Total large appliances sales in the U.S. are in the $70M range, and some estimates for China are around $140M for a country with 1.3B inhabitants.

So what do we see when we enter a typical white goods store in China? For instance the Gome store near Daning Road, north of the Shanghai city center, has three (mid-size for Europe, small by U.S. standards) floors of which the ground floor is for mobile telephony as well as laptops (and a few desktops). Despite the gap in income, most products are roughly the same prices as in Western countries. Of course there are several Chinese phone brands, unknown outside China. But all common Western models are to be found here, next to Japanese models.

The typical air conditioning unit in China is the split type with a vertical, floor-standing indoor unit.

On the second floor there are small appliances, air conditioning units and water heaters. There are plenty rice cookers, but also electric pressure cookers and slow cooking pots, and a lot of personal care products. Brands are important: several European and Asian brands have their products grouped together. A popular Chinese product is the soy milk maker, which grinds and cooks soy beans into milk. There are few coffee makers, and few espresso machines.

The second product category on the second floor is airco. Next to the well-known wall-mounted split type, the typical product here is the split type with a vertical, floor-standing indoor unit. One could guess that in the living room of a Chinese apartments there isn’t room for a large ceiling unit and the standard wall-mounted types are too small. As many areas of China have a hot and humid climate, each house has airco and there are about 30 models to choose from. Also, on the second floor are water heaters: compact, gas-powered and force-vented.

The third floor shares spaces for washing, refrigeration and audio-video. In washing, the three main types are the European compact horizontal drum, the Japanese large drum and the Asian top loader. The trend in China is toward the horizontal drum machines. European BSH brands Siemens and Bosch are clearly present, as well as some Italian competitors. There are very few dryers, a few washer-dryer combos and limited dishwashers. In refrigeration, all models are available (top and bottom freezer, SBS, French doors and Japanese-style six doors) but the most dominant type seems to be the three-door bottom freezer, with a zero-degree drawer in the middle (roughly 200 by 60 cm).

In washing, the trend in China is toward the horizontal drum machines.

In cooking, the typical kitchen has a two-burner gas hob (remember the separate rice cooker) without an oven—but it does have a disinfecting cabinet underneath, for dishes and silverware. There is no electrical cooking to been seen in this Chinese appliance store. Additionally, there are microwaves in all sizes and designs, and many of them have fancy displays with graphical gimmicks.

Recently, the Gome electrical retail chain (500-plus stores throughout China) was in the news: its founder Huang Guanyu, one of China’s richest men (about 6B USD) was convicted to 14 years in prison on charges of manipulating the stock market as well as bribery.

In general, when seeing the shop floors, there is much space for European, Korean and Japanese brands, to the expense of Chinese brands as Haier, Midea, Robam and Little Swan. Now of course the situation outside the large cities will be different, but there still seems to be a challenge here. Newspaper China Daily writes about this subject when describing the low domestic-designed market share in the car sales chart.

Despite fast growth in rural areas and secondary cities, the more demanding customers in major cities perceive domestic brands as weak. There is still wide disparity in vehicle quality and durability, partly due to rapid expansion in manufacturing. Next to that, the joint ventures with the likes of GM, Volkswagen and Toyota are able to offer the best workers (engineers as well as floor shop workers) much better working conditions. The newspaper warns the domestic producers that the current focus on price must be adjusted, as consumers will change from price- to product-buyers.