The growth logic of low-voltage power distribution market and its outlook for the next five years
The author compiled the quarterly monitoring data of the low-voltage electrical appliance market in the past 10 years, combined with the interviews of dozens of industry insiders and relevant policy analysis, and made statistics and forecasts on the market size of the market from 2010 to 2025.
With the economic recovery after the epidemic, the 14th Five-Year Year, digitalization, and dual-carbon trends, it can be judged that the next five years will be a better growth cycle.
On the other hand, some of the basic laws can also be found in the reconsideration of the past market ups and downs.
China's low-voltage electrical appliance market scale-2010-2025E (100 million yuan)
Product category: frame circuit breaker, molded case circuit breaker, miniature circuit breaker contactor group
Dual power transfer switch, isolating switch, surge protector
Terminal distribution box, button switch, fuse
# Strong growth and weak growth alternate, the cycle is 2-4 years #
Except for a few negative years, the market is basically in a state of growth. Of course, there are strong and weak points. The strong range is between 7-15% and the weaker range is below 5%. This periodicity is about 2-4 years for a state switch.
The reason lies in the extremely wide application of low-voltage electrical products. Of the nearly 90 billion market, 38% are in construction, 19% in industrial projects, 14% in industrial OEM (machinery), 15% in power grid, 11% in infrastructure, and a small amount for individual users. Various customer needs such as existing real estate, industry, and government-invested power grids and infrastructure support each other. Therefore, although there have been many ups and downs in the macro economy, especially the industrial economy, and the construction market in the past ten years, these factors are superimposed and the probability of being negative at the same time is very small. It can also be seen from the performance of the data that the low-voltage electrical appliance market has shown strong resilience. Unlike some industrial products with more concentrated applications, they are extremely hot when it is hot, and the market will also show a large negative number when it is cold.
obviously, 2021 is the beginning of a positive economic cycle. To be precise, the market will begin to recover from the second half of 2020. The macroeconomic trend, as well as various branches-real estate, industry, power grid, and infrastructure, are showing a strong growth trend. Therefore, it can be predicted that in the next 5 years, at least 3 years, there is a high probability that the market will grow strongly.
# Large companies will have higher growth rates #
After decades of development, the market for low-voltage electrical appliances has become increasingly centralized. The number of small and medium-sized enterprises has begun to decline sharply. In the early years, a wave of power grid investment spawned thousands of enterprises in Liushi City to start construction has long since disappeared. Small enterprises may die or transform or merge into large enterprises to become a workshop. Even with the development of market competition, some companies with a certain scale and sales of tens of millions or even 100-200 million are in poor condition. From R&D to production to marketing, coupled with the continuous improvement of customer demand, the long battle line has left companies with insufficient resources behind step by step and eventually perishes.
Therefore, the industry leaders we will see, represented by Schneider and Chint (annual sales of tens of billions), have been growing faster than the market average. About 10 companies with sales in the range of 1 billion to 5 billion, their growth rates show volatility. If the rhythm is right, then it will be fast, and if the rhythm is wrong, then it will be slow. The CAGR for many years is slightly weaker than that of super-large enterprises.