Analysis for informational purposes only. Capital at risk.
- The Brand Illusion: Store aisles suggest plentiful choice, but the market has flipped. Chinese challengers (Haier, Midea) have absorbed or outcompeted many legacy Western labels (GE, Toshiba, Fisher & Paykel), while Korean firms (Samsung, LG) now mainly defend the premium tier. This consolidation is most visible in fast‑growing categories like robot vacuums, where the top five Chinese manufacturers account for roughly 70% of global shipments.
- Hidden Component Dominance: Control sits below finished goods. Midea and Gree together produce an estimated 70–75% of the world’s AC compressors, and Sanhua holds roughly 45% of key AC control components (valves, heat exchangers). As a result, many Western brands effectively fund their competitors by sourcing high-margin internal parts from them.
- How Chinese Incumbents Keep Growing: Despite a weak domestic property cycle, Haier and Midea have sustained high‑single‑digit revenue CAGRs via overseas expansion, commercial and non‑appliance products, and moving into premium segments.
China’s Win in Home Appliances
The home appliance market looks full of choice—premium Western heritage brands, mid‑range Korean brands, and low-cost Chinese labels. But beneath the badges, competition has become more cosmetic. Chinese manufacturers now control volume, components, and scale, effectively “buying the pyramid” and reshaping industry economics.
The white goods industry has now evolved into a “three-tier” ecosystem:
• The Attackers (China) — Haier, Midea, Gree: These firms combine vertical integration, component ownership and massive OEM/ODM scale. That lets them undercut incumbents on price, win volume globally, and pull ahead on revenue compared with peers like LG, Panasonic and Whirlpool.
• The Defenders (Korea) — Samsung, LG: Rather than competing on cost, they are leaning into software, services and smart features to protect margins and maintain premium positioning.
• The Retreaters (US/EU/Japan) — Whirlpool, Toshiba, GE: Many legacy Western and Japanese firms are pulling back from global volume plays, focusing instead on home markets or profitable niche segments.
The Fall of The Old Guard
Western and Japanese brands increasingly ceded manufacturing control to Chinese firms, often keeping the brand while outsourcing (or selling) production and supply chains.
- Sanyo: White goods business acquired by Haier (2012).
- Fisher & Paykel: Acquired by Haier (2012).
- GE: Sold to Haier (2016). Haier now leverages the GE brand to sell premium appliances in the US while sharing global manufacturing and distribution.
- Toshiba: Midea acquired Toshiba’s appliance business (2016), retaining patents but replacing the supply base.
- Gorenje: Acquired by Hisense (2018).
- Candy: Acquired by Haier (2019).
- Philips: Domestic appliances sold to Hillhouse Capital (2021).
- Whirlpool: Pulled back from Europe, spinning EMEA operations to Beko Europe (2024) and shifting focus to North America.
- Teka: Acquired by Midea (2025).
The New Big 3: Haier, Midea, and Gree
• Midea (300 HK) — World’s largest appliance maker by volume, capturing ~24% of the global volume in residential air conditioners and ~14% in laundry. Broad OEM/ODM business (c.60% of overseas revenue), dominant in AC compressors (c.45%).
• Haier (6690 HK) — #1 global major‑appliance brand for 17 years; strong in refrigerators and washing machines; grows through acquisitions and brand rollouts (GE, Candy, Fisher & Paykel).
• Gree (000651.SZ) — Specialist in air conditioning with deep domestic exposure and market leadership in compressors (c.25–30% share).
Midea is the largest of the three by revenue driven by a diversified product mix and a substantial overseas OEM/ODM business. Gree is the smallest, due to its narrower focus on air conditioners and heavy dependence on the domestic market.
Despite a weak domestic property cycle that weighed on appliance demand, Haier and Midea have delivered high‑single‑digit revenue CAGRs in recent years, driven by overseas expansion, product diversification into commercial/non‑appliance segments, and premium products.
Gree’s growth has lagged because of its exposure to residential ACs (which track the property market). In response, Gree has leaned on higher dividend payouts and channel reforms to improve margins while pursuing gradual diversification. As a result, and because room ACs generally carry higher margins than other appliance products, Gree now reports the highest net margin of the three.
Category Highlights and Implications
Air Conditioning: The Triopoly and the Hidden Dominance
- The Triopoly: Haier, Midea and Gree produce roughly 50% of residential ACs globally. Including OEM production for legacy brands, China accounts for ~70% of room ACs.
The Hidden Dominance: Midea and Gree together make 70–75% of global AC compressors. Key control components (valves, heat‑exchangers) are dominated by Chinese suppliers such as Sanhua (2050 HK) with ~45% share.
Daikin: The “Last Samurai”: Daikin remains the major non Chinese player with strong position in the premium and commercial segment.
Refrigeration: The “Cold Chain” Consolidation
- The Rise of Haier: Haier controls an estimated 20–23% of global refrigerator volume via acquisitions and OEM scale — near double the next competitor.
- The Fall of Whirlpool: Whirlpool has ceded significant global ground, exiting Europe and selling China operations.
- Koreans’ “Smart” Defense: Korean players defend the premium tier with “smart” features; LG now leads the US fridge market on share (c. 24%) via premium positioning.
- The “Silent” Challenger: Midea, which owns the Toshiba appliance brand, captures roughly 10% of the branded global refrigerator market and operates a large OEM/ODM business.
Washing Machines: A Tight Race
- A tight race: Haier leads with ~16% share, but LG, Samsung and Whirlpool each retain over 10% shares, limiting a full Chinese monopoly.
- Whirlpool’s stronghold in the US: Whirlpool maintains a dominant US position (~46%) due to brand loyalty and channel strength.
- Korean players’ tech moat: Samsung and LG defend premium pricing with tech-led differentiation (AI sensors, auto dosing).
Smart Robotics Cleaner: Pioneer dismantled
- Chinese dominance: Five Chinese makers (Roborock, Ecovacs, Dreame, Xiaomi, and Narwal) control nearly 70% of the global shipment volume. They won by deploying advanced R&D, such as LiDAR navigation and AI object avoidance, at fast speed.
- The Fall of the Pioneer: iRobot, which invented the Roomba, filed for Chapter 11 bankruptcy in December 2025 and is being acquired by its own Chinese manufacturer, Picea Robotics.
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