China's exports of massagers are rising and will continue to grow as an increasing number of foreign buyers discover the country's competitive pricing and more suppliers upgrade their products.
In the period January to July 2006, the country exported almost 58 million massagers worth US$395 million. This represents an increase of nearly 37 percent in value and 48 percent in volume.
If exports continue to grow at current rates, overseas shipments could exceed US$800 million easily by the end of 2006, and hit US$1 billion in 2007.
The industry, however, is facing a number of challenges that threaten to slow the steep export growth.
The following are some of the key trends we see in China's massager industry:
• Both output and exports will increase through 2007 as China makers prepare for greater overseas demand. Many companies will extend their product lineups to offer a wider range of massagers.
• Most suppliers will mark up export prices across all product categories in the next 12 months despite intensifying price competition. Increasing production costs, mainly the rising prices of raw materials and RoHS compliance, have reduced profit margins and are forcing China makers to adjust their quotes.
• The transition to RoHS-compliant products has been by and large smooth. In fact, most suppliers will continue to focus on the EU market in 2007. But many companies are complaining about the high cost of compliance, while a few have reported problems with finding suppliers of compliant components.
• Massage chairs will continue to dominate exports, but overseas shipments of handheld massagers and belts will rise substantially in coming months.
This report focuses on massage chairs, handheld massagers, massage belts, massage cushions, and foot and leg massagers — products that dominate exports of massagers from China.
The Products & Prices section describes the main materials used to make each type of massager and the significant factors that determine price and quality.
The Manufacturing section details the start-to-finish steps makers perform during production, and compares the manufacturing capability of small, midsize and large suppliers.
Key trends in design and functionality are discussed in the R&D section.
The Industry Overview analyzes the supplier base, differentiating companies and highlighting important market conditions and issues.
The majority of massager manufacturers in China are locally owned companies, while approximately 10 percent are joint ventures. Reflecting this industry structure, 84 percent of suppliers featured in this report are China-owned, and the rest are foreign invested companies.
The provinces of Zhejiang and Guangdong are the main massager production hubs in China. To represent the industry accurately, 35 percent of companies featured in this report are from Zhejiang, while 29 percent are based in Guangdong.
Industry Overview
China's massagers export industry is flourishing, as reflected by the steep and steady export growth in recent years. Despite the challenges posed by fluctuating raw material costs and the RoHS directive that took effect July of this year, suppliers in the country are optimistic the high export growth is sustainable in the years ahead.
In 2005, China's overseas revenue in the line soared almost 49 percent to reach US$612 million. This growth rate is nearly 20 percentage points higher than in 2004. Further, export sales in the first seven months of 2006 reached US$395 million, up 37 percent over the previous corresponding period.
If exports continue to grow at current rates, overseas shipments could top US$800 million by the end of 2006, and nudge the US$1-billion mark in 2007. Several factors, however, may impact this growth, including the effects of RoHS on exports to the EU and continued price increases that could slow growth in large markets such as the US.
Commodity trade statistics from the UN show that China is currently the world's top exporter of massage apparatus, with its outbound shipments contributing more than 27 percent to global exports in 2005. The US follows, accounting for almost 12 percent while the EU is third with close to 10 percent.
One of the main factors driving China's exports is the increasing confidence foreign buyers have in China-made products. As the industry matures, and more suppliers enhance the quality of their products, more buyers will source from the country. In fact, many buyers sourcing in Japan have shifted their procurement to China, where similar designs are available at more competitive prices.
In particular, overseas demand for massage chairs is booming. Several years ago, massage chairs were targeted primarily at high-end markets and the elderly in need for home relaxation devices. But the increased production of cheaper massage chairs led to higher demand among young consumers.
China makers are likewise fast taking over the electronic handheld massagers segment. Companies are producing handheld units in notably high volumes, with some specialists churning out as many as 200,000 pieces per month. This dominance has, in fact, forced several Taiwan makers to exit the handheld massager line and instead focus on the more technology intensive massage chair or foot massager lines.
Due to the relatively simple structure of handheld massagers and the uncomplicated production steps involved in making them, this segment presents a low-entry barrier, thereby attracting new companies — especially small ones — to join in. It is estimated the supplier base is growing 10 to 20 percent annually. China's upbeat massager industry, however, is faced with challenges that could hinder the robust export growth.
Supplier Profile
Fuzhou Jiawei Electronic Co. Ltd
Fuzhou Jiawei started as a molding company in 1994 and later branched out into massagers. In fact, nearly 90 percent of the company's total revenue in 2005 came from the sales of handheld massagers, and massage chairs, belts, cushions and pillows. Foot spa products are also offered.
Fuzhou Jiawei's strong background in mold development gives it an edge over other makers who do not carry out these steps themselves.
Products
Massage chairs from Fuzhou Jiawei are mainly midrange and high-end models that sell for US$100 to US$780.
The US$100 models have kneading, rolling and percussion functions. The more expensive versions are bigger and feature 17 massage actions with more than 40 combinations. Priced at about US$780, they are said to provide massages that feel similar to those done by human hands. Designs can be equipped with a 128MB MP3 player.
Handheld massagers from the company have ABS housings and perform kneading, percussion and rolling functions. Prices range from US$7 to US$12.
The company will be using a new type of plastic in making transmission gears for massage chairs and handheld massagers. The material is said to reduce friction and overheating even without any lubricant, thereby minimizing noise. Although this plastic costs much more than the one currently used, the massager will last for three years more than models in regular plastic.
Manufacturing
Fuzhou Jiawei's factory, located 20 minutes away from downtown Fuzhou, is equipped with molding, plastic-injection and electronics-processing machines. The facility has a capacity to produce 80,000 handheld massagers, 2,000 massage chairs and 1,000 cushions monthly.
Foot spa models, handheld massagers, cushions and massage chairs are produced in one assembly line, as they undergo similar processes.
Molding and plastic injection are done on the first floor. This workshop has 20 mold-making machines, five Haitian heavy-duty plastic-injection machines and 20 other light-duty ones.
Locally sourced steel for massage chairs is cut and bent according to specifications, then welded. After this, the pieces are painted in a subcontracting factory. Program development, electronic design and production, and cover stitching are conducted in-house.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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