Philips: Still on Top

According to sales figures for China’s urban areas, since the end of 2006, Philips has continuously topped the Chinese vacuum market, and in April 2009 it held 29.52% of the market by sales volume.

Philips began actively pushing its bagless vacuums two years ago. Eight of the 30 Philips models sold in China are bagless, and are the products recommended at the point of sale. Prices range between 200 and 5000 RMB. In the overall domestic market, traditional low-cost canister vacuums continue to lead in sales, while handheld vacuums do their part to pad Philips’ sales figures. Bagless vacuums drive a sizable volume of sales in first and second-tier cities.

Philips has always focused on the high-end market. It currently has a number of products priced at around 3000 RMB, including the 2000-W high-efficiency FC9262, which comes with a self-cleaning filter and handle-mounted fingertip controls. Another model, the FC9256, builds upon the FC9262’s functionality and adds a handle-mounted LCD display, and is priced at more than 4900 RMB.

While marketing itself as a high-end brand, Philips hasn’t forgotten the middle and low-end markets in its product development. Several varieties of bagged canister vacuums are available for as little as 300-400 RMB, just slightly higher than Midea and Haier vacuums. It’s these models that allow Philips to retain its dominant position in second- and third-tier cities.

Haier: Looking for a Comeback

According to data from the Beijing-based CMM market research firm, Haier, which had previously sat atop the Chinese vacuum cleaner market, lost its place to Philips in December 2006. In February 2008, Haier was passed by Midea and fell into third place. It has since engaged in a competitive battle for the runner-up position with Midea. Between February 2008 and February 2009, Midea’s sales consistently topped Haier’s.

Qu Guinan, head of Haier’s home appliance division, says that Haier is now in the process of reorganizing its sales network in first-tier cities to make up for its lack of commitment to that market in recent years, and is already seeing results from that reorganization. Qu says that in April 2009, according to numbers from retail chain Gome, Haier vacuum cleaners outsold Midea in Gome’s Beijing stores, and was that month’s best-selling domestic brand. In addition, CMM’s April 2009 numbers show Haier’s share of the domestic vacuum cleaner market at 16.22%, ranking second.

Haier currently has about 20 products on the market and, save for a few handheld and drum models, they are all canister vacuums. Haier offers one commercial drum vacuum for about 3000 RMB, and the rest of its models are priced between 100 and 2000 RMB. Qu says that in terms of sales volume, the ZW1200-2 series products are the most popular models. The series features a mite-removing technology, and is priced between 400 and 600 RMB. As for sales income, the ZW1300-8 series performs the best. It features a vortex bagless design, 1200 W or more power, and Haier’s heavily promoted disinfectant functions using negative ion and photocatalyst-based antimicrobial technologies. The model is currently available at between 500 and 700 RMB.

Midea: Remaining Strong

Midea first squeezed into the vacuum cleaner market on the strength of its low prices, but has since optimized its product structure and increased the proportion of mid- and high-end products in its lineup. According to CMM’s numbers, in April 2006 Midea was in 6th place with just 5.84% of the Chinese vacuum market, but by February 2007 had moved into third place with 11.26%, and in 2008 spent several months in second place above Haier.

Midea’s vacuum cleaner line consists of about 30 products, with mostly canister vacuums. Prices range from between 100 and 2600 RMB, but more than half are available for less than 500 RMB, and only six sell for more than 1000 RMB. Compared with foreign brands like Philips, Midea’s vacuum cleaners are priced for the mid- to low-end markets. Eight of Midea’s canister vacuums are bagless, and according to the company, the QW12T-802 and QW14T-803 are its most popular bagless canister vacuums. Both vacuums sport strong fans and multiple filtration systems, as well as a design that completely separates the suction head from the vacuum’s mechanical parts, removing the possibility of dust entering the machinery and affecting its performance. The vacuums are available for between 700 and 1400 RMB.

In order to increase the variety of its product line and improve its brand image, Midea this year also released an upright steam vacuum, the QL18T-301. This model has a voice indication system warning when the bag is full or when the water level is low, and is currently Midea’s highest-end product, with a retail price of around 2500 RMB.

Electrolux: Upscale and Upright

According to CMM’s numbers, Electrolux held just 5.70% of the Chinese vacuum market in February 2009, far below Philips. Since entering the market, it has mostly focused on first-tier cities.

When talking about Electrolux’s high-end image, one has to mention its Trilobite Robotic Vacuum. Already in its second generation, this fully automated vacuum sells for about 20,000 RMB, making it by far the most expensive vacuum in the market. It uses ultrasonic sensors to navigate through a room and determine what area needs to be cleaned. It works on both carpet and tile, and can handle dust, hair, and tiny particles. Its owner has but to set the cleaning date and time, and the Trilobite will take care of the rest. Once the cleaning is done, the Trilobite will return to its docking station to recharge. In reality, only a small number of Chinese consumers can afford the Trilobite. For now, it remains a concept appliance whose main role is to reinforce Electrolux’s upscale image.

Unlike other brands, upright vacuums are Electrolux’s focus, accounting for about 1⁄3 of the brand’s total products. The best known among these are the Rapido series, the cordless models of which won the 2005 European Industrial Design award. With its cyclonic design and mite-removing suction head, the Rapido can also be removed from its base unit and used as a handheld vacuum. The series is already in its second generation, and can be purchased for between 1000 and 2000 RMB. Able to serve as an electric broom, a handheld vacuum cleaner, and an upright vacuum cleaner, the Rapido occupies a unique place in the market.

With the development of all levels of markets, and in particular with the increase of demand for home appliances in lower-tier markets, Electrolux is also beginning to enter third- and fourth-tier markets. Taking note of the growing number of pet owners in China, Electrolux has released the Z1480, made specifically for families with pets. In addition to the standard features of a traditional bagged canister vacuum, the Z1480 also contains an active charcoal filter and an air freshener to remove the odors of pet hair, and comes with a variety of heads. This model is available for 600 RMB, and has been warmly received by the market.