Domestic Demand to Drive China White Goods Market in 2010 Tweet

Refrigerators, washing machines and air conditioners set to post double-digit increases.

Coming off a better-than-expected performance last year, the China white goods market in 2010 is set for continued expansion, driven by a need for the heavy consumer durables in both the urban and rural sectors of a growing domestic market, according to iSuppli Corp.

Chinese domestic shipments of refrigerators, air conditioners and washing machines are headed for double-digit-percentage increases in 2010, iSuppli projects, buoyed by a generally upbeat market and encouraging government policies. Bucking the widespread malaise afflicting the industry everywhere in the wake of the economic recession, the market in China for white goods—products named for their original white enamel paint finish despite availability now in other colors—had not been impacted as much in 2009 as originally feared.

Among the white goods being tracked, refrigerators will post the highest growth, with shipments reaching 55.9 million units in 2010, up 15.3 percent from 48.5 million in 2009. Air conditioners are second, up 11.6 percent from 57.7 million units to 64.4 million. Washing machines are third, up 10.8 percent from 37.2 million units to 41.2 million.

Growth of white goods in China is continuing this year thanks to the effect of two subsidy programs helping to drive domestic demand. In the Home Appliances to Countryside program, which aims to spur demand in the domestic rural market, rural consumers receive subsidies of up to 13 percent of the purchase price of home appliances. As of February, according to statistics from the Chinese government, sales of appliances to the countryside through this program have reached 37.7 million units, worth a total of 69.3 billion renminbi, or $10.2 billion.

In comparison, the Old for New subsidy program is targeted at stimulating urban consumption, providing subsidies of up to 10 percent for consumers that sell their home appliances in order to purchase new ones. As of February, sales have amounted to 23.2 billion renminbi, or $3.4 billion, in the nine pilot areas where the program is in effect.

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