Polaris Smart Grid Online News: As of the end of 2016, the market for low-voltage electrical appliances reached 75 billion yuan. The market size of low-voltage electrical appliances in 2017 is expected to be around 81 billion yuan, a year-on-year increase of 8%. Demand for low-voltage electrical products is driven by investment in various industries, but is most relevant to investment in fixed assets. Driven by the rebound in investment in fixed assets and the rapid growth of downstream power generation, industry, and real estate markets, it is expected that the output value of the low-voltage electrical appliance industry will maintain a growth rate of about 8% from 2018 to 2020.

 

Domestic low-voltage electrical appliance market scale and growth forecast

 

At present, the low-voltage electrical appliance industry can be divided into three echelons of high, medium and low end. The first echelon is the technology leader in the industry, mainly including Schneider, ABB, Siemens and other multinational companies, which have mastered the most advanced technology in the low-voltage electrical industry and lead the development direction of the low-voltage electrical industry; the second echelon is the industry technology Followers mainly include companies such as Chint Electric, Changshu Switch, Liangxin Electric, Shanghai Renmin Electric, etc. These companies have strong R&D capabilities and can keep up with the development of industry technology in a timely manner; the third echelon is the majority of the industry Companies that have homogenized products and compete with low-price strategies have low R&D capabilities. Generally, only when the product has entered a mature period and the production technology has become public information in the industry, can the product be gradually produced. The low-end demand, which has the largest market share in the industry, generates relatively low profits, and most of the profits are concentrated in the high-end market.

 

Compared with medium and high voltage electrical equipment, low-voltage electrical equipment has a lower unit price and stronger bargaining power downstream. Therefore, when the price of raw materials rises, companies can better control the level of gross profit margin. Taking Chint Electric as an example, the purchase cost of the company's main raw materials copper, silver, steel and plastics accounted for about 50% of the total cost, and the product gross profit margin has a large correlation with the copper price, which is obviously negatively correlated. However, when the price of copper rose close to 50% from 2016 to 2017, the company's gross profit margin declined at around 5%.

 

The low-voltage electrical appliance industry is a fully competitive and highly market-oriented industry. From a global perspective, Schneider, ABB, Legrand, Siemens and Eaton have a combined market share of 25%, and Schneider has a market share of 8% ranking first. From the domestic market, Chint Electric has a market share of 18%, ranking first, Schneider has a market share of about 17%; ABB has a market share of about 10%, and Delixi has a market share of about 8%. In addition, there are a large number of low-end market participants who use price competition to obtain the market, further reducing industry concentration.

 

The low-voltage electrical industry pattern is scattered

 

In the future, with the construction of smart grids, the widespread application of new energy, the improvement of environmental protection thresholds and the improvement of various users' requirements for product performance and quality, the proportion of the S1/S2 market will gradually increase, and low-end production capacity will gradually clear up. Market concentration is expected to increase.