Sellers entered the 200 billion market and it exploded!

In recent years, the prevalence of the stay-at-home economy has led to a surge in demand for small household appliances worldwide. Small household appliances have become the new favorite of consumers nowadays, and a single product worth only a few hundred yuan can leverage a market worth hundreds of billions!

According to research data from Statista, the global market size of small household appliances will be approximately US$243 billion in 2023, and it is expected that this market will reach US$305 billion by 2028.

At present, small household appliances have become an important export category of China's cross-border e-commerce. Many domestic sellers have emerged in related fields and have become popular in overseas markets.

Small home appliances are selling like hot cakes in overseas markets

The cross-border companies that are currently performing relatively well in the small home appliance market include Chenbei Technology, Xinbao Holdings, Bear Electric Appliances and Douhe Technology.

1. Chenbei Technology, a leading company in the small home appliance industry, was founded in 2013 and is headquartered in Shenzhen. The company focuses on the design and development of small home appliances and smart home products, and its products mainly cover kitchen appliances, living environment, health monitoring and other fields. Its products are sold to more than 100 countries and regions including the United States, Canada, the United Kingdom, Germany, etc., and have a high reputation in the global market.

The company currently has three core brands ( Etekcity, Levoit and Cosori), which cover almost all small home appliance categories on the market. Among them, Etekcity mainly sells smart small home appliances, health monitoring equipment and other products; Levoit mainly focuses on home environment appliances; and Cosori pays more attention to kitchen appliances and dining utensils.

In 2023, Chenbei Technology performed very well in overseas markets. Levoit took the lead in the US market, and Etekcity and Cosori products ranked first in sales. Among them, Amazon business contributed US$457 million in revenue, accounting for 78% of total turnover.

In addition to Amazon, Morning North Technology has already developed platforms such as Walmart, Rakuten, Home Depot, Wayfair, Home Depot, and entered multiple chain retailers. In addition, the company also attaches great importance to the layout of the official website of the independent station, and promotes its independent station through social media promotions of different styles.

It is worth mentioning that as of December 31, 2023, Morning North Technology has more than 1.1 million fans on major overseas social media (Facebook, X, YouTube, etc.).

2. Xinbao Co., Ltd., another leading enterprise in the small household appliance industry, was established in 1995 and is one of the earliest enterprises in China to engage in the design, development, production and sales of small household appliances. The company is headquartered in Foshan, Guangdong, and focuses on the development, design, manufacturing and sales of small household appliances in multiple categories, including kitchen appliances, home care appliances, baby appliances, refrigeration appliances, personal care and beauty appliances, etc.

After more than 20 years of development, the company has established long-term strategic partnerships with many well-known global brands such as Smeg, Unilever, WMF, STARBUCKS, etc. Its products are sold to more than 100 countries and regions around the world. It is hailed by the media as the "hidden champion of small household appliance exports."

Xinbao's export business is mainly carried out in OEM/ODM mode. In 2023, the company's overseas operating income reached 10.812 billion yuan, an increase of 11.08% compared with the same period in 2022. Overseas revenue contributed 73.82% of Xinbao's revenue. The overseas market has obviously become an important part of Xinbao's business growth.

3. Speaking of Bear Electric Appliances, I believe everyone is familiar with it. The company was established in Foshan, Guangdong in March 2006, specializing in the research and development, design, production and sales of creative small home appliances, specifically small kitchen appliances, small household appliances and other small appliances.

In the past, Bear Electric's overseas business was mainly ODM, but now it is mainly independent brand overseas and cross-border e-commerce business. According to OEM business, C-end independent brand business, and different target markets, Bear Electric adopts a variety of marketing channels such as independent websites, cross-border platforms, and dealers.

Among them, the sales areas of independent brands are mainly concentrated in Southeast Asia and the Chinese markets in Europe and the United States.

In 2023, Bear Electric Appliances' overseas business achieved new breakthroughs, with overseas sales revenue increasing by 105.66% year-on-year.

In early February 2024, Bear Electric Appliances established Foshan Bear Yousetuo Cross-border E-commerce Co., Ltd. and Foshan Bear Cross-border E-commerce Co., Ltd., with a registered capital of 1 million yuan each, focusing on cross-border e-commerce business.

4. Another company, Douhe Technology, was established in Foshan, Guangdong in 2014. Its main business is the research and development, production and sales of small environmental appliances and small kitchen appliances. Its products include air purifiers, dehumidifiers, heaters, ice makers and other categories.

At the beginning of the company's establishment, it only focused on product design. In 2016, Douhe Technology launched mosquito repellent products, built its own supply chain, and expanded its small home appliance OEM business.

After years of development, Douhe Technology now owns domestic and foreign brands such as Xiaohe, Douhe DOUHE, Flashvin, Kloudic, ALROCKET, AUZKIN, and also operates internationally renowned brands such as Whirlpool, and has fully realized independent design, research and development, and self-production and sales of products.

Currently, sales of Douhe Technology’s own brands account for 90% of its total revenue, mainly from the Amazon platform.

In the first year of sales of Douhe Technology's core product air purifier on the Amazon platform, it achieved nearly 100 million yuan in revenue, and the single product ranking on Amazon jumped to second place; subsequently, the semiconductor dehumidifier it launched became the number one on Amazon's BS list.

From 2019 to 2023, the compound annual growth rate of Douhe Technology's overseas business revenue exceeded 90%. The overseas revenue in 2023 is about 1 billion yuan.

Top sellers are favored by the capital market! They are competing for financing and listing

As the leading companies in the small home appliance sector have been making great strides, they have also gained the favor of the capital market.

1. Morning North Technology

On December 9, 2020, VeSync, the parent company of Shenzhen MorningNorth Technology, began its public offering in Hong Kong, planning to issue 281 million shares with an offering price of HK$4.68-5.52.

The prospectus disclosed that 30% of the funds raised will be used to develop new products and update existing products; 25% will be used to expand sales channels and geographical coverage; 25% will be used to upgrade the VeSync application to the Internet of Things platform; 10% will be used to develop and launch smart solutions; and the remaining 10% will be used as working capital.

On December 18, 2020, VeSync, the parent company of Shenzhen MorningNorth Technology, officially landed on the Hong Kong Stock Exchange with an issue price of HK$5.52. The company's Hong Kong public offering was subscribed 538 times, with a market value of HK$11.7 billion.

Vesync's global issuance of shares this time is 281 million shares, raising approximately HK$1.55 billion.

The stock price finally rose by more than 50% on the opening day, and Vesync also received subscriptions from well-known cornerstone investors including Hillhouse Capital and Orchid China.

2. Xinbao Shares

In 2006, Xinbao completed its transformation into a joint-stock company and was renamed "Guangdong Xinbao Electric Appliance Co., Ltd."

On January 21, 2014, Xinbao Co., Ltd. was listed on the Shenzhen Stock Exchange's main board A shares with the stock code 002705 and a total amount of funds raised of RMB 798 million.

On March 23, 2017, Xinbao Co., Ltd. completed a private placement for an undisclosed amount, and the investor was Hualong Securities.

On March 31, 2018, Xinbao Co., Ltd. completed a private placement with an undisclosed amount. The investors were China Huijin Investment and Soho Investment Group.

On July 2, 2021, Xinbao Co., Ltd. completed a private placement for an undisclosed amount, and the investor was Greenland Group.

3. Bear Electric

Unlike other companies, during the process of Bear Electric's revenue growing from 0 to 1 billion, the company did not conduct any round of external financing. It mainly relied on retained funds for endogenous growth. The equity structure was basically the same as when the company was founded. The original shareholders contributed to each of the company's capital increase and share expansion.

On August 23, 2019, Bear Electric Appliances successfully landed on the Shenzhen Stock Exchange, becoming the first creative small home appliance stock. The number of shares issued this time was 30 million, the issue price was 34.25 yuan per share, the total amount of funds raised was 1.028 billion yuan, and the net amount of funds raised was 937 million yuan. The opening price on the first day was 41.10 yuan per share, an increase of 20%, and the market value exceeded 5 billion yuan.

After going public, the company's market value soared.

In July 2020, Bear Electric Appliances reached its peak market value, with its stock price soaring to 163.31 yuan per share and a market value of more than 25 billion yuan.

4. Douhe Technology

Just last month, Douhe Technology received hundreds of millions of yuan in strategic financing, led by Zhuoshi Capital and Lion City Capital; followed by Chuanggu Capital and Changtou Holding Group's Blue Moon Valley Fund, with Weizhen Capital serving as the exclusive financial advisor.

This round of funds will be used for the company's brand building, product research and development, supply chain upgrades and information construction.

As of now, Douhe Technology has completed five rounds of financing, with investors including Hongzhang Capital, Weizhen Capital, Yunsong Investment, Lion City Capital, etc.

On February 28, 2022, Douhe Technology completed a nearly 100 million yuan Series A financing round, with investors including Hongzhang Capital and Weizhen Capital.

On August 20, 2023, Douhe Technology completed a nearly 100 million yuan Series B financing, with Zhuoshi Capital as the investor.

On November 20, 2023, Douhe Technology completed its B+ round of financing. The amount of financing was not disclosed and the investor was Lion City Capital.

On March 8, 2024, Douhe Technology completed its B++ round of financing. The amount of financing was not disclosed. The investors were Lion City Capital, Yunsong Investment and Changsha Industrial Investment Group.

The revenue of many leading companies has accelerated

With the help of capital and high market demand, the revenue of these leading companies is also growing rapidly.

1. Morning North Technology

In recent years, Chenbei Technology's revenue has maintained a rapid growth trend.

In 2022, Morning North Technology achieved operating revenue of US$490 million, an increase of 7.95% over the previous year.

In 2023, Morning North Technology's annual revenue reached US$585 million (approximately RMB 4.239 billion), and its gross profit was approximately US$274 million, an increase of 19% and 93% respectively over 2022. The gross profit margin was approximately 46.9%, an increase of approximately 18 percentage points from 2022 (approximately 29.0%).

In terms of net profit, Chenbei has turned losses into profits. In 2022, it lost $16.27 million, but last year it made a net profit of $77.48 million (equivalent to RMB 560 million), reaching its highest level in history.

The rapid growth of Chenbei Technology's performance is mainly due to three factors:

The first is product innovation. Chenbei Technology attaches great importance to product innovation and invests a lot of money in product research and development every year. The company has established full-process quality control from product research and development, technology and performance testing, supplier quality management, manufacturing process control, product delivery quality inspection and after-sales technical support and other business areas to achieve an end-to-end closed loop.

Secondly, brand marketing. Chenbei Technology continues to focus on brand building, actively participates in brand marketing activities, and promotes its brand overseas.

The third aspect is channel construction. In 2023, Morning North Technology will continue to develop offline channels and increase the number of products and stores in mainstream retailers. In 2023, products will be sold in about 11,000 stores in the North American market ; about 2,400 stores in the European market, including more than 20 countries or regions such as Northern Europe, Spain, Hungary, and Germany; and more than 1,400 stores in the Asia-Pacific market , including Singapore, Malaysia, Thailand, Japan, and the Middle East . Compared with most big sellers, Morning North Technology's offline channels are particularly wide.

Another very crucial point is that Morning North Technology is intentionally reducing its dependence on Amazon.

The 2023 financial report shows that Morning North Technology's sales performance in non-Amazon channels has been greatly improved. Last year, its non-Amazon channel revenue was US$129 million, while in 2022 it was only US$79.44 million, an increase of 61.2%.

2. Xinbao Shares

In 2023, Xinbao Co., Ltd. achieved operating income of 14.647 billion yuan and net profit attributable to shareholders of the parent company reached 977 million yuan.

It is worth mentioning that the company's overseas operating income reached 10.812 billion yuan in 2023, an increase of 11.08% compared with the same period in 2022, and domestic operating income reached 3.836 billion yuan.

Xinbao Co., Ltd. stated that the reason for the rapid improvement in performance in 2023 was that the company restored the profitability of its products and enhanced the company's overall competitiveness through measures such as technological innovation and improving production efficiency.

Relevant institutions in the industry analyzed that as domestic small household appliance companies transform and go overseas, driven by high overseas demand, related companies are expected to expand the width and depth of overseas channel penetration and optimize profit levels. Xinbao Co., Ltd. has seized the market opportunity.

3. Bear Electric

From 2007 to 2009, Bear Electric Appliances' sales grew at an average rate of more than 100%.

In 2007, Bear Electric Appliances' annual revenue was only about 20 million yuan, which doubled to more than 80 million yuan in 2009.

By 2016, Bear Electric's annual revenue had exceeded 1 billion yuan. Two years later, Bear Electric's online sales revenue exceeded 1.8 billion yuan, and the total revenue for the year reached 2.041 billion yuan.

Today, Bear Electric Appliances’ annual revenue has increased from 2.041 billion yuan to 4.703 billion yuan, doubling again.

The success of Bear Electric Appliances is inseparable from its long-term investment in scientific research.

The small home appliance market is highly competitive, and product innovation is crucial. Therefore, Bear Electric has been continuously increasing its R&D investment.

From 2016 to 2020, Bear Electric's R&D expenses increased from 16.5333 million yuan to 105 million yuan, a 5.35-fold increase in 5 years. In 2021 and 2022, Bear Electric's R&D expenses were 130 million yuan and 137 million yuan respectively, also maintaining a steady growth. In the first three quarters of 2023, Bear Electric's R&D expenses reached 106 million yuan, a year-on-year increase of 11.74%.

Over the years, Bear Electric has focused on product innovation to meet consumers' innovative needs. It has continuously launched new products for different scenarios, such as single-person rice cookers for single consumers, outdoor power supplies and outdoor fans for outdoor camping, multi-functional milk mixers for mothers, and cat water dispensers for pets. Bear Electric currently has more than 60 product categories and more than 500 product models.

In addition to continuous efforts in technology, Bear Electric also pays great attention to product design. In order to attract young consumers and provide them with creative small household appliances, Bear Electric has formed a 10+ design team. Through in-depth cooperation with external parties and linking global design resources, Bear Electric innovates product design based on consumers' pain points. In response to the segmented needs of young people, Bear Electric integrates product aesthetics, functions, and experience, making the products more compact and easier to use.

4. Douhe Technology

In 2022, Douhe Technology's revenue reached 285 million yuan, of which overseas markets accounted for a large proportion.

In 2023, Douhe Technology's revenue was approximately 1 billion yuan.

According to official data, Douhe Technology's overseas business revenue will grow at a compound annual growth rate of more than 90% from 2019 to 2023. As of now, the annual output value of Douhe Technology's factory can reach nearly 2 billion yuan.

Driven by the company's full industrial chain and multi-brand coordinated development, Douhe Technology's performance has improved rapidly.

Douhe Technology has been deeply engaged in the small household appliance supply chain for a long time. Through the operation model of the entire industrial chain, it has effectively improved the profitability of small household appliances and has certain advantages in the market.

On the other hand, Douhe Technology also attaches great importance to product research and development. The company has a design and development team with more than 15 years of experience, has developed more than 300 technical patents, and its products are 100% self-developed, with the ability to integrate research, production and sales. In addition, Douhe Technology's annual R&D expenses account for more than 4% of its annual sales.

Small home appliances have great potential in overseas markets

In recent years, the prevalence of the stay-at-home economy has led to a surge in demand for small household appliances, which are favored by overseas consumers because of their convenience and compatibility with modern lifestyles.

In the wave of globalization, the development of China's small household appliance industry has shown vigorous vitality.

Moreover, as an important production base for small household appliances in the world, China has considerable advantages. China has formed advanced small household appliance manufacturing capabilities, a complete small household appliance industry chain cluster and an efficient small household appliance industry supply chain.

From the perspective of regional distribution, small household appliance industry chain enterprises are mainly distributed in Guangdong Province and the eastern coastal areas, including Fujian, Zhejiang, Anhui, Shanghai, Jiangsu and Shandong. These industry chain enterprises have already undertaken major global small household appliance orders.

Relying on the strong domestic supply chain system, small household appliance companies can quickly respond to market demand, provide cost-effective products, and occupy an advantageous position in the fierce global market competition.

According to data from the United Nations, China is the largest import supplier of electric ovens, electric coffee machines, electric kettles, toasters and juicers to the United States, Britain, Germany and France, and has a considerable gap with the second-ranked supplier.

In recent years, while building their brands, Chinese small home appliance companies have continuously improved their international market visibility and brand influence by creating high-quality, high-value-added products. In addition, they are also further increasing their R&D investment and launching innovative products with independent intellectual property rights to meet the diverse needs of overseas consumers and enhance the competitiveness of their own products.

Compared with large home appliances, the small home appliance industry has multiple advantages, such as low investment and fast growth, which is very suitable for sellers who want to open up new tracks.

For sellers who want to enter the market, it is necessary to understand the needs and shopping habits of overseas consumers and master the traffic code.

According to the latest survey data from GlobalWebIndex, the consumer groups that purchase small household appliances overseas are mostly young consumers of Generation Z and Millennials, and their main channels for learning about new products are search engines and KOL marketing.

At the same time, sellers must also conduct sufficient market analysis and pay attention to the profitability of product categories in order to better grasp market trends and seize business opportunities.

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