Industry Analysis & Industry Trends
Domestic demand for small electrical appliances has been switched off. Consumers are redirecting spending away from energy related goods and services due to rising energy costs and in compliance with government energy and environmental protection regulations to conserve energy. The plug has been pulled on domestic production with market saturation of cheap imports. The future for small electrical appliances lies in technology, innovation and new business models. Computer aided design in manufacturing, use of lighter plastics and robotic automation in production, e-commerce in retailing, rationalization in number of plants and outsourcing production to third party manufacturers in low cost.. read more
Starting a New Business
The major barriers to entry include the following: the strength of incumbent companies' brands and patents; the availability of economies of scale and scope in this industry, which can be significant (and can aid established players); intellectual property owned by incumbents; and the existing arrangements that incumbents have with distributors and retailers.
A local in-house warranty and servicing capability can provide strategic advantages. This capability is often only feasible after a critical mass of appliances is installed.
In addition, high production costs in advanced countries may act as a barrier to entry in those countries... read more