In 2017, the refrigerator market was experiencing a cooling trend, with many companies struggling amid a downturn. According to data from Aowei.com, by the end of November 2017, the offline market size for refrigerators had reached 65.55 billion yuan, marking a 4.1% decline compared to the previous year. For 2018, the market is expected to see retail sales of 33.96 million units, rising only 0.6% year-on-year — a sign of near-stagnation. Nail Technology suggests that besides the overall market slowdown, three key factors could accelerate the exit of smaller and mid-sized brands.
First, brand concentration has significantly increased. From the earlier "Four Golden Flowers" to the current "1+4+N" structure, the industry's brand awareness has become more concentrated. Public data shows that as of October 2017, the top three brands captured 54.4% of the market, up 6.1% year-on-year. The top five brands held 73.3%, an increase of 8%, while the top ten brands accounted for 90%, up 3.7%. This growing dominance of leading brands reflects a clear shift toward oligopoly competition, putting pressure on smaller players.
One reason for this trend is the advantage big brands have in meeting evolving consumer demand. Refrigerators, as a major household appliance, are often upgraded due to changing lifestyles. According to Ovi Cloud data, over 70% of consumers expressed a need to upgrade their appliances. As consumption levels rise, brand reputation and product quality have become crucial factors, especially in the high-end segment where top brands dominate.
Another factor is the rising cost of raw materials, which has made it harder for small and medium-sized enterprises (SMEs) to survive. Many of these companies operate in the low-end market, and the increasing input costs have led to financial strain. With limited resources, most SMEs find it difficult to sustain operations, leading to liquidity issues and even market withdrawal.
Second, small and medium-sized brands often lack the ability to differentiate themselves. Even though large brands are under pressure due to a nearly stagnant market, there is still potential for growth. Nail Technology notes that in such conditions, differentiated products or new market opportunities can drive success. For example, Haier launched a full-space fresh-keeping refrigerator in March 2018, creating a new standard in the industry. Similarly, Casa Di introduced its F+ series multi-door refrigerator to meet consumer demand for better storage solutions. These moves show how mainstream brands are adapting to maintain market share.
Third, leading brands are expanding into third- and fourth-tier markets. With the rise of new retail models, e-commerce giants like JD.com, Suning, and Gome are working closely with traditional retailers to create integrated online-offline experiences. This shift highlights the future direction of home appliance consumption — a blend of digital and physical channels. Mainstream refrigerator brands are leveraging their strong brand recognition and product reliability to gain a foothold in these regions, further squeezing out smaller competitors.
As the refrigerator market enters a phase of slow growth, optimizing product structures, enhancing differentiation, and expanding channel coverage will be critical for survival. Small and medium-sized brands are likely to face increasing pressure, with many eventually being forced to exit the market.
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