(Yicai) May 13 -- Sales of floor cleaning machines in China surged in the first quarter of the year after Chinese manufacturers slashed prices to cope with fierce competition.

Floor cleaner sales volume jumped 50 percent to over 1.24 million units in the three months ended March 31 from a year earlier, with the sales value up 23 percent to CNY2.8 billion (USD387.1 million), according to statistics from All View Cloud Data Technology.

Floor cleaning machines priced at below CNY2,000 occupied a 44 percent share of the market in the first quarter, compared to 19 percent a year earlier and 38 percent in the previous quarter, according to AVC.

Online prices of floor cleaning machines in China fell nearly 20 percent to an average of CNY2,092 (USD290) in the first three months of the year from the same period last year, AVC data also showed. Offline prices dropped 7.3 percent to about CNY3,084 in the period.

Manufacturers’ main response to the fierce competition in the industry was lowering prices, including offering old floor cleaner models, including those of mainstream brands, at below CNY1,000 or even to under CNY600 (USD83), an industry insider told Yicai. Some manufacturers adopted other strategies, such as equipping their models with advanced functions while leaving prices unchanged.

The main reason behind the price cuts and sales promotions is that floor cleaning machines look very similar, so the price is a major factor determining the fate of the product, an analyst at AVC told Yicai.

Moreover, the decline in mold costs, the maturity of production technologies, and the rise in production capacity have effectively reduced production costs, leaving room for price cuts as manufacturers retain a high gross profit margin, a senior industry analyst told Yicai.

The Chinese floor cleaner market is approaching saturation, as competition intensified in recent years.

The sales growth of floor cleaners began to slow down in 2021, according to AVC data. The figure was 348 percent in 2021 but only 22 percent last year and 23 percent in the first quarter of this year.

The number of floor cleaning machine makers in the country declined for the first time ever in the first quarter to 143, compared with 167 in the fourth quarter of last year and 145 in the fourth quarter of 2022, mainly because of the fierce competition, according to AVC.

The average price of household floor cleaners may continue to fall during the upcoming 618 e-commerce shopping festival starting in late May. This may lead to an accelerated reshuffle in the industry and a further decline in the number of manufacturers, the senior industry analyst noted.

AVC predicted that China’s floor cleaning machine market size may reach CNY14 billion (USD1.9 billion) this year, up 15 percent from last year, meaning that the industry’s growth rate will continue to narrow this year.

Sales of floor cleaners are expected to jump nearly 29 percent to 6.5 million units this year from the year before, but the average sale price will likely decline 11 percent to CNY2,153, AVC predicted.

Editors: Tang Shihua, Futura Costaglione