Low-voltage appliances lack high-end market competitiveness
Heilongjiang Junhe Building Materials Technology Co., Ltd , https://www.junhejiancai.com
August 31 09:37:44, 2025
In today's competitive landscape, domestic low-voltage electrical companies face significant challenges. Many lack strong independent innovation capabilities and struggle to compete in high-end markets. As price wars and channel competition intensify, the overall environment for domestic manufacturers is becoming increasingly difficult.
China’s low-voltage electrical industry has evolved from simple assembly and imitation manufacturing to self-developed design. It now encompasses nearly 1,000 product series, with around 1,500 manufacturers generating an annual output value of approximately 20 billion yuan. However, most domestic companies are small in scale and numerous, with over 90% focused on producing mid-to-low-end products. The market is dominated by three generations of products: 15% from the first generation, 45% from the second, and 40% from the third. With national policies pushing for industrial restructuring, outdated, energy-intensive, and polluting products are expected to be phased out.
State-owned, private, and foreign-invested enterprises have long coexisted in this sector. International giants like ABB, Siemens, and Schneider Electric have fully entered the Chinese market, capturing high-end segments while also expanding into mid-to-low-end markets. This trend reflects a growing global integration, where foreign firms penetrate domestic markets and Chinese companies begin to export high-end products abroad. Despite this, foreign firms still hold advantages in R&D, design, and management, while domestic players—especially private companies—excel in flexibility and sales channels. To improve competitiveness, the government should encourage industrial clusters to develop specialized, refined, and unique products, driving overall industry upgrades.
Trade deficits in the low-voltage electrical sector have slightly improved. From 2008 to mid-2013, China’s trade in these products remained stable, with a declining deficit since 2010. In the first half of 2013, the trade deficit stood at $1.023 billion, showing gradual improvement in international competitiveness. However, export growth slowed after 2012, with a modest 3.15% increase in 2013. Meanwhile, import values rose by 5.49%, highlighting continued reliance on imported high-end products.
China’s exports remain largely composed of low-price, mid-to-low-end goods, with high-end products still lagging behind foreign counterparts. For instance, the most imported product was "other connected electrical devices," valued at $3.9 billion, or 58% of total imports. Export prices for similar products were only $47.85, compared to $300.82 for imports, indicating a gap in quality and value.
Despite this, there are positive signs. Export unit prices increased by 6.28% year-on-year, while volume dropped by 2.87%, signaling a shift toward higher-value products. Nearly 80% of imports come from Asia, with exports mainly going to Asia, Europe, and North America. Notably, exports to Africa grew by 15.39% in 2013, showing progress in new international markets.
Processing trade dominates both imports and exports, but it lacks value addition, contributing to trade deficits. While general trade is growing faster, processing trade remains a key feature of the industry. Guangdong leads in imports and exports, followed by Jiangsu and Shanghai.
Insufficient investment in R&D is a major obstacle. Foreign companies typically invest 7% of sales in R&D, while Chinese firms average 1–2%, with top companies reaching 3%. Without increased innovation, China risks falling further behind in the global market.
Rising production costs, including raw materials, labor, and financial expenses, are squeezing profits. Many companies operate at low margins, making it harder to fund research and development. Additionally, the dominance of foreign brands and domestic monopolies creates further pressure on local manufacturers.
Despite these challenges, the future of China’s low-voltage electrical industry remains promising. Rapid economic growth, expansion of power, data communications, urban rail, and automotive industries are creating strong demand. With smart grid construction set to receive massive investment, the industry is poised for long-term growth. As competition intensifies, the need for innovation and brand enhancement becomes more urgent. Forward-thinking companies are already partnering with design firms to boost their market position.
In summary, while China’s low-voltage electrical industry faces many challenges, it also has significant opportunities. With strategic development and increased innovation, the sector can continue to grow and strengthen its global presence.