Recently, the Customs Tariff Commission of the State Council issued an announcement on reducing the import duties on daily consumer goods. The announcement pointed out that since July 1, 2018, the MFN tariff rate of some imported consumer goods was reduced. According to data from the General Administration of Customs, this time The tax products cover 8 categories of daily consumer goods, involving a total of 1449 tax items. Among them, the average tariff rate for import duties on household appliances such as washing machines and refrigerators fell from 20.5% to 8%, a drop of over 60%, involving 98 tax items. , quickly become the focus of discussion in the industry. Will the tax reduction bring substantial concessions to consumers? Will China's home appliance market price system be affected? Does the strategy of foreign brands in China change?
Five tax reductions in five years
Willing to stimulate consumption upgrade
A few days ago, at the briefing session of the State Council on Reducing the Import Tariff of Consumer Goods, the relevant person in charge of the Ministry of Finance stated that since 2015, with the approval of the State Council, China has reduced import tariffs on daily consumer goods four times. In four years, China has lowered the import tariffs on daily consumer goods five times, and the country has drawn back overseas consumption. There is a clear willingness to meet the needs of residents to upgrade consumption. Among them, in the five tax reduction policies in four years, there are two household electrical appliances involved ( Include this). Last time in December 2017, the tax reduction policy involved dozens of household goods tax items, including air conditioners, refrigerators, washing machines, etc. The tax reduction was carried out at a temporary tax rate. , The overall decline is about 40%.
In less than six months, the import tax rate for home appliances was reduced twice in a row, and the decline rate further increased. On the one hand, it shows that the country is committed to implementing the Huimin policy and reduces the extra expenses of residents; on the other hand, it also shows that the consumption upgrade The urgent need of residents for improving the quality of life under the trend.
In recent years, in order to purchase foreign high-quality home appliance products, 'haitao' home appliances have become increasingly common consumer behaviors in the lives of residents. From the perspective of consumers, 'haitao' home appliances tend to have long periods, difficult transfer, and unclear goods. The return process is cumbersome and the overall consumer experience is poor. In addition, at the national level, Haitao’s behavior appears to be consumptive in China, but it actually leaves the tax abroad, which has increased domestic consumption outflow to a certain extent, which is not conducive to domestic consumption. The healthy development of the home appliance market. The reduction in the tax rate on imports of multiple taxation items for home appliances will help attract overseas returns and meet the growing consumer demand of the residents.
The price system has little impact
Or help domestic brands rise quietly
For this tax rate adjustment, consumers are more concerned about how much of a substantial concession can ultimately be brought.
First of all, it should be made clear that the target of this tax rate adjustment is imported household electrical appliances. Professionals have pointed out that the product structure of foreign brands in the Chinese market is broadly divided into two types, namely machine imports and local production, in which the entire machine can enjoy imported products. Due to the tax reduction policy, local production models did not generate import tariffs, so they are not included in this tax reduction.
Secondly, tax reduction is a preferential policy, but there is no compulsion on whether foreign brands will reduce the actual sales price of products. In addition, specific to the policy coverage of products, Guo Meide, vice president of AVC, told China Electronics News. Reporter: 'The foreign brands currently occupying an important position in the Chinese market (white electricity, kitchens and kitchens) have basically achieved localized production and manufacturing, with a ratio of more than 80%. Clearly these products do not include tariffs in their selling price, so products such as ice-washing are reduced. Import tariffs have little effect on end-product prices.'
According to the reporter’s understanding, although some luxury home appliance categories are favored by high-end, elite people, but the body size is too small, Ove Cloud Network data shows that its retail share is still less than 2%. Therefore, although the tariff reduction will be The terminal price of luxury home appliances has a certain impact, but it has little impact on the entire Chinese home appliance market price system.
The proportion of direct imported products in China’s household appliances circulation market has not been high. According to data from the General Administration of Customs and the National Bureau of Statistics, the total number of color TVs imported in 2016 was only 116,500 units, accounting for less than 1% of domestic sales; The number of imported air conditioners is only less than 30,000 units. One phenomenon that cannot be ignored is that in the Chinese home appliance market, domestic brands are recovering their land with a rapid momentum. Refined to the product level, industry online data show that in 2017 China's household air conditioners Production of 143.4997 million units, an increase of 28.7% compared to the same period last year; of which domestic sales of 88.754 million units, an increase of 46.8%, while the domestic sales of TOP10 brands are occupied by domestic brands.
In the ice-washing sector, Sino-Iceon data showed that in 2017, foreign brands of refrigerators accounted for 18% of sales and sales accounted for 29%; in 2017, sales of foreign brands of washing machines accounted for 30%, and sales accounted for 40%. The volume of brands and the proportion of the products are all in a weak position. In addition, domestically-made small home appliances that were once in a weak position have also made great progress in recent years. Zhongyi Kang data shows that based on the e-commerce market, as of April this year, domestic small The proportion of home appliance brands reached 74.4%; in terms of growth rate, the overall market for small household appliances increased by 30.5%, foreign brands increased by 7.9% year-on-year, and domestic brands increased by 40.6%, far exceeding the overall market and foreign brands.
Seize high-end consensus
Forced domestic brand progress
Since the object of this tax reduction policy is foreign investment in home appliances, the attractiveness of these products to consumers will determine the practical significance of this policy. According to the introduction of professionals, imported home appliances have high prices and high quality. Features equal features, forming a great competitive relationship with high-end home appliances in China.
The personage inside the industry pointed out at the same time that today's consumption upgrades have led residents to have higher requirements for quality of life, and that residents are not very sensitive to price. Under the stimulation of consumption upgrade bonuses, seizing high-end areas has become a consensus in the industry. But at the same time, The problem of domestically-priced high-end household electrical appliances 'having high quality for a long time' has long been a problem. Consumers are no longer buying “pseudo high-end” products that rely solely on industrial design, marketing, and other means. Industry insiders predict that this will be accompanied by With the implementation of the second tax reduction policy, the competition in the domestic high-end home appliance market will further intensify.
From a rational point of view, although lowering the tariff cannot directly translate into a sharp drop in the price of imported high-end home appliances, it can increase the competition between imported goods and have an indirect impact on prices. Insiders pointed out that by aggressively expanding imports, imports The types of goods, more brands, and healthy competition among imported goods will help promote the fall in the prices of imported goods, so that consumers will not have to go abroad, and they will be able to buy foreign products of the same quality with the right prices in China.
In addition, opening up imports can push local companies to innovate R&D, increase brand building and improve product quality, thereby increasing the international competitiveness of local high-end home appliances. Zhu Jun, Secretary General of the China Household Electrical Appliances Association, told the China Electronics News: The home appliance industry needs more home appliance companies to enter the market gradually through fair market competition, which is conducive to the healthy development of the industry. 'Predictably, the landing of this tax reduction policy will make major domestic home appliance brands Rethinking the thinking of its own high-end product market, how to use the effective brand power and product power to win the market under the condition that the tariff umbrella has disappeared.
Uncertain activation of emerging categories
Uninterrupted Foreign Investment in China
In recent years, some emerging home appliance categories have gradually entered the public view, among which products such as dishwashers, sweeping robots, and facial cleansers have been promoted to 'Net Red' products. Driven by this tariff cut policy, similar to coffee machines, electric Whether toothbrushes, food machines and other emerging products will usher in the outbreak? Zhou Nan, secretary-general of the Household Electrical Appliances Subcommittee of the China Mechatronics Import & Export Association, told the China Electronics News: 'The demand of Chinese consumers for home appliances has shifted from meeting just-to-need to increasing demand. In terms of quality, but it can't be considered as 'emerging home appliances'. The development of any market segment needs to cater to the actual needs of consumers.
In this regard, industry insiders also pointed out that for some newly-imported home appliances, because the unit price is too high, reducing the tariff policy can indeed play a certain role in stimulating the market. However, if sub-categories want to truly integrate into the Chinese market, they must The Chinese consumer's living habits, consumption levels, and quality needs are based on multiple dimensions. It fully investigates the market environment, and requires the entire household electrical appliance manufacturing industry to be highly involved. In the process of development, it also needs products and consumer demand to be linked in real time.
In recent years, real estate in China has continued unabated, labor costs have increased year by year, prices of home appliance raw materials have continued to rise, and changes in the production environment have allowed foreign brands to invest in and build factories in China. The industry tends to narrow the trend. Whether or not the introduction of this will have a further impact on this issue. On this issue, the reporter wrote a letter to a number of foreign brand managers. They also responded positively to the tax reduction policy.
Among them, the person in charge of Dyson stated that they will fully support China's tariff policy, study the details of the rigorous formulation of future strategies in China, and the responsible person of Boxi Electric Appliances also stated that for the fast-growing Chinese market, Bo Xi’s home appliances will plan to grow according to market demand. Production in China, adhere to the implementation of localization strategy and consumer-oriented development strategy. Insiders pointed out that whether foreign investment in China and its own market has a lot to do with the volume, when the volume is large enough and the entire market is also relatively When mature, will consider whether to expand production.
In addition, the global investment strategy is an important step in the internationalization of the big brands. In the critical period of the current global industrial chain re-division, major companies will clarify market development ideas and comprehensively consider future investment strategies. Tariffs do not affect the strategic planning of foreign brands. The only factor