China is the world's largest exporter of personal grooming appliances. The country accounts for approximately 75 percent of all of the EU's imports, with China-made shavers making up more than 90 percent of the region's total imports of the product.
Further, more than 70 percent of personal grooming appliances imported into the US come from China. Hair dryers from China account for 82 percent of total US imports of the product.
China's 400 suppliers shipped out more than 305 million units of personal grooming appliances worth US$846 million in 2005. These included electric shavers, hair dryers, and hair styling apparatus such as hair straighteners and curling irons.
An overall increase in production costs has resulted in a slowdown in export volume growth, with total outbound shipments in 2005 increasing by less than 1 percent. The decline in exports is more apparent in the hair trimmer line, with shipments dropping by 13 percent.
But total export value went up 17.5 percent. Exports of electric shavers grew by 26 percent and the average unit prices increased 23 percent.
The higher growth rates for export value are indicative of the situation in the industry. Makers continue to face escalating raw material costs and now have to deal with even higher production expenses as they prepare to meet the EU's RoHS directives.
The following are some of the key trends we see in China's personal grooming appliances industry:
• The EU will remain China's largest export market even with the additional expenses makers will have to shoulder to export to the region. Complying with the RoHS directive can raise costs anywhere from 5 to 20 percent.
• Most makers will raise prices across all product categories in response to higher operating expenses.
• Many suppliers will increase the production of upscale appliances to become more competitive and gain higher profits. In the hair styling appliances line, product development is focused on models that can generate negative ions and ozone. For hair dryers, makers are developing designs with far infrared-emitting functions.
• Manufacturers will also increase focus on cordless and rechargeable personal grooming appliances, particularly for hair irons and hair dryers. This is in response to demand for units that are convenient to use, particularly during travel.
• Even though makers are shifting toward high-end products, the majority of personal grooming appliances exported from China will continue to be low-end and midrange.
Industry Overview
The majority of China's personal grooming appliance makers exporting to the EU are ready for the RoHS directive, which comes into effect in July 2006. However, meeting the requirements is driving up suppliers' production expenses, forcing them to increase export prices. The high cost of compliance is also posing a problem for companies with limited financial resources to invest in product and processes redesign. In addition, a few makers are still not aware of the implications of the directive.
The EU is China's main export market for personal grooming appliances, absorbing more than one third of total outbound shipments. For this reason, complying with the RoHS directive has become a major concern for China manufacturers.
Most personal grooming appliance makers in the country have already started working with buyers and testing institutes to develop products that meet RoHS guidelines. In this report, all but nine of the featured companies have initiated measures to produce RoHS compliant models.
Many of these manufacturers are now requiring their material suppliers to provide certification ensuring the quality and safety of the components. They are also asking for certification guaranteeing the materials contain only a minimum amount of lead, cadmium or mercury to comply with the RoHS directive.
The majority of suppliers, particularly the larger ones, have started to replace some components to meet the EU regulation as well. For example, Ni-Cd batteries used for electric shavers need to be replaced with Ni-H batteries. Using the latter will push up the cost of the finished product by about 20 percent.
Many suppliers are confident that there will be no shortage in the supply of RoHS-compliant materials. A few, however, are having difficulty sourcing some electric components. For example, there are only a few suppliers in China that can produce RoHS-compliant LCD panels used on high-end hair styling appliances. Even some Japan-made LCD panels are not RoHS compliant.
However, finding enough suppliers of compliant LCD panels is not a major issue as the component is not a main part of personal grooming appliances. But this means that makers can only develop a limited number of models with LCD panels for the EU market.
Apart from finding sources of compliant raw materials and components, manufacturers are maintaining separate assembly lines for personal grooming appliances that they sell to markets other than the EU. Buyers in other regions are not willing to pay higher prices for RoHS-compliant products. Adding another production line translates to an increase in the overall manufacturing expense for suppliers since they would need to hire additional workers to be assigned to the new line. Makers also need to have separate material stocks for the EU and other markets. Further, once appliances have been made RoHS compliant, they require testing, which is an additional expense.
Supplier Profile
Anionte Electric (Wenzhou) Co. Ltd
Anionte shipped US$8 million worth of personal grooming appliances in 2005.
The company makes these products in-house but also subcontracts to 50 factories specializing in personal grooming appliances. Exports of these subcontracted products accounted for 63 percent of total outbound shipments worth US$5 million in 2005.
All of the company's products are made for OEM clients and exported mainly to the EU.
At present, three of the company's hair straightener models carry the CE marking, while six have the UL mark.
Products
Hair straighteners are Anionte's main product, representing 40 percent of exports.
Prices of hair straighteners, ranging from US$2 to US$7, vary according to functions, sizes and materials. About 60 to 70 percent of the company's straighteners are midrange.
Low-end models are small, manually controlled and have low power. They have smaller plates compared with midrange and high-end models. These are only for home use.
Priced at US$4, midrange designs have digital thermal control systems that maintain temperature at a certain degree. When temperature decreases, the product automatically turns on and heats up.
High-end designs have ionic functions and LCD screens that show the temperature. Their plates are in various shapes and can be ceramic or titanium. Suitable for professional use, these models have a temperature of 140 to 200 C. The latest version has Teflon plates and is priced 10 percent more than regular hair straighteners.
Nose trimmers range from US$0.70 to US$2.50 each, with the popular models priced at US$1.
Three- to six-head shavers are also available for export. Production of models priced between US$2 and US$5 is subcontracted.
The 18-member R&D team uses AutoCAD and 3-D Max to produce four new models every month. It also works with an independent company to come up with new designs.
The R&D focus is on function and appearance. A new sample for clients can be made in one month.
Manufacturing
The company's factory in Longwan, Wenzhou, has 40 plastic-injection machines. Molds are made in-house.
All materials and a number of components, including ceramic and Teflon plates and circuits, are sourced locally. The company has no plans of importing these as they all meet quality standards.
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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