China home appliance data weak in June, but leader resilience remains the key theme

Overview

This report discusses China's June AVC retail data for the home appliance industry. Industry retail sales declined 19% YoY in June, weakening further from the 9% YoY decline in May, while the two-year CAGR turned negative at 4%. The report believes that monthly momentum was weak, but because the replacement subsidy cycle created an uneven base, June should not simply be interpreted as a structural demand breakdown.

Core views

The core judgment is that June's weakness was more likely a cyclical disruption than a long-term structural collapse in demand. The fading subsidy impact, a high base from last year's rush purchases, cooler and wetter weather, and weak consumer sentiment collectively amplified the pressure in the data. The report's constructive views on Midea and Haier do not rely on an upswing in China's home appliance cycle, but rather on growth opportunities in their B2B and overseas businesses, with Midea remaining the preferred pick.

Analysis framework

The report uses AVC online and offline retail sales, volume, average selling price, and market share data to analyze total demand, channels, categories, volume-price decomposition, and changes in brand shares, and uses YoY and two-year CAGR comparisons to cross-check the noise caused by the high subsidy base.

Methodology notes

• Industry demand analysisYoY and two-year CAGR comparison

  Use one-year YoY growth and two-year CAGR together to assess underlying demand momentum

  Because home appliance replacement subsidies created an uneven base last year, monthly YoY figures may exaggerate the extent of declines or increases. The report therefore combines two-year CAGR data to assess whether demand has genuinely deteriorated.

• Volume-price decompositionVolume and ASP decomposition

  Distinguish volume normalization from lower prices and product mix

  The report believes white goods volumes were broadly stable on a two-year CAGR basis, indicating that demand has not collapsed; however, declining ASPs show that consumers are still opting for cheaper product mixes.

• Competitive landscape analysisCategory market share tracking

  Use shares in categories such as air conditioners, refrigerators, washing machines, and vacuum cleaners to assess leader resilience

  The report compares changes in the shares of Midea, Haier, Gree, Xiaomi, Ecovacs, and other brands across different categories to assess whether the leaders are maintaining their competitive advantages in a weak-demand environment.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Midea Group-A

  Core beneficiary/Report's preferred pick

  Strengths

  Overall share rose from 25.2% in May 2026 to 26.3% in June; air conditioner share increased to 34.9%, retaining the top position, while washing machine share also improved. The report highlights its B2B and overseas growth opportunities.

  Weaknesses

  Still exposed to weak Chinese home appliance consumption, subsidy tapering, and lower prices/product mix.

  Comparison

  Compared with Gree, Midea continued to gain air conditioner share in June; compared with Haier, the report names Midea as the preferred pick.

  Risks

  Domestic demand weaker than expected, intensifying price competition, overseas growth below expectations, and continued disruption from the subsidy cycle.

• Haier Smart Home Co Ltd-H

  Constructively covered stock

  Strengths

  Refrigerator share increased to 43.7%, with share gains across most categories; the report discloses that it maintains an OW rating.

  Weaknesses

  Overall share declined from 24.3% in May 2026 to 23.7% in June, affected by the increased weighting of the air conditioner category.

  Comparison

  Haier is stronger in refrigerators and washing machines, but its overall share in June was dragged down by the air conditioner mix; Midea was stronger in air conditioners and overall share.

  Risks

  Unfavorable category mix, weak domestic consumption, price declines, and market concerns about post-subsidy demand.

• Gree Electric Appliances-A

  Air conditioner competitor

  Strengths

  Still ranked second in air conditioners.

  Weaknesses

  Air conditioner market share declined from 29.7% in May 2026 to 25.4% in June.

  Comparison

  Compared with Midea, Gree's air conditioner share declined significantly.

  Risks

  Weak air conditioner demand, share losses, and price competition.

• Xiaomi

  Emerging competitor gaining air conditioner share

  Strengths

  Air conditioner share increased from 5.4% in May 2026 to 6.9% in June, driven by online promotions during the 6.18 shopping festival.

  Weaknesses

  Share remains significantly below that of Midea, Gree, and Haier.

  Comparison

  Online channel performance improved during the promotional period, but its scale remains smaller than that of traditional white goods leaders.

  Risks

  Sustainability of promotion-driven share gains and price competition.

• Ecovacs Robotics-A

  Vacuum cleaner/cleaning appliance leader

  Strengths

  The vacuum cleaner category grew against the trend in June, with Ecovacs' market share increasing from 29.1% in May 2026 to 31.0%.

  Weaknesses

  The report believes this performance was partly consistent with seasonal strength, and sustainability needs to be monitored.

  Comparison

  Vacuum cleaners were the most prominent positive category among home appliances in June.

  Risks

  Seasonal decline, slowing category growth, and intensifying competition.

Key data

• China home appliance retail sales in June-19% YoYAVC data, deteriorating further from -9% YoY in May.
• Two-year CAGR in June-4%Significantly weaker than +20% in May and +1% in April.
• 2Q26 retail sales YoY-15% YoYWeaker than -10% YoY in 1Q26.
• 2Q26 two-year CAGR+5%Improved from -1% in 1Q26, indicating that the quarterly trend was not deteriorating in one direction only.
• June online sales-16% YoYMay was -7% YoY; the two-year CAGR was -6%, versus +20% in May.
• June offline sales-22% YoYMay was -11% YoY; the two-year CAGR was -2%, versus +21% in May.
• Air conditioner sales-28% YoYThe largest drag in June; the two-year CAGR was -6%.
• Vacuum cleaner sales+13% YoYSignificantly outperformed other categories, with two-year CAGR growth of 43%, driven mainly by volume.
• Midea overall market share26.3%Above 25.2% in May 2026, mainly driven by seasonal strength in air conditioners.
• Haier overall market share23.7%Below 24.3% in May 2026, mainly due to the category mix impact from the increased share of air conditioners in June; share still improved in most categories.
• Midea air conditioner market share34.9%Above 33.2% in May 2026, retaining the top position.
• Gree air conditioner market share25.4%Below 29.7% in May 2026, ranking second.
• Haier refrigerator market share43.7%Above 40.0% in May 2026, mainly driven by increased share in online channels.

Impact & implications

The investment implication is that the June data will intensify market concerns about the sustainability of demand after subsidies taper off, but the report is inclined to interpret the weakness as cyclical and base-related noise. The more important themes are the leaders' share resilience, overseas expansion, and B2B growth in a weak-demand environment, rather than betting on domestic home appliance demand re-entering an upcycle.

Risks

• Demand weakness after subsidy tapering lasts longer than expected.
• Consumers continue to trade down into lower price bands, putting pressure on ASPs and profit margins.
• If the weak June data reflects structural demand weakness rather than weather or base-related noise, industry valuations will be impaired.
• Intensifying online promotions and price competition could reduce the quality of leader profitability.
• If overseas and B2B growth falls short of expectations, the non-domestic-cycle investment theses for Midea and Haier will be weakened.

What to watch

• Whether AVC data in subsequent months confirms that June was merely a one-month disruption.
• Air conditioner volume and ASP performance after weather normalizes or the base normalizes.
• Share trends for Midea and Haier in core categories including air conditioners, refrigerators, and washing machines.
• The pace of subsidy policies, demand brought forward by replacement purchases, and changes in consumer sentiment.
• The contribution of overseas and B2B businesses to Midea's and Haier's growth and earnings.