Date
21 January 2017
The price of smart modules would decide the pace at which smaller appliance makers will join the 'go smart' bandwagon. Photo: Bloomberg
The price of smart modules would decide the pace at which smaller appliance makers will join the 'go smart' bandwagon. Photo: Bloomberg

What is stopping SME appliance makers from going smart?

Big Chinese brands are rolling out all sorts of smart appliances, with features like voice control and internet connection. However, most their small and medium-sized peers have yet to jump on the bandwagon.

Many of these SMEs can be found in Shunde District in the southern city of Foshan, Guangdong province.

Thanks to these firms, China used to top the global list of top producers of refrigerators, air conditioners, microwave ovens and rice cookers.

But with the coming of smart appliances, they seem to be hesitating. They either don’t have the technology or money, or are not sure if “going smart” is the right direction.

These companies usually operate as contract manufacturers, and as such, their single-digit profit margin does not allow much room for making the wrong investment.

“Take the rice cooker as an example. Our unit cost is about 100 yuan (US$15.73), and a smart appliance chip can cost 30-40 yuan. The additional cost is too hard to absorb,” a Shunde appliance makers’ association told icai.com.

They are also questioning if consumers really want such products and are willing to pay up.

Still, more mainland factories are expected to take the leap if smart modules get cheaper.

Some are forecasting the price of such modules to drop to below 20 yuan a piece by the end of this year.

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CG

EJ Insight writer

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