The export of massage equipment increased by 60%, and the overseas market entered a period of rapid growth

Customs data show that the export amount of massage apparatus from June to August is 8.158 billion yuan, up 63.65% year on year, which is much higher than the previous level. Caixin has learned from a-share listed companies and brokerage offices that besides the epidemic, it is also related to the rapid development of foreign developed markets, and the epidemic has also accelerated the penetration of cross-border e-commerce into this field.

At a time of rapid growth overseas, Bodyfriend, which accounts for nearly 70 per cent of the Market, is embroiled in a safety scandal involving massage chairs in South Korea. The reporter noticed that most of the massage chairs sold in South Korea were produced by China. Bodyfriend80 per cent of its purchases come from Rongtai Health, an A-share company. In this regard, Rongtai health secretary responded to the reporter of the Financial Association so responded... The company supplies BodyFriend's products with sensors in key areas, and the security measures are better in place without problems, it said.

The homestead economy has triggered overseas demand

In terms of specific export amount, from June to August, the export amount of massage apparatus was 2.554 billion yuan, 2.84 billion yuan and 2.764 billion yuan respectively, with year-on-year increases of 61.74%, 74.12% and 55.73%. In terms of quantity, from June to August, the export volume of massage instruments was 28.696,000 units, 29.1472 units and 30,517,600 units, with year-on-year increases of 46.16%, 45.12% and 27.73%, respectively. From 2017 to 2019, the export value of domestic massage chairs increased from US $2.285 billion to US $3.047 billion, an increase of 33.3% in three years.

It can be seen that the growth rate of the export value of massage apparatus is significantly higher than that of the quantity, especially in August. What's behind it?

"This year's outbreak has had a direct stimulative effect on the market." Qin Yichao, chief home appliance analyst at Huachuang Securities, explained to Caixin that less travel and more experience time at home will increase demand for household appliances such as massage chairs. In addition, the penetration rate of overseas developed countries is about 15%, which is in the period of rapid rise, which is also a factor for the rapid growth of exports.

Southwest Securities said that due to the impact of the epidemic in the first half of 2020, overseas homes have become the norm. Some overseas enterprises have certain amount of reimbursement or subsidies for office supplies, and the government will also issue economic stimulus checks with subsidies, which fully releases overseas C-end demand.

The rise in demand from the sedentary economy is evident in South Korea, where the epidemic began earlier, where demand for massage chairs increased in the first half of the year. 'The Korean market grew well in the first half,' Mr. Ying told reporters. 'Our supply to a Korean customer, Bodyfriend, rose more than 30%.' In the first half of this year, the sales amount of Massage chair of Henglin stock increased 197% year on year. Chen Jianfu, secretary of the company's President, told reporters that the company's massage chair products are mainly aimed at the high-end market of South Korea and the United States. In addition, after the introduction of the new team, the independent brand has gradually been recognized.

As for the export growth rate, qin Yichao said: "This shows that the proportion of middle and high-end products in exports has increased, and the overseas market demand is growing towards middle and high-end demand. In addition, overseas factories were shut down during the epidemic. The domestic market has a wider coverage of the supply chain, and the simplification of supply will make domestic manufacturers more powerful and have stronger bargaining power."

E-commerce is accelerating

It is understood that the massage appliance industry originated in Japan in the 1960s and began to expand overseas in the 1980s and 1990s, first entering east Asia and Southeast Asia markets similar to Japanese culture, and then entering Europe and the United States. In the 21st century, the production capacity of massage instruments has been transferred to China. Thanks to the cost advantage brought by demographic dividend, China has quickly become a global center of research, development and manufacturing of massage instruments. In terms of regions, massage instruments are mainly sold to the United States, South Korea and Japan, accounting for 27%, 14% and 10% respectively in 2019. At present, China's domestic massage appliance industry is still in its infancy, with a penetration rate of about 1%.

The reporter noted that the epidemic on the massage chair market, in addition to the skyrocketing demand, the impact on the distribution channel is also showing. Data show that most of the increase in the export of massage chairs is realized by cross-border e-commerce. According to the data of Domestic taobao, the online retail volume of massage chairs in China in the first half of 2020 increased by 68% compared with the same period last year. In recent years, according to Tmall monitoring, the sales of rongtai and aojiahua in Tmall in 2020Q2 increased by 79% and 84% year-on-year respectively.

"There is a trend of all home appliances being sold online, and the development of the epidemic must have accelerated the shift online." Qin Yichao told reporters that after the outbreak, there may be some recovery offline, but the online retention rate will definitely be higher than the offline recovery. For massage chairs, offline sales are not going to die in the short term, because experience is an important point.

Chen Jianfu told reporters: "The outbreak of the epidemic has promoted the development of cross-border e-commerce massage chairs. In turn, domestic foreign trade manufacturers have started to make their own brands through cross-border e-commerce, gradually getting rid of the low gross profit of OEM factories, and their premium ability has been constantly enhanced."

The outlook is clouded by safety concerns

A recent safety scandal in South Korea, which comes amid a sharp rise in exports of massage chairs, could throw into doubt exports in the second half of the year.

According to CCTV, the Consumer Institute of South Korea sampled three representative products of the country's three major massage chair brands and found that they all had serious safety risks. The price of these three products is around 4 million won (about 23,000 yuan), belonging to the south Korean market in the high-end household massage chair products. When the massage part of the legs of these massage chairs adjusts the space according to the user's body shape, because there is no sensor installed in the stretching part or the sensor is not sensitive, once the body is clamped, it is very easy to be clipped, and in serious cases, it may even lead to fracture. It is reported that Bodyfriend's customized massage chair for teenagers is also sold on Chinese e-commerce platforms, so consumers should be cautious in purchasing.

The reporter noticed that the massage chair products of South Korea are mostly produced or exported by China. Bodyfriend, the no. 1 brand with the highest market share in South Korea, is supplied by A domestic company, Rongtai Health. "Our company supplies Bodyfriend's products with sensors in key parts," Ying Jiansen, secretary to rongtai Health, told reporters. "Our safety measures are in place and there will be no problems. According to reports, our company has a much higher control over safety and quality than that of bodyfriend."

As for the company, Ying told reporters that 15% to 20% of Bodyfriend's annual purchases in South Korea are not from Yung Tae, and it was unclear which supplier was responsible for the products in question. In addition, More than 80 percent of BodyFriend's massage chairs are supplied by the company, and Bodyfriend procured more than 100,000 massage chairs from the company in 2019, accounting for more than 80 percent of the company's total sales, Ying said in an interview.

How the safety scandal will impact Bodyfriend's market performance in the second half of the year, Mr Ying said: "The percentage of sales that went wrong in the first place is certainly not high and there is no problem with the mainstream products supplied by Rongtai." He added: "We believe that the south Korean law is relatively complete. If there is a problem, Yung Tae-health will make a proper settlement according to the law. So far, the entire sales of Korean customers have not been affected."

Chen Jianfu, secretary of the Board of Directors of Henglin, told reporters: "The 23,000 product is definitely not ours. Our own Brand, Nouhaus, is focused on The Korean and US markets. Our massage chair products are priced around 12,000 in Korea and sales are growing very well."

The impact of the security risks will depend on the extent of fermentation in South Korea, qin said, adding that the impact needs to be confirmed. But, he added, 'it's an evolving industry, and it may have a short-term impact, but the long-term trend won't change.'