Chinese appliance manufacturers are increasing in Japan. Hisense Group opened an R&D center in Japan and began selling its own products. In Japan, Chinese home appliances used to focus only on low prices, but now they manufacture products for young people who are relatively weak in Japanese manufacturers, thus opening a hole in the monopoly market, and their products have begun to be placed in prominent positions in Japanese mass retailers.
In Kawasaki City, Hisense Japan’s headquarters, home appliances are neatly arranged. In addition to TVs, air conditioners, and large refrigerators, the Chinese head office displays the laser-using projector “Laser TV” at the 2022 American home appliance exhibition “CES.”
Hisense has targeted TVs, refrigerators, washing machines, and air conditioners as Japanese manufacturers sell their home appliance businesses. Some consumers said, “Since the refrigerator is from Hisense, so should the TV.”
Japan will launch front-loading washers.
Market share reflects Hisense’s presence. Hisense’s TV sales share in Japan is 12.9% in 2021, ranking 5th (Euromonitor International survey data). It’s 9 points behind No. 1 Sharp. Hisense had 2.4% in 2017.
Li Wenli, President of Hisense Japan, said that Japan is the most demanding market in the world for quality, and development that meets Japanese standards and global-scale procurement and production are perfectly combined. Hisense has expanded its business beyond China, built a low-cost parts procurement and production network, and provided low-cost products.
Hisense has improved its products’ functionality and quality while maintaining its advantage. In 2018, the company acquired TVS REGZA to develop an imaging engine. Hisense’s image quality meets Japanese standards, and REGZA’s procurement network cut costs. In addition to “Toshiba” TVs, the share of the Hisense brand is also increasing.
Hisense opened a “Advanced Development Technology Center” in 2021 to develop Japanese-standard white goods. The Japanese-standard air conditioner with ventilation function and heat exchanger cleaning function has been launched. Despite having more features, the price is 40% less than Japanese equivalents. Li Wenli said she’s still considering a front-loading Japanese washing machine.
Hisense’s focus on Japan isn’t just to increase sales. President Li Wenli said Hisense Group’s quality has been improved to meet Japanese standards. Japanese companies are small in Hisense’s global sales, but they’re important to the group overall.
Hisense Japan proposed equipping its own products with IoT functions and connecting home appliances to the network. Japanese manufacturers have advocated for this service, but no company has led.
“Chinese manufacturers can provide more advanced networking and AI functions than large Japanese companies,” says Euromonitor International analyst Taro Yamato. Chinese manufacturers have launched refrigerators that recommend recipes based on their ingredients and washing machines that match clothes. Japanese home appliances are mature, but they still introduce epoch-making features.
Second-place projector share
Chinese manufacturers in Japan offer unique products, and their influence grows. Anker sells “Nebula” in Japan. Android TV supports major video delivery services.
According to the survey company BCN (Chiyoda-ku, Tokyo), the Japanese share of Anker projectors will be 14.8% in 2021, ranking second, and the ranking has risen sharply from the third place in the previous year. Young people who don’t watch TV support large-screen movie viewing.
Xiaomi and Huawei Technologies have made great strides in the smartwatch market, where Apple dominates in the U.S. and Japanese companies are scarce. Huawei’s smartwatch is equipped with a battery that can be used even without charging for 2 weeks. “Apple Watch Ultra” standby time is 36 hours.
Despite China’s rise, product adoption is still difficult. “Japan’s domestic beliefs are deeply rooted in elderly and high-end white goods,” said Euromonitor analyst Taro Yamato. Sometimes, even if the function is not inferior, Chinese products are excluded from the purchase choice.
Japanese consumers may mind that Hisense’s IoT home appliances are processed by overseas companies. Japanese manufacturers face challenges in product quality and brand building.
Japanese home appliances need to change the stage
From the perspective of domestic sales share in Japan, Chinese home appliance companies have grown rapidly, but Japanese companies are still in the forefront. Japanese manufacturers have turned to high-value-added products in response to low-cost, high-function Chinese products. Most people believe hardware improvements will catch up eventually, but there are limits.
White goods, which are daily necessities, benefit from an aging population and increasing demand for dual-earner households. High-unit price models are increasing, and the supply of white goods has been maintained despite Japan’s population decline. White goods supply will reach 2.5214 trillion yen in 2021, up from 2.2116 trillion yen in 2000, according to JEMA.
Japanese companies focus on high-unit-price appliances. The rice cooker, for example, adjusts the firepower based on the rice brand and promotes partnerships with well-known Japanese restaurants. Large fridges and front-loading washers are selling well.
Due to Japanese manufacturers’ focus on expensive models, popularity is declining, especially among young people. According to a 2021 survey by Panasonic Holdings, only 53% of 20-somethings “know the Panasonic brand,” a 29% drop from 2016. Chinese companies are sweeping the field of low-priced products, joining Japanese manufacturers who no longer make products like smartphones. Large Japanese electronics companies have long attracted the attention of manufacturers.
Japan’s emerging home appliance company Balmuda is boosting its presence with different product manufacturing. The oven aims for bread baking excellence and has a simple design, but more than 1.5 million units have been sold by 2021. In September 2022, additional functions and a 30,000-yen model were released.
If consumer demand is exceeded, “continuous innovation” that improves functions will occur. Once simple, easy-to-use products are released, consumers will flock to them.
Integrating network services is one way to improve convenience without sacrificing product performance. Sony is currently combining the home appliance and game console fields with music and movies to generate revenue.
The Japan Electrical Machinery Industry Association proposed a subscription service for Japanese-funded appliance companies in 2022. Aiming at the young class and renters, etc., it collects and analyzes the use of consumers’ home appliances through the Internet, and envisages a business that advises companies to switch to necessary home appliances. Japanese home appliance manufacturers must change the playing field to compete with Chinese firms.