Weak consumer spending triggered by the pandemic has swollen inventories at Chinese home appliance manufacturers to the breaking point, reports Nikkei Asia. Combined inventories at five manufacturing groups jumped 15% on the year to RMB 98 billion ($14 billion) as of the end of June, a Nikkei survey of earnings statements shows, for a doubling over three years.
Inventories have grown much faster than revenues. At Gree Electric Appliances, which makes air conditioners, revenue rose just 5% on the year for the first half even as inventory shot up 28%. Nikkei looked at statements from Gree, appliance manufacturer Midea, refrigerator maker Haier, TV supplier TCL Electronics and two Hisense group companies.
Inventories are also ballooning on the retail side. At the big two, Gome Retail had an inventory turnover period of 81 days in the first half—50% longer than three years earlier. And Suning’s figure of 50 days in 2021 was 25% longer than in 2020.