fans, safeguard the legitimate rights and interests of the industry, reflect the demands of member enterprises, coordinate the relationship between members, standardize the behavior of members, maintain fair competition and market order, provide services for the household appliances industry, members and governments such as electric fans, and promote the healthy development of household appliances such as electric fans.
2. Relevant policies
In recent years, the mainland government has introduced many relevant policies to promote the development of the mainland household appliance industry. For example, the "Opinions on Accelerating the High-quality Development of the Manufacturing Service Industry" proposes to develop recycling and utilization services and improve the recycling system of renewable resources, which will help establish a more efficient circular economy system, provide a stable supply of second-hand materials for the fan industry, reduce the cost of raw materials, and encourage enterprises to adopt more environmentally friendly and sustainable manufacturing methods to further promote the sustainable development of the fan industry. "Notice on Several Measures to Promote the Consumption of Green Smart Household Appliances" pointed out that it is necessary to improve the standards of green smart home appliances, the state has put forward a number of green consumption policies in recent years, green and energy saving has become the future development direction of the home appliance industry, and promote the further upgrading of household appliances such as electric fans, which will promote the technological innovation and development of the fan industry, improve the added value of products, and enhance the competitiveness of the fan industry.
Fourth, the development process
The mainland electric fan industry has gone through four stages, the first stage is the embryonic period from 1915 to 1985, this stage is the exploration stage of the electric fan industry, there is no market guidance in the early stage of industry development, and the product technology update speed is slow. The second stage is the development period from 1986 to 2000, under the influence of positive factors such as reform and opening up, market publicity, and national disposable income, users are more in pursuit of high-quality life, and electric fans have gradually become one of the necessary household appliances. The third stage is the outbreak period from 2001 to 2010, with the impact of factors such as China's accession to the WTO and the transfer of world manufacturing, China's electric fan industry has developed rapidly. The form of electric fan products has also changed. Due to the advantages of low labor costs in Chinese mainland, foreign brands such as Siemens and Samsung have entered the Chinese market, which has intensified competition in the industry. The fourth stage is the mature period since 2011, the production technology of the fan industry is becoming more and more mature, and domestic brands such as Midea and Gree have become leading home appliance enterprises. The formulation of national standards for electric fans has further improved the quality of electric fan products, reduced inferior products in the consumer market, and had good development prospects for the industry. The release of the policy of sending household appliances to the countryside has provided a broader soil for the development of the electric fan industry.
Fifth, industry barriers
1. Technical barriers
With the increasing requirements of consumers for fan performance, energy efficiency and intelligence, technological innovation ability has become the key for enterprises to gain a foothold in the market. The production of electric fans involves technical issues such as motor design, heat dissipation technology, noise control and so on. New entrants need to have the corresponding technology research and development capabilities to ensure that the performance and quality of products can meet industry standards. In addition, as environmental protection and energy conservation requirements become more stringent, companies also need to invest in technological upgrades to meet higher environmental standards.
2. Financial barriers
The production of electric fans involves equipment purchase, raw material procurement, production line construction and other links, which requires a large amount of capital investment. New entrants often face a shortage of funds and find it difficult to form an effective production scale in a short period of time. And it also needs a lot of financial support in marketing, brand building, etc., which is a lot of pressure for enterprises with weak financial strength. In addition, in order to remain competitive, fan manufacturers also need to continuously upgrade technology and innovate products, which also requires continuous financial support.
3. Brand barriers
Brand is one of the important factors in consumers' purchase decisions, and well-known fan brands are often able to attract more consumers. New entrants need to spend a lot of time and money to build their brand image and market recognition. In addition, brand building also requires continuous investment in product quality and after-sales service to win the trust and reputation of consumers. New brands need to invest a lot of resources in brand publicity and promotion to build brand image and reputation, and there is great uncertainty. As a result, branding is also a significant hurdle for new entrants.
4. Channel barriers
Perfect sales channels are very important for fan enterprises, which is related to the sales of products and the acquisition of market share. Sales channels are an important way for enterprises to enter the market, and a good sales channel can help enterprises expand market share and increase sales. However, establishing a stable sales channel requires a long-term and stable relationship between the company and retailers, distributors, and other sales channels. For new entrants, there are greater challenges in terms of sales channel building.
Sixth, the industrial chain
1. Analysis of the industry chain
The upstream of the industrial chain of the fan industry is mainly raw materials and parts, the raw materials are mainly plastics and steel, etc., and the parts are mainly motors. The price fluctuations of raw materials such as plastics and steel will directly affect the production cost of electric fans, and the quality of raw materials also determines the quality of electric fan products. Raw materials are particularly important for fan manufacturers. There are many motor manufacturers in mainland China, and the cost of motors is relatively stable. Technological progress in the electric motor industry can promote the development of the fan industry in the direction of more efficient, energy-saving and intelligent. The middle reaches of the industrial chain are mainly for the production and manufacturing of electric fans. The downstream of the industrial chain is consumers, and the application scenarios include housing, schools, shopping malls, etc. With the pursuit of consumers' pursuit of quality of life and the improvement of environmental awareness, the requirements for the performance, energy efficiency, noise and other aspects of electric fans are also increasing.
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