With the recovery of the global economy, the global freezer and refrigerator market has entered a stage of steady development in comparison with the shrinking domestic market for Chinese manufacturers. ChinaIOL’s data shows that in 2017, global refrigerator sales reached 10 million units with a year-on-year increase of 0.8%; the amount of sales were US$61.24 billion with a year-on-year increase of 3.6%. Obviously, the average price of freezer and refrigerator products is rising, and the high-end transformation effect began to appear.
Due to the fierce industrial competition and high tariffs imposed on China by the United States, domestic manufacturers are paying increasing attention to the global market and trying to seek overseas opportunity. After Haier’s acquisition of GE and Midea’s acquisition of Toshiba, Hisense also acquired Gorenje an European brand in 2018, motivating the the internalization of China’s home HAVC companies. For the foreseeable future, there will be more and more companies investigating opportunity for overseas mergers and acquisitions.
The overall global refrigerator market is warming up, but the performance of regional markets is various. In 2017, the emerging regions represented by Southeast Asia and Eastern Europe grew rapidly. Asia is the largest regional market in the world for the production and consumption of refrigerators, accounting for nearly 60%. Though in China, Israel, UAE and Taiwan, the growth rate of market size was negative, the refrigerator market in other Asian countries has developed strongly with rapid growth, especially Pakistan, India, Iraq and Vietnam.
Europe is the second largest refrigerator market in the world. In 2017, benefiting from strong domestic demand and cyclical recovery of the global economy, the demand for refrigerators in Europe was released, and the market size increased by 2.3%. In addition to its huge consumer market, Europe is also the third largest producer of refrigerators in the world. Nearly 80% of European refrigerators are concentrated in Eastern Europe, with Turkey having the highest production share. Due to the impact of new energy efficiency, the proportion of inverter products in the European market will continue to increase in the future, and Chinese refrigerator manufacturers will have many opportunities in the future.
In 2018, the performance of the North American market remained stable. The signing of the US General Tariff Act in September may not cause significant impact in the short term mainly because of China's capacity advantage and low substitutability in the short term. But in the long run, it will lead to the transfer of the refrigerator industry from the North American to low-cost regions like Southeast Asia.
The decline in the size of the refrigerator market in Africa has deepened. After the economic trough in 2016, the African economy have hit bottom and begun climbing again in 2017. Among them. The sub-Saharan region experienced rapid economic growth with a growth rate of 2.4%. The consumption in this region has rebounded. However, due to the sluggish consumption in Nigeria and other places, the entire African refrigerator market has been dragged down.
Under this circumstance, Chinese companies may increase the exploration of the domestic market. In addition, they will continue to look abroad for global opportunities. With the escalation of trade wars, the possibility of overseas mergers or acquisitions will continue to increase, and some companies will plan to invest in India, Bangladesh, Southeast Asia or Eastern Europe where costs are low and trade tariffs are circumvented.