Summary of Key Points
In the first five months of 2026, the retail sales of China's home appliance market (excluding 3C products such as mobile phones and computers) decreased by 8% year-on-year, entering a phase of "narrow competition" where the market size is shrinking and retailers are competing for a smaller share of the remaining business. This trend is not sudden: the home appliance market reached a peak of 933 billion yuan in 2024, began to decline in 2025 (by 4.3% to 893.2 billion yuan), and continued to show negative growth this year. The reasons for the decline include a slow recovery in the real estate sector, the early consumption of demand due to old-for-new exchange subsidies, and more cautious consumers. However, there are still some categories experiencing growth, such as large-sized TVs and small kitchen appliances. At the same time, new emerging demands have arisen in niche markets such as products for the elderly, single-person households, pet owners, and health and wellness.
I. "Narrow Competition": A Shrinking Market, Stricter Challenges for Retailers
"Narrow competition" simply means that the total sales volume of the home appliance market is decreasing, meaning retailers have to compete for a smaller portion of the money available.
Data Highlights:
- In the first five months of 2026, sales amounted to 325.3 billion yuan, an 8% decrease compared to the same period last year.
- The annual sales in 2025 were nearly 40 billion yuan lower than the peak in 2024.
- Month-by-month trends show a clear decline: sales increased by 4.5% in January due to Spring Festival promotions, but then decreased steadily from February to May (with the largest drop of 12.4%), indicating that demand cooled down significantly after the festival.
This indicates that the era of easy profits is over, and retailers must work harder to maintain their market share—through price cuts, targeted marketing, or focusing on specific customer segments to avoid being eliminated.
II. Why is the Market Shrinking?
There are two main reasons for this trend:
1. Slow Real Estate Recovery: Home appliances are closely tied to housing; when people buy new homes, they need to purchase related products like refrigerators, air conditioners, and washing machines. However, the real estate market has been slow to recover, resulting in fewer new home purchases and thus less demand for home appliances.
2. Early Consumption of Demand due to Old-for-New Subsidies: Previously, the government offered subsidies for exchanging old appliances for new ones (e.g., a few hundred yuan off when replacing an old refrigerator with a new one). As a result, many people who would have bought new appliances this year did so last year, leading to reduced demand this year.
Additionally, consumers are more cautious with their spending; they don't want to replace home appliances unless necessary, further shrinking the market.
III. Which Home Appliance Categories Are Still Growing?
Despite the overall decline, there are five categories showing positive growth:
- Large-Sized TVs: Consumers are buying larger screens (e.g., upgrading from 55-inch to 65-inch or 75-inch TVs). Although the number of units sold may not have increased, higher unit prices led to a 3.1% increase in sales.
- Range Hoods, Gas Stoves, and Disinfection Cabinets: These kitchen appliances are often needed for home renovations or replacements (e.g., when an old range hood breaks down after five to six years of use), with sales increasing by 0.8%-3.9%.
- Small Kitchen Appliances: These products, such as air fryers, health pots, and small blenders, have seen the largest growth (11.6%) due to their affordable prices and practicality. Even cautious consumers are willing to buy them.
Other categories like air conditioners, refrigerators, and washing machines are declining because demand for them is largely saturated; most households already own these appliances, and they are only replaced when they break or need to be updated.
IV. More Cautious Consumers: New Demands in Emerging Niche Markets
Guo Meide notes that the era of easy profits is over, but this does not mean there are no opportunities. New demands are emerging due to changes in population structure and lifestyle:
1. Products for the Elderly: The older generation (born in the 1950s and 1960s) now needs appliances that are easy to use and safe, such as those with large fonts on remote controls and anti-fall features in toilets.
2. Single-Person Households: The number of single-person households is increasing, leading to demand for small, affordable appliances (e.g., washing machines priced around a thousand yuan or smaller refrigerators).
3. Pet Owners: With the growing pet population, products like pet water dispensers, dryers, and automatic feeders have become essential.
4. Health and Wellness: Consumers are paying more attention to their health, leading to the popularity of massage devices, moxibustion devices, and health pots.
Although these niche markets are smaller in scale, they represent new growth opportunities for retailers. By targeting these segments, businesses can survive in the context of a shrinking market.
Conclusion
The home appliance market is currently experiencing overall cooling, but there are still areas of growth. For consumers, buying appliances now may be more advantageous due to frequent promotions. For retailers, the focus needs to shift from simply selling products to addressing specific consumer needs—targeting elderly people, single-person households, and pet owners—to find new sources of revenue.