In 2017, the refrigerator market was in a downturn, with all major players struggling to keep up. According to data from Aowei.com, by the end of November 2017, the offline refrigerator market had shrunk to 65.55 billion yuan, down 4.1% compared to the previous year. For 2018, the market was expected to see only a 0.6% increase in retail volume, reaching 33.96 million units—essentially flat. Nail Technology suggests that, aside from the overall market chill, three key factors may be accelerating the decline of smaller and mid-sized brands.
**First, brand concentration is increasing.**
Once dominated by the "Four Golden Flowers," the industry now sees a more consolidated structure, with the "1+4+N" model emerging as the new standard. Public data shows that by October 2017, the top three brands captured 54.4% of the market, up 6.1% year-on-year. The top five brands reached 73.3%, and the top ten hit 90%. This growing dominance reflects an oligopolistic trend, pushing smaller players out of the market. In fact, the number of refrigerator brands dropped by 50–70 in 2017.
Nail Technology highlights two main reasons behind this shift: first, large brands have a stronger edge in meeting evolving consumer demands. With more than 70% of consumers looking to upgrade their appliances, brand reputation and product quality are becoming crucial factors, especially in the high-end segment. Second, rising raw material costs are making it hard for small and medium enterprises (SMEs) to survive, particularly those in the low-end market. These companies struggle to maintain profitability, leading to financial strain and even exit from the market.
**Second, small and medium-sized brands lack differentiation.**
Despite the dominance of top brands, the market remains stagnant, putting pressure on even the largest players. While 2018 is expected to show slight growth in both volume and revenue, the slow pace has many manufacturers worried. Nail Technology believes there’s still room for innovation and growth, especially through differentiated products or new market segments.
Leading brands have responded by launching unique products. For example, Haier introduced the first full-space freshness refrigerator, redefining the market with its advanced cooling technology. Similarly, Casarte launched its F+ series multi-door refrigerator to meet the demand for better storage solutions. Meanwhile, Midea and Hisense also introduced new lines like the “M Fresh†and “Tianlu†series, respectively, aiming to capture market share through innovation.
**Third, mainstream brands are expanding into third- and fourth-tier markets.**
With the rise of new retail models, e-commerce giants like Alibaba, JD.com, Gome, Suning, and Five Stars are increasingly penetrating the offline space. This integration of online and offline channels is reshaping how consumers shop for home appliances. Unlike smaller brands, which often rely on limited distribution, mainstream companies benefit from strong brand recognition and reliable products.
These major players are also accelerating their expansion into lower-tier cities, opening specialty stores and strengthening their local presence. As a result, the competition for small and medium-sized brands is intensifying. Nail Technology concludes that the refrigerator market is entering a phase of slow growth, where optimizing product structures, enhancing differentiation, and expanding channel coverage will be critical for survival. Small brands, lacking these advantages, face mounting pressure and may eventually be forced out of the market.
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