"How hot last year was, how tragic this year was". It is not too much to use this sentence to describe the situation of the small household appliance market. In less than a year, small household appliances have experienced ups and downs from heat to cooling.

Among them, there are external factors that can not be ignored: the outbreak of COVID-19 in 2020, the rise of the home economy, and the catalysis of the live broadcast of the electricity supplier, overdrawing the consumption demand of small household appliances ahead of schedule. This year's decline is just to pay for last year's sales overdraft.

However, such ups and downs also reflect the fragility and immaturity of the market: too much dependence on the external environment and weak pressure resistance. Whether it is epidemic dividend or live traffic, it can only bring short-term benefits, not long-term improvement. For small household appliances with insufficient innovation and low added value, once the freshness fades, they will soon fall out of favor and cannot establish loyalty.

From the perspective of market evolution, this sudden decline may be a baptism of rational growth. Under the heavy setback, we should clearly understand the essence of the problem. Whether to continue the trough or brewing sharp change, the initiative is in our own hands.

Dismal financial results and cooling across the board

This decline is neither a small shock nor an individual phenomenon. But a Waterloo from online to offline, from recruits to veterans, from the capital market to the retail market. In addition, the future situation is still uncertain under many uncertain factors such as economic downturn, contraction of consumption, rise in the price of raw materials, exchange rate fluctuation, cost increase, innovation difficulties and so on.

The most representative in the capital market is "the first share of creative small household appliances" Xiaoxiong electric appliance, which has been going downhill for a year. With the relief of the epidemic, the performance growth of Xiaoxiong electric began to slow down in the fourth quarter of 2020, continued to decline in the first half of 2021, and showed no signs of improvement in the third quarter. According to the financial report, in the first three quarters of 2021, Xiaoxiong electric realized an operating revenue of 2.365 billion yuan, a year-on-year decrease of 5.32%; The net profit attributable to the parent company was 189 million yuan, down 41.29% from last year.

At the same time, the cash flow of Xiaoxiong electric appliance also began to be urgent. According to the financial report, the operating cash flow per share of Xiaoxiong electric appliance changed from positive to negative in 2021. It was -0.2 yuan per share in the first quarter and sharply decreased to -1.79 yuan per share in the interim report. Although it improved slightly in the third quarter, it was only -1.71 yuan per share. In other words, bear home appliances almost lost money in the first three quarters of this year.

The unsatisfactory performance has caused the share price of Xiaoxiong electric appliance to fall one after another. As of the third quarter of this year, the share price of Xiaoxiong electric appliance has fallen by more than 70% compared with the peak value of last year, and the total market value has evaporated by more than 18 billion yuan. Xinbao shares, which is well-known by "net red" moffy, are no longer popular. The share price returns to a year ago. The financial report shows that the net profit of Xinbao shares in the first three quarters of this year decreased by 34.63% year-on-year, and the net cash flow from operating activities was - 56.83 million yuan, a year-on-year decrease of 104%. The cash flow is under obvious pressure.

In the consumption dilemma of falling demand, industry veterans are also facing profit pressure. According to the financial report, the net cash flow from operating activities of Jiuyang shares in the first three quarters was - 460 million yuan, a year-on-year decrease of 154.97%; SUPOR's performance this year seems strong, but in fact it is only a performance of stabilization. Last year's performance was dismal. Whether it is the catch-up of emerging enterprises, the intensification of market competition, or the continuous impact of rising prices of raw materials, it will lead to the decline of gross profit margin.

Third party data also confirmed the overall cooling of the market. According to AVC's Omni channel promotion data, from January to September 2021, the retail sales of small kitchen appliances (electric rice cooker, induction cooker, electric pressure cooker, soybean milk machine, wall breaking machine, mixer, juicer, electric kettle, frying machine, electric steaming stew pot, health pot and desktop) totaled RMB 41.93 billion, a year-on-year decrease of 12.2%; The retail volume was 182.868 million units, a year-on-year decrease of 10.6%. Among them, online sales turned negative for the first time, and the scale of offline channels was halved. The whole line of online and offline sales volume fell, and the difficulty of operation can be seen.

Return to rationality and restore normality

In essence, small household appliances have entered the initial stage of saturation since 2019, and the market growth began to be weak. The hot sales in 2020 is only an unexpected prosperity stimulated by accident. After excessive consumption, it is inevitable and normal to return to weakness in 2021.

As early as last October, Xiaoxiong electric appliance had this prediction: "2020 is an abnormal year. On the basis of this high base, it is a certain challenge for the performance of small household appliances to maintain high growth in 2021, and returning to normal growth is a high probability event."

Indeed, the difficulties of small household appliances are not cold in a day. Tianji shares, which started with small household appliances, has now crossed into the field of lithium batteries. Its old main business, small household appliances, saw a year-on-year decline of 15.15% in the first half of this year, and has reported negative growth for the third consecutive year. After the setback in the transformation of small kitchen appliance business, Ashtar opened up a third business - robot. St Dehao also said that the small household appliance business is at a loss and is difficult to reverse in the short term. It will give up or sell bread machines and other businesses.

Shrinking the front and even being forced out are related to the small household appliance industry entering the era of stock competition and the gradual reduction of market space. On the other hand, the endogenous problems of small household appliances, such as low technical threshold, serious homogenization and chaotic price war, have also existed all the time, leading to the problems of weak scientific and technological strength, weak competitiveness and unstable basic market.

This is once again confirmed by the flash drop like a "roller coaster". When the enthusiasm of consumers subsided, the small household appliance industry was quickly "beaten back to its original shape". Without the precipitation of quality and technology, it could only gain false prosperity.

Therefore, in the process of the normalization of the industry in the post epidemic era, small household appliance enterprises also need to return to the rational development track, based on the products themselves, actively cultivate their internal skills, and truly establish technical barriers and word-of-mouth moat, so as to find new growth points and more solid advantages in the crowded track of small household appliances and the stage of scouring the sand in the industry.