(Yicai Global) March 21 -- Many Chinese home appliance manufacturers are automating their production lines, digitizing their operations, adopting the live sales model and carrying out other upgrades in order to stay on top of a rapidly changing market.

Midea Group upgraded its home air conditioning factory to an industrial Internet system last year, become one of the first factories in Shunde district, Foshan city with fifth-generation mobile network capabilities, Xu Yaqing, director of the factory’s production department, told an Yicai Global reporter who was visiting the area in southern Guangdong province, where many of China’s biggest white goods makers are based.

The product quality, production cost, safety, efficiency and output of each production line is now displayed in real time at the factory’s 5G Big Data center, Xu said. The production lead time has been halved to 40 days and between 80 percent and 90 percent of products destined for the China market are loaded onto trucks the moment they are finished, whereas before they often were left in warehouses for up to a month.

Most of the repetitive work in the factory has been automated, said Ma Kai, director of the plant’s engineering department. There are now between 200 and 300 robots working on production lines, and labor costs are expected to fall 10 percent this year. As the use of robots grows, some areas of the factory will be completely unmanned in the future, he added.

At Galanz’s smart microwave plant the reporter saw more than a dozen robots working along an assembly line and only one human worker at the end, checking the quality of the finished products.

The firm’s dishwasher factory has six new fully automated production lines that only need one worker per line to supervise, the person in charge at the factory said. We are gradually changing from a few people on one production line to one person monitoring several production lines, he added.

“As products and machinery become more high-end, the workforce also needs to be more highly skilled,” the person said. As a result, companies have been increasing employees’ salaries in recent years and investing more in training.

Salaries at Midea’s aircon factory have jumped more than 20 percent in the past three years, Xu said, adding that front-line employees receive about CNY5,000 (USD727) per month.

Shifting Strategy

The development strategy of the factory is changing from the previous “emphasis on quantity” to “stressing quality,” Xu said. Although some orders are quite large, they don’t boost profits much, so the factory stays flexible in accepting them. On the other hand, although some orders are small, they are more profitable and the factory will give them priority.

The plant is hiking investment in research and development to make more quality products, Xu said. Midea’s home aircon division has invested CNY1 billion (USD150 million) in a R&D hub that should be ready this year, and it is planning to recruit more than 100 doctorate-level researchers to enhance its R&D strength and produce more advanced products.

AI scanning technology is being used to strictly check the quality of finished products in order to ensure excellent quality control, Ma said.

Live Sales

Many home appliance makers in Shunde are turning to livestreaming to help sell their products. Galanz’s factory has more than 10 live sales studies for overseas customers alone.

Each studio is live for around 15 and a half hours a day and they are staffed in shifts by live sales hosts, the person in charge of Galanz’s livestreamed e-commerce department said. Next, the firm will introduce virtual hosts.

Midea’s online stores sold thousands of sweeping robots to customers in Spain, France and Russia at the beginning of the year, said Xiu Yang, head of overseas sales of the automated sweepers. Once the robots were launched on Aliexpress, Alibaba Group Holding's global sales platform, some CNY10 million (USD1.5 million) worth was sold in less than a year.

Going Global

Many white goods makers are also shifting production overseas. Midea’s home aircon department will build a new base abroad this year, and it is still selecting a location, Ma said. At present, Midea has more than 10 overseas subsidiaries, and its products are available in over 200 countries and regions.

Vanward is setting up a factory in Thailand which should be ready in 2024, and the products will mainly be exported to Europe and the US, Chairman Lu Yucong said. The firm is also planning to build a plant in Egypt to make hot water geysers. The products from this production base can supply not only the European and Asian markets but also the rest of the world.

Editors: Tang Shihua, Kim Taylor