As a leading brand in the small home appliances industry with a staggering revenue of $4.1 billion in 2022, fueled by the popularity of its internet-famous yoghurt maker, Little Bear Appliances finds itself needing to explore overseas markets as domestic small appliance consumption begins to plateau.
In this article, we’ll delve into Little Bear Appliances’ journey and analyze its strategic shifts towards international expansion. How did Little Bear Appliances achieve rapid sales growth overseas and double its revenue in a short period?
By leveraging its hit product to expand its product matrix.
Founded in 2006 by CEO Li Yifeng, Little Bear Appliances Co., Ltd. dodged the crowded landscape of major domestic appliances dominated by giants like Haier, Midea, and Gree. Instead, it entered the market through the realm of small appliances, introducing its yoghurt maker. At that time, yoghurt makers were mostly imported and considered high-end, catering to a niche market.
By seizing the opportunity, Little Bear Appliances quickly garnered attention in the market. In 2008, as Taobao e-commerce started rising, while many enterprises adopted a wait-and-see approach, Little Bear Appliances, with keen market insight, chose to collaborate with Taobao and established an “authorized online distribution” model.
Subsequently, capitalizing on the rapid expansion of e-commerce, Little Bear Appliances experienced significant growth. Between 2007 and 2009, its revenue surged from 20 million to 80 million yuan. By 2016, it had crossed the 1 billion yuan mark.
After breaking through with its flagship product, Little Bear Appliances gradually shifted from non-essential to essential home appliances. It actively developed and launched new products to maintain brand sales growth and vitality, adopting a multi-category development strategy:
- On one hand, Little Bear Appliances expanded horizontally across small appliance categories, tapping into various usage scenarios and consumer habits to develop innovative products like self-heating lunch boxes and self-heating cups.
- On the other hand, it iteratively upgraded existing products based on user feedback, introducing new products tailored to consumer preferences, such as small-capacity rice cookers and quiet blending machines.
Currently, Little Bear Appliances boasts over 60 product categories and 500 SKUs. Among them, categories like health pots, meat grinders, and yogurt makers have consistently held significant market positions.
Seizing the opportunities of the e-commerce era while avoiding intense competition, Little Bear Appliances has excelled in the small home appliance arena with its multi-category strategy. This approach has established it as a leading enterprise with stable revenues reaching tens of billions.
The cooling demand in the small home appliance market
According to DeepTech New Consumption, the once fervently pursued small home appliance market in 2022 suddenly found itself in the eye of a storm. Due to less stringent quality testing compared to general home appliances, some opportunists sacrificed quality for low prices, disrupting the market’s original rules and causing a sudden downturn in the entire small home appliance industry.
Simultaneously, issues with quality due to malicious competition have been frequently exposed by the media and associations. The Jiangsu Consumer Council released a report analyzing mini small home appliances, involving 50 batches of 4 categories of mini small home appliances sold in the market. The failure rate in safety and performance tests was alarming. With uneven product quality and further diminished reputation due to overstretching of word-of-mouth, repercussions followed one after another. Furthermore, after-sales service for small home appliances has caused a crisis of trust between consumers and sellers. Consumers often encounter problems such as difficulty in repair and poor experience. Repair shops are reluctant to accept small home appliance repairs due to the time-consuming and low-profit nature of the work. Moreover, various brands’ products have non-compatible spare parts, leading to small home appliances being treated as “disposable.” Although Little Bear Appliances has maintained its reputation at the forefront of the trust crisis battle with solid quality and service, the contraction of the small home appliance market still poses a challenge to its performance. On the other hand, Little Bear Appliances’ small home appliance products have characteristics such as low unit price, low purchase frequency, low repurchase rate, and low technological barriers. For mainstream major home appliance brands like Midea and Haier, Little Bear Appliances doesn’t pose a strong competitive advantage, and the expansion speed of its business has slowed down in recent years due to the cooling trend of small home appliances.
Seeing the growth bottleneck in the domestic small home appliance market, Little Bear Appliances has gradually started exploring new possibilities in overseas markets, expanding its business focus to new territories. Adapting to local conditions, seeking new growth.
New market possibilities
In May 2022, Little Bear Appliances stated on the investor interaction platform that with the enhancement of product capabilities and manufacturing capabilities, it would persist in expanding overseas business in the long term.
The company’s overseas business is currently divided into three parts: traditional ODM contract manufacturing, self-owned brand expansion overseas, and cross-border e-commerce. Previously, it mainly focused on ODM, but now the proportion of brand expansion overseas is gradually increasing. Brand expansion overseas mainly involves finding distributors in various Southeast Asian countries to enter the market, while cross-border e-commerce mainly focuses on platforms such as Amazon’s US and European sites.
In Southeast Asia, Little Bear Appliances opts for brand expansion overseas because of its proximity and the large population of ethnic Chinese in Southeast Asia. Little Bear Appliances has a certain degree of local popularity in Southeast Asia, and consumer habits in Southeast Asia are similar to those in China, so the categories sold in China can be directly introduced to the market.
In countries such as Vietnam and Malaysia, Little Bear Appliances has established separate independent sites, which not only conform to local language habits but also hold promotional activities according to local festivals. At the same time, the traffic of independent sites is mainly driven by natural search (26%) and social traffic (68%), indicating the brand effect and social media effect of Little Bear Appliances in the Southeast Asian market.
In addition to independent sites, TikTok and Facebook are also the main promotion platforms in the Southeast Asian market. Little Bear Appliances’ Facebook accounts in Malaysia and Vietnam have 150,000 and 18,000 followers, respectively, while the official TikTok account in Vietnam has reached 360,000 followers, and it is keen on online live streaming. Not only does it interact closely with overseas users to cultivate user stickiness, but it also achieves a leap in sales.
In Europe and the United States, Little Bear Appliances’ sales channels mainly rely on Amazon e-commerce. Little Bear Appliances does not have a significant brand advantage in Europe and America, but in some categories, its innovative small home appliances have attracted a large number of customers due to their differentiated functions and appearance.
For example, Little Bear Appliances’ baby food maker ranks first in the baby food category BSR on Amazon, with monthly sales of 4,000 units. For European and American users, Little Bear Appliances’ concise, clearly divided functional design can meet the needs of home scenarios, and its pure electric mode can also help free hands, making it popular in Europe and America.
In addition to baby food makers, a series of innovative small home appliances such as yogurt makers, air fryers, and juicers, which are convenient and functionally clear, also rank high in the Amazon category BSR list, achieving good sales performance.
In essence, home appliances are a “curly” industry. In a home appliance market with intense competition and severe homogenization, it not only tests the core competitiveness – product strength and differentiation but also tests the adaptability of home appliance brands to information iteration. In today’s globalized market, brand expansion overseas is the trend, and the complex and unknown overseas market tests the operational strategies.
