This year's May Day home appliance market ultimately fell short of manufacturers' expectations—no sudden consumption surge, no striking surprises, only an outcome that caught many off guard: a widespread downturn both online and offline, characterized by consistently low customer traffic, sluggish shipment volumes, and the former 'Golden Week' transforming into a 'quiet holiday' for numerous home appliance manufacturers.

Written by Ning Yan

"There's not much to discuss; it seems the market is stuck in a rut." This sentiment echoed most frequently during May Day conversations with frontline online store operators and offline physical store owners in the home appliance sector. One home appliance store owner confessed that since the first quarter of this year, the market has been ensnared in an "abnormally stable" predicament: customer traffic has been inexplicably dwindling, sales have stagnated, while market competition has intensified. Despite peers' exhaustive efforts to boost performance, stimulate demand, and capture customers, most have witnessed minimal results.

The pervasive market consumption slump is no accident but an inevitable consequence of multiple overlapping factors. The core issue lies in the persistent weakness in demand and the imbalanced competition on the supply side. This is the most prominent "unforeseen turn" in this year's May Day home appliance market—despite the industry's thorough preparations for the peak season, it encountered a "collective silence" from the consumer market.

Whether it's air conditioners, refrigerators, and washing machines, which should have entered their peak sales season, or color TVs, kitchen appliances, and small home appliances, which have long been in a state of normalized competition, their terminal performance has fallen short of industry expectations. The "high-temperature rescue" and "policy stimulus" that manufacturers generally hoped for now seem like distant hopes in a quagmire.

First and foremost, the ongoing adjustments in the real estate market have emerged as a significant impediment for the home appliance market. Currently, the real estate market is still mired in a turbulent cycle, with insufficient new home deliveries, delayed renovation demands, and no significant rebound in the old home renovation market. This has directly led to sluggish growth in the incremental home appliance market and insufficient momentum for updates in the existing market. As a downstream industry of real estate, home appliances are closely tied to the property market's prosperity. The downturn in real estate has directly impacted home appliance consumption, causing both essential and improvement-oriented home appliances to fall into a temporary demand stagnation.

Secondly, the impact of economic conditions and employment situations has further dampened household consumption willingness. Against a backdrop of sluggish expected income growth, consumers have become increasingly rational and cautious in their spending. Even with national subsidy policies in place, there remains a lack of enthusiasm for upgrading home appliances. For most households, home appliances are durable goods, and when income expectations are uncertain, the mindset of "making do with what we have" prevails. Planned upgrade demands are continuously postponed, further hindering the release of demand in the home appliance market.

Moreover, more critically, the market landscape is becoming increasingly fragmented, with the survival space for SMEs continuously squeezed. Currently, the overall home appliance market is on a downward trajectory, and large enterprises are increasingly ruthless in seizing market share from SMEs through their brand, technological, and channel advantages. The industry is exhibiting a trend of "the strong getting stronger and the weak getting weaker." Many SMEs, which once relied on low-price strategies to capture market share, are now finding that tactic ineffective. Gradually losing competitiveness in price competition, large enterprises maintain growth through their comprehensive advantages in the existing market competition, sustaining positive growth even as revenue growth slows. This gap further exacerbates market imbalances.

Perplexingly, many home appliance manufacturers have yet to decipher: What are consumers waiting for? What are they observing? Previously, flagship products promoted by leading enterprises could achieve sales of 50,000, 80,000, or even 100,000 units within a week of launch. Nowadays, reaching 20,000 units is considered optimistic. The fading of this blockbuster effect reflects profound changes in consumer demand and a "cognitive disconnect" between manufacturers and consumers—the "trending products" desperately created by manufacturers struggle to resonate with consumers, making it significantly harder to create hype. Consumers' "lack of interest" has become another core challenge facing the industry.

Since the beginning of this year, the home appliance sector has also witnessed two significant shifts in the consumer market, further underscoring the industry's difficulties and transformational pressures.

On one hand, the fervor and hype surrounding home appliance consumption have rapidly subsided. The model of relying on blockbuster products to drive market shipments is gradually losing its efficacy. Manufacturers attempting to create consumption trends through powerful collaborations or conceptual hype often find themselves "self-indulging," as consumers have become increasingly immune to various marketing gimmicks, focusing more on product practicality and cost-effectiveness.

On the other hand, the polarization of the consumer market continues to intensify, with limited consumer demand increasingly concentrated among leading brands and niche manufacturers. Meanwhile, a large number of SMEs, lacking differentiated advantages, are gradually being marginalized from the market. How to break free from price competition and build core competitiveness in branding, products, technology, and services has become a life-or-death issue for SMEs.

Even during this year's May Day period, when the trendy brand Pop Mart launched its blockbuster product, the Labubu refrigerator, it dared only to adopt a "hunger marketing" strategy with a limited release of 999 units. The product's price in the secondary market also plummeted from over 20,000 yuan to around 6,000 yuan. It is foreseeable that even young people willing to pay for emotional value have become rational and cautious when it comes to functional products like refrigerators.

Currently, competition in the home appliance market has entered a new phase of chaotic "multi-system" battles, with all manufacturers vying for a share of the "cake" as the core objective. The limited scale of demand determines the brutality of this competition—whether through price cuts, technological innovation, or ultra-long free services, it is difficult to quickly activate the market or create new demand; manufacturers can only compete for shares of the existing cake.

In this chaos, manufacturers' competitive logic and business strategies have shown clear differentiation. Leading enterprises not only compete for market share but also focus on improving operational efficiency and innovating competition models. Catering to the entire market and covering high-, mid-, and low-end consumer groups, they leverage their brand, technological, and service advantages to maintain stable growth even as revenue growth slows.

However, SMEs focus on their advantageous markets, emphasizing cost-effectiveness and attempting to break through in niche segments. Some choose to imitate the strategies of leading enterprises, while others try to take alternative paths, adhering to the mindset of "offering what others don't, excelling in what others offer, and changing when others excel." Yet, most struggle to break free from their dilemmas.

Notably, since the beginning of this year, the competitive tactics of home appliance manufacturers have gradually returned to pragmatism and rationality. While price competition still emerges periodically and cyclically, it is no longer the sole competitive weapon. Some enterprises use ten-year free repair services as a breakthrough to enhance user loyalty; others emphasize "genuine materials" to win recognition through quality; still, others introduce policies like "one-year replacement only, 365-day free trial" to reduce consumers' purchase concerns. These attempts represent manufacturers' efforts to find a way out amid difficulties, but they have yet to form a sufficient collective force to change the overall market slump.

Overall, the "no surprises, just unforeseen turns" in this year's May Day home appliance market essentially reflect the concentrated challenges of the home appliance industry during its transformation period—weak demand, fragmented market landscape, and imbalanced competition. Multiple pressures have superimposed, plunging the industry into a phase of adjustment and turbulence.

For home appliance manufacturers, relying on hot weather to drive consumption in the coming period is only a temporary fix. The real way to break through lies in acknowledging changes in consumer demand, breaking free from price competition, focusing on product innovation and service upgrades, and building differentiated competitive advantages. Only by doing so can they stand firm in the sluggish market and welcome the industry's next round of recovery!

‍‍Disclaimer: All original articles on the Home Appliance Circle are strictly prohibited from being reprinted without authorization.