Chinese home appliance companies showcasing their products at the China Import and Export Fair, widely recognized as the Canton Fair, have announced price hikes of around 10 percent. This adjustment is a direct result of escalating raw material costs, largely driven by the ongoing conflict in the Middle East, as reported by Yicai Global.
Manufacturers like Skyworth Group are facing significant cost pressures, with prices for essential raw materials such as plastics – many sourced from the Middle East – surging by 50 to 80 percent. A company representative informed Yicai Global that the appreciation of the Chinese yuan against the US dollar by 3 to 4 percent is also contributing to these increases. Consequently, Skyworth has raised the prices of its refrigerators and washing machines by approximately 10 percent at the fair.
Zhang Zhuofan, executive director and general manager of Cuori Electrical Appliance Group, confirmed a roughly 10 percent rise in overall costs, despite a robust influx of orders this year. Following the sharp increase in plastic prices, Cuori began adjusting its export quotations last month. However, Zhang noted the challenge for retailers to fully pass on these price increases, given the price sensitivity of European and American consumers. This suggests that both sellers and buyers will likely share the cost burden, each absorbing an increase of about 5 percent.
An exporter indicated that the broader home appliance industry surrounding the Canton Fair has also started implementing price increases of up to 10 percent, with products containing higher plastic content seeing more substantial hikes.
The Middle East conflict has also caused disruptions in logistics and transportation. Zhang Qingfu, vice president of Haier Overseas Electric Appliances, explained that some shipments destined for the Middle East are currently undeliverable and must be rerouted. Should the Strait of Hormuz remain blocked, the company plans to supply the region from alternative locations starting next month.
Despite these rising costs and logistical hurdles pushing up export prices, several home appliance firms at the Canton Fair expressed confidence in the long-term prospects of overseas markets to Yicai Global. They emphasized that innovation, rather than low prices, remains the primary appeal of Chinese appliances for international buyers.
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