Low-voltage appliances lack high-end market competitiveness
Heilongjiang Junhe Building Materials Technology Co., Ltd , https://www.junhejiancai.com
August 31 09:28:58, 2025
In today's market, domestic low-voltage electrical companies often struggle with limited independent innovation capabilities and lack the competitive edge in high-end markets. As price wars and channel competition intensify, the overall industry environment has become increasingly challenging.
China's low-voltage electrical industry has evolved from simple assembly and imitation to self-developed designs. It now includes nearly 1,000 product series, with approximately 1,500 manufacturers generating an annual output value of around 20 billion yuan. However, most domestic companies are small in scale, with over 90% focused on producing mid-to-low-end products. This leads to a situation where three generations of products coexist in the market. According to market share data, first-generation products account for 15%, second-generation for 45%, and third-generation for 40%. With national policy trends pointing toward industrial restructuring, outdated, energy-intensive, and polluting products will gradually be phased out.
The landscape of state-owned, private, and foreign-invested enterprises in this sector has remained stable for years. International giants like ABB, Siemens, and Schneider Electric have fully entered the Chinese market, not only dominating high-end segments but also expanding into mid- and low-end markets. As globalization continues, the mutual penetration between foreign and domestic markets is becoming inevitable. This includes the export of high-end products by domestic firms and the entry of foreign products into lower-tier markets. While foreign firms possess strong R&D and management capabilities, domestic companies, especially private ones, excel in flexible business strategies and sales networks. However, there are still significant differences in size and quality, and further development is needed.
Trade deficits have slightly improved. From 2008 to the first half of 2013, China’s imports and exports of low-voltage electrical products remained stable, with the trade deficit declining year by year since 2010. In the first half of 2013, the trade deficit reached $1.023 billion, indicating a growing international competitiveness of Chinese low-voltage electrical products.
Despite this, export growth in the first half of 2013 continued the downturn seen in the second half of 2012. The cumulative import value for low-voltage electrical products was $6.688 billion, up 5.49% year-on-year. Meanwhile, exports totaled $5.664 billion, reflecting only a 3.15% increase compared to the same period in 2012, showing a sharp decline from the growth rates seen in previous years.
High-end low-voltage electrical appliances in the domestic market still rely heavily on imports. Although low-end products dominate the domestic market, most high-end products lag behind their foreign counterparts in terms of market share. In the first half of 2013, the most imported low-voltage products were connected electrical devices (line V1000V), valued at $3.9 billion, making up 58% of total imports. The export price for similar products in China is significantly lower, at $47.85 versus $300.82 for imports, highlighting the dominance of low-cost, mid-to-low-end exports.
According to customs data, the average unit price of exported products increased by 6.28%, while export volume decreased by 2.87% year-on-year. This suggests that China is rapidly upgrading its low-voltage electrical products, with improving high-end competitiveness.
Nearly 80% of China’s low-voltage electrical imports come from Asian markets, with more than 90% of exports going to Asia, Europe, and North America. China’s exports to Africa showed a notable increase of 15.39% in the first half of 2013, signaling progress in international market expansion.
About 30% of low-voltage electrical imports from Japan and South Korea are re-exported. Imports from these countries declined by 4.29% and 16.72%, respectively, in the first half of 2013. The main export destinations for low-voltage electrical products are Hong Kong, the U.S., and Japan, with exports to South Korea and Singapore growing by 25.62% and 11.36%, respectively.
Processing trade dominates import and export activities in the low-voltage electrical sector. The lack of value-added processing contributes significantly to the trade deficit. In the first half of 2013, processing trade accounted for 52.58% of imports, while general trade grew faster, indicating a gradual shift towards higher-value production.
Guangdong Province remains the largest hub for low-voltage electrical imports and exports, accounting for 44.83% of national imports and 40.23% of exports. Jiangsu and Shanghai follow closely, with Zhejiang being a major export region.
Insufficient investment in R&D and new product development hampers the sustainable growth of the industry. Foreign companies typically invest 7% of sales in R&D, while Chinese companies average 1–2%, with top firms reaching 3%. This gap limits innovation and long-term competitiveness.
Rising costs—such as raw materials, labor, and financial expenses—are putting pressure on profit margins. Many companies operate near break-even, and research and development efforts face financial challenges.
Foreign brand dominance and domestic monopolies add further pressure. In smart grid construction, many projects favor international brands, leaving domestic firms at a disadvantage.
Counterfeiting and price competition continue to plague the industry, reducing profitability and stifling innovation. The shift away from collaborative design has led to increased costs and reduced production efficiency, further hindering product development.
Despite these challenges, the future of China’s low-voltage electrical industry remains promising. Rapid economic growth and expanding industries such as power, data communications, and urban transit are driving demand. The smart grid initiative, expected to see over 4 trillion yuan in investment from 2011 to 2020, presents a major opportunity. As smart grids develop, the demand for intelligent power distribution and control systems will surge, creating a golden era for the industry.
With increasing focus on brand enhancement and innovation, some forward-thinking companies are partnering with renowned design firms to improve product value and competitiveness. Overall, the global economic landscape offers both opportunities and challenges, with expectations of stable imports and a 10% increase in exports in the coming year.