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? Key customer groups – Chinese educated overseas – Expatriates – Wealthy local people ? Key markets – Beijing – Shanghai – Guangzhou – Shenzhen – Shenyang 12 aaaaaa010807BJrefrigerator PRICE IS THE DOMINANT FACTOR FOR CONSUMER’S NONSIDEBYSIDE REFRIGERATOR CHOICE WHILE BRAND AWARENESS IS MORE IMPORTANT FOR SIDEBYSIDE REFRIGERATOR Factors to consider when making nonsidebyside refrigerator purchasing decisions Percent of respondents Source: IMI, SCSS2023, interview 47 28 26 23 19 17 14 14 10 7 4 Brand image Price Capacity Energysaving Exterior design Low noise No frost Aftersales service NonCFCs Freezer capacity Other KBFs for side by side refrigerator Soft mercials, such as putting a sidebyside refrigerator in the club of highend residential area is very effective in increasing the awareness Many potential customers are not fully aware of the existence of sidebyside refrigerators in China market When making purchase decisions, the key factors that customers consider are brand, design and feature Yong Guy Manager ZXHY Trading Co. 13 aaaaaa010807BJrefrigerator DIRECT COOLING IS STILL THE PREFERRED CHOICE ACROSS THE MARKET Percent Source: SINOMR。CONFIDENTIAL Industry Situation Analysis: Refrigerator aaaaaa ELECTRONICS CHINA (aaaaaa China) This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client anization without prior written approval from McKinsey Company. This material was used by McKinsey Company during an oral presentation。 it is not a plete record of the discussion. aaaaaa010807BJrefrigerator KEY MESSAGES ?Refrigerator market is expected to grow at % annually from RMB 21 billion in 2023 to RMB 26 billion in 2023. Although growing at a rate as high as %, sidebyside refrigerator market is expected to remain very limited in the next 5 years ?In general, industry profitability for refrigerator is moderate. However, sidebyside refrigerators enjoy double digit return on sales ?Except sidebyside refrigerator, refrigerator market is led by local players. However, there are opportunities for MNCs to successfully build up their position by focusing on midtohighend segments ?The refrigerator industry is relatively “l(fā)owtech” and has low entry barriers. Entry into WTO is not expected to have direct huge impact on the petitive environment ?With market shares around 3 to 4%, aaaaaa is moderately positioned in refrigerator market. 1 aaaaaa010807BJrefrigerator MARKET ASSESSMENT Market assessment Supply (petitor) analysis Demand (customer) analysis Overall environment analysis Market definition 2 aaaaaa010807BJrefrigerator MARKET ASSESSMENT Supply (petitor) analysis Demand (customer) analysis Overall environment analysis Market definition ? Evaluation criteria, weight and rating ? Assessment of market attractiveness Market assessment ? Product/service definition ? Relevant regulatory environment and trends ? Relevant technological environment and trends ? Market size and growth rate ? Key buying factors ? Distribution channel structure ? Market share by petitor ? Industry profitability or economics 3 aaaaaa010807BJrefrigerator MARKET DEFINITION ? Product/service definition Supply (petitor) analysis Demand (customer) analysis Overall environment analysis Market definition Market assessment 4 aaaaaa010807BJrefrigerator PRODUCT SCOPE – WHITE GOODS Product group Product category Air conditioner Washing machine White goods Microwave ? Pack