BDA-中國(guó)白色家電市場(chǎng)洞察研究EN-20150720

BDAStudyonWhiteGoodsMarket2015/7/17ForTigerGlobal?BDA2015SummaryofACIndustryCompanyPerformance2GreeMideaHaierCMM1ChinaIOL1BDAChannelCheck3InventoryStressMostsevereLeastsevere1H201514%1H2015-3%2Q20151H20150%-5%ACY2015-10%-0%2Q2015-20%1H2015-15%ACY2015-10%Note:1.1H2015representsforthefivemonthsfromJantoMay2015;2.ACYreferstothe“AirConditionerYear”,fromAugust2014toJuly2015,whichiswidelyusedinACindustry;3.Gree’sYoYsalesgrowthreflectstheperformanceofprovincialbranches,whiletheYoYofMideaandHaierreflectsell-inperformance.2Q2015-20%1H2015ACY20151H20157%1H20151%1H2015-4%1H2015-2%n/aSummaryofRefrigerator,WashingMachineandSmallApplianceIndustryCompanyPerformance3MideaHaierCMM1ChinaIOL1BDAChannelCheck2Note:1..1H2015representsforthefivemonthsfromJantoMay2015;;2.theyoydatarepresentforthesellinperformanceRefrigeratorMideaHaierWashingMachineMideaSmallHomeAppliance1%15%5-10%20-30%1-5%5%1H2015

YoYComparison-5%-3%-4%n/a5%20%n/a-7%16%4TableofContentsAirConditioner(AC)Companiesmisssalestargets1H2015RefrigeratorWashingMachineSmallHomeApplianceAppendix5RetailingsalesofACdeclinedby-9%in1H20151,whilethegrowthoftotalsell-involumeincreasedby3%,indicatingtheriseupofchannelinventory2Q1511%1Q1411%4Q133Q132Q131Q13-9%11H20132H20131H20142H2014Jan-May20151-10%4%-16%11Q152%4Q1420%3Q14-11%2Q14YoY3%11Q132Q1516%11Q150%4Q142%3Q146%2Q1419%1Q1423%4Q133Q132Q131H20132H20131H20142H2014Jan-May2015121%384%YoYDomesticRetailingSalesVolume(Unit：MN)DomesticSell-inVolume(Unit：MN)Note：1.The2Q15and1H2015datadidn’tincludethesalesperformancesinJune,soBDAusertheYoYgrowthrateofAprilandMayinstead.Source:CMM,ChinaIOL6TableofContentsAirConditioner(AC)FlatsalesofGreeinACY2015,butwithhighinventorylevelRefrigeratorWashingMachineSmallHomeApplianceAppendixGree’sACsalesvolumegrewonly1%in1H2015…7Jan-May201511%12H20145%1H201416%2H20131H20132Q1517%11Q15-4%16%1Q1416%4Q133Q132Q131Q134%7%2Q144Q143Q14YoYGrowthUnit：MNGreeAC

DomesticSell-inVolumeSource:ChinaIOLNote：1.The2Q15and1H2015datadidn’tincludethesalesperformancesinJune,soBDAusertheYoYgrowthrateofAprilandMayinstead.…whichisconsistentwithourchannelcheckfindings8GreeShengshiXinxing1ACSalesPerformanceinKeyRegions

RegionUnit2014ACY2015ACY2TargetEstimateLowSeason2Q2015Sell-inSalesAmount

TotalRMBMN57,10065,65059,17037,31013,806

GuangdongRMBMN12,00014,00014,0008,4004,200

HenanRMBMN12,00014,00014,0008,0003,200

JiangsuRMBMN8,5009,3507,4806,000561

AnhuiRMBMN8,0009,6008,0004,4003,080

ZhejiangRMBMN6,6007,3005,8405,110365

ShandongRMBMN5,5006,0005,0002,6001,300

SichuanRMBMN4,5005,4004,8502,8001,100YoYGrowthRate

Total%n/a

15%1%5%~-20%

Guangdong%n/a17%17%17%17%

Henan%n/a17%17%14%-16%

Jiangsu%n/a10%-12%1%-67%

Anhui%n/a20%0%0%0%

Zhejiang%n/a11%-12%3%-68%

Shandong%n/a9%-9%-21%-21%

Sichuan%n/a20%8%-3%-4%UnlikelytoachieveannualsalestargetSluggishsalesgrowthin2015ACYinmostregionsThankstothehotsummerandrecoveryofrealestatemarket,Guangdongregionmaintainedarelativelyhighgrowth;ThebranchofHenanprovinceoptimisticallyexpectedtoachievesalestargetdespitesharpdeclineinJuneDistributorswerereluctanttopurchasemoreproductsduetotheunhealthyinventorystatusandhighcapitalpressure,asaresult,thesalesin2QdroppedalotSource:BDAinterviewandanalysis“TheprocurementtargetforACY2015wasRMB260MN,buttheactualprocurementisonlyRMB180MNbylateJune,withinventoryofRMB80MN.Wewon’tpurchasemoreuntiltheretailsalesgetbetter.”——OnedistributorfromZhejiang“Wewouldprefertomakelessmoneyandgetlessrebate,ratherthanpurchasemoreproducts

(formorerebates)…ourstrategyforthefollowingACYmainlydependsonthesalesperformanceinthesummer(JulandAug)”——OnedistributorfromAnhuiNotes：1.Gree’sprovincialsalesanddistributionaremanagedbyitsprovincialsalescompanies,ShengshiXinxing(“盛世欣興”);Greehas28provincialsalescompaniesnationwideexceptforGuangdong,whichhassixsalescompanieslocatedinGuangzhou,Shenzhen,Foshan,Zhuhai,DongguanandYuedong.GreeengineeringACsshowedthesimilarstagnantgrowthtrend;whilecentralACsgrewrapidlybutthesalesscaleisstillprettysmall9Source：BDAinterviewandanalysisSalesPerformancesofGreeEngineeringACACYear

Unit20142015Est.YoYGuangdong

GuangzhouRMBMN9231,20030%

ShenzhenRMBMN41848015%

FoshanRMBMN49565031%AnhuiRMBMN1,6001,6000%ZhejiangRMBMN1,8151,506-17%JiangsuRMBMN1,7001,496-12%SichuanRMBMN1,2381,45518%ShandongRMBMN693640-8%SubtotalRMBMN8,8829,0272%SalesPerformancesofGreeCentralACACYear

Unit20142015Est.YoYGuangdong

GuangzhouRMBMN300230-23%

ShenzhenRMBMN31945041%

FoshanRMBMN13020054%AnhuiRMBMN500n/aHighgrowthZhejiangRMBMN1,8002,70050%JiangsuRMBMN3,3504,00019%SichuanRMBMN350700100%SubtotalRMBMN6,7498,28023%EngineeringACexperiencedsluggishgrowthinACY2015Sell-inpricesofengineeringACsusuallyhave20-30%discountscomparedwithretailsalesmodelsgivenitsone-timelargeprocurementamountTheengineeringACaccountsfor~20%and~30%ofGreesalescompanies’sell-invalandvolrespectively;theproportionwasrelativelystableduringthepasttwoyearsindicatingthatengineeringACsalsosufferedfromthesluggishrealestatemarketlikeretailACsHugegrowthofCentralACwhileitssalesbaseisstillsmall,long-termpotentialsforGreetotakeshareinthefutureOppositetoretailhomemadeACs,centralmachinemarkethaswitnessedlargegrowthinthepastfewyears;Greeleadedinthegrowthgivenitsstrongbrandinginfluenceandtechniquecatch-upwithforeignbrands“ProportionofcentralACsaleshassteadilyincreasedfrom12-13%to15%ofourtotalsales.Moreandmorecustomersupgradetheirwall-hangingACswithcentralmachines.WeleadinthisconsumptionupgradingtrendgivenouraccumulatedbrandinfluenceinotherAClinesandsometechniqueimprovementtoeatthepreviousforeignbrands’marketshares.”——industryexpertGree’sinventorystatushasn’tbeenimprovedin1H20151005/1504/1503/1502/1501/1512/1411/1410/1409/1408/1407/1406/1405/1404/1403/1402/1401/14ChinaIOLChinaMarketMonitor05/1504/1503/1502/1501/1512/1411/1410/1409/1408/1407/1406/1405/1404/1403/1402/1401/14RetailandSell-inSalesVolumeGrowth,Jan2014–May20151GrowthGapbetweenSell-inandRetailSalesVolume1Note：1.ChinaMarketMonitor(CMM)datarepresentstheretailsalesmarket,whichmaynotbeaccuratetosomeextentsinceitmainlycoversKAchannelsandlackssmallretailerstores;ChinaIOLmayexaggeratethesell-involumesincepartofthedatareportedfromfactoriesthemselves.Source:ChinaIOL,CMM,BDAinterviewandanalysisOurchannelcheckfindingsfurtherconfirmedtheworseninginventorystatus11…especiallythelevel-oneagentsThewholesaleschannelsaresufferingfromexcessiveinventory…InventoryValue,Jun2014-Jun2015

UnitJun2015Jun2014GuangdongRMBMN1,2961,037

Guangzhou

RMBMN350300

Shenzhen

RMBMN313262Foshan

RMBMN633475Zhejiang

RMBMN2,1251,581Shandong

RMBMN1,8101,700HenanRMBMNHigherthan2014n/aAnhuiRMBMNHigherthan2014n/aJiangsu

RMBMNUnchanged,vs2014n/aAs%ofAnnualSales2014–2015Est.2015Est.2014Guangdong%16.0%16.3%

Guangzhou

%10.6%12.8%

Shenzhen

%12.5%12.5%Foshan

%27.5%25.0%Zhejiang

%36.4%24.0%Shandong

%36.2%30.9%Henan%Higherthan2014n/aAnhui%Higherthan2014n/aJiangsu

%Unchanged,vs2014n/aExceptGuangdong,mostprovincesencounteredoverstockingproblemsandtheirinventorystatusgotworsewhencomparedwith2014.Thekeyreasonsincludethata)distributorsarereluctanttopurchasemoreproductsgiventhecurrentpoorsalesperformanceandhighinventorylevel;b)someoftheprovincialsalescompanieskeptpurchasingproductsfromGreeinordertofulfillthetarget.Source:BDAinterviewandanalysisBDAconductedinterviewedwith11distributorsand4agentandwefoundthattheinventorystatusofdistributorswasrelativelycontrollable,whilethelevel-oneagentsgotmuchpressurefromthecurrenthighinventorylevel.Channelsfeedbackoninventory，Jun2015TypePressureLevelInventoryRatioDistributors/Agents’sFeedbackDistributorsHigh150%HighinventorypressureHighn/an/aMidn/aTheretailperformanceispoor,evenforthestarproductsMid16%Willnotpurchasemore…futurepurchasingdependsontheretailsalesperformanceMid24%UnwillingtopurchasemoreduetosluggishsalesMid40%TerribleinventorystatusMid15%n/aMid45%Won’tbearmoreinventorySmalln/an/aSmall5%n/aSmalln/an/aAgentsExtremeHigh50%n/aHigh12%Won’ttakeinventoryuntilnextcoolyearHigh10%WillfocusonreduceinventoryHighn/an/a12TableofContentsAirConditioner(AC)SluggishsalesforMideain1H2015,withworseninginventorystatusRefrigeratorWashingMachineSmallHomeApplianceAppendix13Midea’sACsell-involumeincreasedby14%yoyfromJan2015toMay2015…Source:ChinaIOLUnit:MN1H20132Q15113%11Q1515%4Q144%3Q146%2Q1429%1Q1428%4Q133Q132Q13Jan-May2015114%12H20145%1H201428%2H20131Q13YoYGrowthNote：1.The2Q15

and1H2015

sell-involumedon’tcountthesalesperformanceinJuneduetolackofdata,soBDAcalculatedtheYoYgrowthratebetweenJan15andMay15instead.DomesticSell-inVolumeofMideaACMideaACSalesPerformanceinKeyRegions…ButourchannelcheckfindingsindicatesluggishgrowthofMidea’ssell-inperformance,andnegativegrowthofthesalesofprovincialsalescompanies,whichsuggestingtheworseninginventorystatus14Source:BDAinterviewandanalysisNote:1.AC2015lastsfromAug2014toJuly2015.“Mideasetitstargetgrowthof12%forAC2015;however,giventhecurrenthighinventorylevel,Mideacanonlyreach80%ofitstargetatthemost,whichmeansMidea’sbranchsell-invalueinAC2015willdeclineby10%yearoveryear…

butMideamayalsoboostitssalesperformancebyrequiringitsbranchestotakemoreinventory.”——industryexpertMidea’ssell-invaluewitnessedlow-single-digitgrowthin1H2015,withthesalesofprovincialbranchesfallingslightly.Thesell-invaluedeclinedbecausebothMidea’sprovincialbranchesanddistributorshadalreadybeenoverburdenedMideadistributorsarereluctanttokeptpurchasinggoodsduetotheworryofpoorretailperformanceMideahasparticipatedthepricewar,whichwastriggeredbyGreeinlate2014,andprovidedmorerebates(informofproducts,返貨),whichalsoareasonbehindthesluggishsell-ingrowth“Impactedbythemildsummer,ACretailgrowthhasstaggered,andACfactorieshavetoreducesell-inpricetoencouragedistributorstosellatdiscounts;Midea’ssell-inpriceisestimatedtodeclineby5-10%,whichalsopartiallycausedMidea’slowsell-ingrowthin1H2015.”——industryexpertRegionConvictionlevelStatisticalApproachSaleYoYGrowth1H20152Q2015ChinaHighFactorysell-in1%-2%ChinaHighFactorysell-in0%-5%-5%~-10%ChinaLowFactorysell-in-15%n/aBDAEst.Factorysell-in0%-5%

~-5%RegionConvictionlevelStatisticalApproachSalesYoYGrowthAC2015E12Q2015NorthSichuanHighProvincialsell-in0%

~-5%n/aSouthSichuanHighProvincialsell-in10%~15%-15%~-20%ZhejiangMidProvincialsell-in-10%-5%SouthJiangsuMidProvincialsell-in5%~10%n/aChinaHighProvincialsell-in0%~-10%-5%~-10%BDAEst.Provincialsell-in0%~-10%-5%~-10%Midea’ssell-involumegrewmuchfasterthanretailsalesin2Q2015,whichindicatesseriouschannelstuffing1501/1507/1406/1405/1404/1403/1402/1405/1504/1503/1502/1501/1412/1411/1410/1409/1408/144%-14%23%-7%32%6%ChinaIOLChinaMarketMonitorRetailSalesandSell-inVolumeGrowth1Source:ChinaIOL,ChinaMarketMonitor,BDAinterviewandanalysis05/1503/1402/1504/1503/1501/1512/1411/1410/1409/1408/1407/1406/1405/1404/1402/1401/1430%26%18%InventoryGrowth(GrowthGapbetweenSell-inVolumeandRetailSales1)Note:1.Thegrowthgapiscalculatedbysubtractingretailsalesgrowthfromsell-involumegrowthNote：1.

ChinaIOLstatisticsrepresentsforthegrowthofretailsales,butitonlycollectsdatafromKAchannelratherthanfromretailstores;ChinaMarketMonitorcollectsdatareportedbyeachcompany,butthenumbermightbemanipulatedChannelCheckresultsfurtherprovedtheterribleinventorystatusofMidea16ChannelInventoryValue1Region

ConvictionLevelUnitJun.2015Jun.

2014ChinaHighRMBMN25,00021,000ChinaMidRMBMN21,00014,000WesternSichuanMidRMBMB700650ZhejiangMidRMBMN900N/AChannelInventoryValueComparedtoAnnualSell-inValueRegionConvictionLevelUnitAC2015AC2014ChinaHigh%40%30%ChinaMid%35%20%~25%WesternSichuanMid%40%~45%45%ZhejiangMid%55%N/AMidea’ssell-throughperformancefellslightlyin1H2015andbothitsprovincialsalescompaniesanddistributorsaresufferingfromhighinventorylevel“MideaisaimingatpositivegrowthinAC2015,soMidearequiresdistributorstobearmoreinventory;Thenormallevelofinventoryturnoverisaround1-2months,but,atthemoment,Mideadistributorsaresufferingfromaninventoryturnoverofmorethanthreemonths.”——industryexpert“IguessthewholesaleschannelofMideaissufferingfromtheworseninginventorystatus…anddistributorsaccountfor40%ofthetotalinventory,whileMideabranchesaccountfor60%.”——IndustryexpertChannelcheckfindingsindicatetheworseninginventorystatusin1H2015……andchannelsaresufferingfromthehighinventorylevel“Ingeneral,the2015retailsalesperformanceofACindustrywasweak;consumptionofACisfarbelowourexpectation,duetothesluggisheconomyandthemildsummer.Asaresult,theinventorystatusalongthewholesaleschannelisgettingworse”——industryexpertSource：BDAinterviewandanalysisNote:1.ChannelinventoryisdefinedasMideabranches’inventoryplusdistributors’inventory.17TableofContentsAirConditioner(AC)Haierwaslosingsharein1H2015,withnegativesalesgrowthRefrigeratorWashingMachineSmallHomeApplianceAppendix18AccordingtoChinaIOL,Haier’sACsell-involumefellslightlyin1H2015comparedto1H2014…Sell-inVolumeofHaier’sAirConditionerUnit:MNJan-May2015-3%2H20147%1H201420%2H20131H20132Q151-8%11Q151%4Q14-3%3Q1414%2Q1415%1Q1427%4Q133Q132Q131Q13YoYgrowthNote：1.The2Q15

and1H2015

sell-involumedon’tcountthesalesperformanceinJuneduetolackofdata,soBDAcalculatedtheYoYgrowthratebetweenJan15andMay15instead.Source:ChinaIOLHaierACSalesPerformanceinKeyRegions…butaccordingtoBDAchannelcheckresult,thesell-invalueexperienced15%declinein1H201519Source:BDAinterviewandanalysisNote:1.SouthcentralregionincludesHebei,Jiangsu,Anhui,Hubei,andHunan;EastChinaregionincludesShanghai,Zhejiang,andFujianHaierACsalesin1H2015declinedsignificantlycomparedto1H2014Poorretailperformanceduetolowtemperature.

ACsaleswaslargelyimpactedbythemildsummerin2015,especiallyinAnhuiandSichuanConservativestrategyforpricewar.Haierdidn’tparticipatethepricewaruntilearly2015andthepromotionpolicywasstillaconservativeoneNeveradoptchannelstuffingpolicy.Haierhaslimitedbargainingpoweragainstdistributors,andHaier’sproductionlargelydependsontheorders,whichmeansHaierwillnotadoptchannelstuffingpolicy.“HaierACsalesin1H2015declinedquicklyyearoveryear…Haierdidn’tparticipatethepricewar,untilearly2015…andtheaveragepricediscountisabout5-8%,lowerthanGreeandMidea’s…BytheendofJune2015,Haierhaslostabout5%marketshare.”——industryexpertRegionConvictionLevelStatisticalApproachSalesYoYGrowth1H20152Q2015ChinaHighSell-in-20%-25%ChinaHighSell-in-25%~-30%-15%ChinaMidSell-in-5%~-10%n/aChinaMidSell-inn/a-15%AnhuiHighSell-in-14%-15%ZhejiangHighSell-inn/a-20%Southcentral1HighSell-in-13%n/aEastChina1MidSell-in-10%n/aBDAEst.Sell-in-15%-20%Despitethedecliningsell-invalue,Haier’schannelinventoryremainsatanormallevel20Acomparisonbetweenretailandsell-involumegrowthrevealsHaier’sinventorypressureislowerthanMideaandGree…0%05/1503/1501/1511/1409/1407/1405/1403/1401/1425%-25%50%ChinaIOLChinaMarketMonitor…andBDAresearchresultshowsHaier’schannelinventorymaintainsatanormallevelSource:ChinaIOL,ChinaMarketMonitor,BDAinterviewandanalysisChannelInventoryValue,Jun2014-Jun2015

UnitJun.2015Jun.2014ChinaRMBMN2,0002,200Anhui

RMBMN370270Jiangsu

RMBMN290250ChannelInventoryValueComparedtoAnnualSell-inValue,

2014–2015AC2015AC2014China%10-15%10-15%Anhui

%25%15-20%Jiangsu

%10-15%10%ComparedtoGreeandMidea,HaierfaceslessinventorypressurebecauseHaierappliesdemand-orienteddirectsalesmodelinmostregions;Haier’sdistributionchannelisalsoflatterthanthoseofGreeandMidea,andmostACproductsaresolddirectlytodistributorsaccordingtotheirordersviaHaierIndustryandTrade.SuchmodelreducestheinventoryburdenonHaier’sdistributionchannel03/1405/1407/1409/1425%50%-25%01/140%05/1503/1501/1511/14GrowthGapbetweenSell-inVolumeandRetailSales,Jan2014-May2015RetailSalesandSell-inVolumeGrowth,Jan2014-May201521TableofContentsAirConditioner(AC)ACpricewarwillcontinueRefrigeratorWashingMachineSmallHomeApplianceAppendixPricewarwasnotmitigatedin1H2015,andGreemaintainedthesamestrategyaswiththestartinlate201422ValueChainBDAChannelCheck“Exceptprovideddiscountedmodels,Greeanddistributorswon’tfundforpricescutbydistributorsthemselves.”——IndustryexpertAllocatedPromotionExpensesExecutionSalescompaniesre-packagethepromotionpoliciesaccordingtotheirsituationsShandongprovided~50buyoutSKUstodistributors,whichsell-inpricesdecreasedaround17%.Zhejiangoffered~10discountmodelsduringthefestivalsfromSep14toMay15andcompensatedthechannelsthroughafter-salesrebates.Retailstoresmayvoluntarilycuntsomeunfundedmodels’pricesinordertoimprovesalesandtoquicklyrecoupcashGreeProvincialSalesCompaniesAgentsandDistributors60%~20%~20%SalescompanieswillprovideadditionalincentivestochannelsforclearingoutinventorySource：BDA

interviewandanalysisDiscountmodels：provide~10discountedmodels,withstablesell-inpricesbutmoresalesrebates.Buyoutmodels：cutthesell-inpricesofsomeoldmodelswithoutotherrebatesorcashreturn.“PricewarwastriggeredbyGreesoitwilltakethemajorpartofmarketingcost.Meanwhile,sincethepromotionwasdesignedforreducingchannelinventory,distributorswillalsosharesomecosts.”——Industryexpert“SalescompaniescouldadjusttheGree’spromotionincentivesaccordingtotheiractualstatus.”——IndustryexpertWehaven’tseenanyclearsignsofotherbrandswithdrawingfromthepricewar23Gree1Q142Q143Q144Q141Q152Q15MideaHisenseTCLAUXHaiersell-inpricedeclineProvideanumberofdiscountedproductsandcompensatesalescompanieswithmorerebatesThepriceofsomeoldSKUsweredirectlylowered,withoutanyrebatesFollowingGree’smove,Mideaofferedapromotionpolicywithmorerebatesintheformofgoods,ratherthancashConvertingpolicyimpactintopricechange,Midea’ssell-inpricewentdownbyaround8%Haierdirectlyreducedsell-inprice,thoughthreemonthslaterthanGreeandMidea’spriceadjustmentHaierreducedpriceonlyby5%,asmallerchangewhencomparedtoGreeandMideaTCLreducedsell-inpriceasearlyasinJul.2014TCLfurtherreducedthepriceseveraltimestill1Q15whenthesell-inpricehaddeclinedbymorethan10%Auxhadcutdownthesell-inpriceofmid-to-lowendproductsasearlyasin1Q14andadjustpricemorefrequentlyafterthepricewarThecurrentaveragesell-inpricehasdeclinedby5%Hisensehadloweredsell-inpriceevenbeforeGree’sadjustmentAsofMar.2015,Hisense’ssell-inpricehaddeclinedbyaround10%comparedtoOct.2014Source:BDAinterviewandanalysisIngeneral,tier-1andtier-2brandscutpriceatroughlythesametimewhenGreelaunchedthepricewar

andaroundMar2015Whenlookingatmarketshare,Greebenefitsmuchfromthepricewarwhileothersmallbrandsarelosingmarketshare24BDACommentsMarketSharesinChina’sAirConditionerMarketChangeSource:CMM,BDAanalysisGreeMideaHaierOthers35.6%-9.3ppts40.9%42.9%1Q20154Q20142Q201511Q20142Q20143Q201435.7%33.6%30.7%-0.4ppt12.1%11.8%12.2%11.8%11.5%11.9%+1.4ppts26.1%26.3%23.7%23.9%22.5%24.1%+8.3ppts30.7%23.5%28.3%26.7%31.1%22.4%Greeisgainingsharethankstothepricewar;BDAfirmlybelievesGree’stakingsharesbasedonourchannelcheckfindings,whileCMMdataonlycovermegastorechannelandcannotreflecttheactualsharechangeMideafollowthepricewarbyofferingsimilarpromotionpolicywithGree,anditsmarketshareremainedrelativelystableHaierhadn’tparticipatepricewaruntilearly2015,butstilladoptedconservativemarketingstrategyHaieronlyprovidedmorediscountedSKU,withoutanyfurtherpromotionpolicyAsaresult,Haier’ssharehadbeenfurthersqueezedinthepastfewmonthsOthersmallbrandssufferedmorefromthepricewar.Theyhadnochoice,butfollowingthepricewarandloweringtheirprice,tosurvivethepricewarHowever,theywerestilllosingsharesinthepastfewmonths“Nochangeofsharesafterfollowinginthepricewar.”BrandNote：1.The2Q15datadidn’tincludethesalesperformancesinJune,whichhasnotbeenreleased.ItmayfavorMideaandHaier’ssharessinceitssamplesmostlycoverKAchannels.25TableofContentsAirConditioner(AC)OnlinechannelwouldbeapotentialchoiceRefrigeratorWashingMachineSmallHomeApplianceAppendixChinaonlineACsalesachievedarapidgrowthin1H2015,whiletheASPdroppedabit26Source:AVCACOnlineRetailingSalesValue,1H2014–1H20151H2015+57%1H2014+40%1H20141H2015Unit:MNUnit:RMBBN1H20142,413-11%1H20152,715Unit:RMBACOnlineRetailingSalesVolume,1H2014–1H2015ACOnlineRetailingAverageSalesPrice,1H2014–1H2015Onlinechannelenjoysarapidgrowthwhileofflinechannelsareexperiencingatoughyear27ACSalesVolumeYoYGrowthRateComparisonbyChannel,1H2015OnlineStoreLocalWGStoreBrandStoreDepartmentStoreMegaChainStoreUnit:%Source:AVC,BDAanalysisVerticalPlatform(MainlyJD)TmallMegaStore(MainlySuningandGome)Others+28%+47%+83%-16%1H20141H2015ACOnlineSalesVolumeYoYGrowthRateComparisonbyChannel,1H2015Unit:RMBMNIntermsofbrand,MideaandGreearegainingmeaningfulsharein1H201528ACOnlineSalesMarketShare,1H2014-1H2015OthersChanghongMideaHisenseChigoTCLGalanzKelonHaier11.3%GreeAux1H20151H2014Source:AVC,BDAanalysisAmongmajore-commercewebsites,GomehascoveredthemostSKUswhileTmallhasthelargestdiscountpromotion29Onlinechannel#ofBrands#ofSKUsComparisonofAirConditionerE-commerceWebsitesJDTmallGomeSuning1301,5582253491,9071181288421552591,202#ofdiscountedSKUsDiscountedpercentage8101679919162211153116%19%11%15%14%18%18%22%7%11%10%MediaGreeTotalGreehasnopresenceonSuning.Source:BDAanalysisIntermsofE-commerceoperation,marketingexpensesandwarehouseandlogisticsarethelionpart305%NetRevenueSalesGMVTmallCommission6%100%OnlineMarketingExpensesWarehouseandLogistics2%Source:BDAinterviewsandanalysisTmallWGFlagshipStoreOnlineCostsAnalysisFormostflagshipstores(directoperatedbyACcompanies),ACcompaniesgeneraterevenuewithsell-throughpriceinsteadofsell-inprice,whichcanincreasetheirtopline;BDACommentsThematureflagshipstoreswhichareoperatedbybigbrandcouldbetterleveragetheirmarketingcampaignandcontroltheirexpensesatabout5%oftheirGMV,butthesmallbrandandnewonlinestorescanhardlymakeit;TmallnowuseCainiao(菜鳥物流)warehouseandRRS(日日順物流)logistics,whichtotallytakesup5-7%ofGMV;JDhasdominantadvantagesinthisaspectbecauseofitsmaturewarehouseandlogisticssystem,anditonlytakes2~3%ofGMV;Tmallnowtakes2%forallhomeappliancesector;BasedonBDAchannelcheck,webelievethetakeratecanbehardlychangedinthefuture;Tmallpreferstogeneratemorerevenuefrommarketingpart,insteadofincreasingtheirtakerate;31TableofContentsAirConditioner(AC)Grossmarginwillbeimproved,whilesalesandmarketingexpensesmayoffsetthisRefrigeratorWashingMachineSmallHomeApplianceAppendixFromthepointsofcosts,theprocurementpricesofmajorrawmaterials(copperandaluminum)werefallinginthepasttwoyears,whichwouldleadtogrossmarginimprovement32GrossMarginLaborCostandD&A200OtherMaterialsAluminum57Copper460SalesPrice1,950Source:ShanghaiFuturesExchange,BDAinterviewandanalysisGreeACUEAnalysis1,20152QNote：1.BDAchoseGree1.5frequencyconversionsplittypeACforUEanalysis,whichcouldreflecttheaverageconditionson2Q2015.CopperFuturesprices,1Q13–2Q15Al1Q153Q141Q143Q131Q13Cu1Q153Q141Q143Q131Q13Unit：RMBK/TonAluminumFuturesPrices,1Q13–2Q15Unit：RMBK/Ton29.8%3.7%As%oftotalcostsGrossMargin:20.8%Unit：RMBBDAestimatethatGree’sgrossmarginwouldbeimprovedby