Europeans Chop Wood for Winter as Chinese Heating Products Come to the Rescue: 1.29 Million Electric Blankets Exported in One Month; Rainbow Group Hits the Daily Limit Twice
As autumn arrives in the Northern Hemisphere, people across higher-latitude Europe are already feeling the chill. With natural gas supplies constrained and prices soaring, Europeans are having to look for other ways to heat their homes this winter, such as buying firewood and coal. At the same time, many are turning their attention to China—a country where winters can also be cold, but where many areas still lack centralized heating. A variety of heating appliances made in China have become a new option for them.
Any ripple in the international trade market can catch the attention of astute investors. Recently, Rainbow Group (003023.SZ), a long-established listed small-appliance maker, has suddenly made headlines. On September 22, its shares surged in a straight line shortly after the market opened and hit the daily limit for the second consecutive session, closing at 23.84 yuan per share—a nearly one-year high. In fact, Rainbow Group’s shares have gained more than 40% over the past three months.
Rainbow Group shares hit the daily limit for two consecutive sessions Company responds
On the evening of September 22, Rainbow Group issued an announcement on abnormal stock trading fluctuations. The announcement said that there had been no major changes in the company’s recent operations or its internal and external operating environment, and that production and business activities were proceeding normally. Its main products include electric blankets, electric hand warmers and other household soft heating appliances, as well as electric mosquito repellent liquid and electric mosquito repellent mats. The products are primarily sold in the domestic market. To develop its export business, the company has established an overseas market development department and service team to handle exports. This year, it has received some export orders for electric blankets, but the quantities per order were low and the total value was small, with no material impact on the company’s revenue.
According to company information, Chengdu Rainbow Electrical Appliance (Group) Co., Ltd. is a corporate group primarily engaged in the research and development, production and sales of household soft heating appliances, including electric blankets and electric hand warmers, as well as household sanitary insecticides such as electric mosquito repellent liquid and insecticide aerosol. It is a leading company in China’s electric blanket industry and a key enterprise in the household sanitary insecticide sector.
Data from the China Household Electrical Appliances Association show that while exports of most home appliance products to Europe declined in 2022, exports of air conditioners, electric water heaters, electric heaters, electric blankets and hair dryers bucked the trend. From January to July, their cumulative export values were US$1.99 billion, US$130 million, US$490 million, US$33.4 million and US$160 million, respectively. Electric blankets led the way by far, with growth of 97%.
According to Securities Times, data from the General Administration of Customs also confirm the sharp increase in European demand for electric blankets. In January this year, the 27 EU member states imported 189,000 electric blankets from China. The monthly figure rose to 521,000 in June, then surged to 1.29 million in July, up nearly 150% month over month.
On September 13, Rainbow Group said on the Shenzhen Stock Exchange’s Interactive Platform: “Europe is currently facing an energy crisis, which could create opportunities for electric blankets as an energy-efficient and environmentally friendly product. Since May, the company has received a number of export orders for electric blankets.”
The strong sales of Chinese heating appliances come as Europe braces for another winter of energy challenges. With energy prices soaring, unaffordable bills are forcing consumers to seek more energy-efficient alternatives. Some reports have even said that European buyers began stockpiling firewood for winter heating as early as summer, driving up firewood prices in many parts of Europe.
European importers rush to place additional orders
According to a September 22 report by CCTV Finance, Cixi City in Ningbo, Zhejiang Province, is one of China’s major production bases for heaters, accounting for 30% of the country’s exports. In previous years, the peak season for heater production for export ended around mid-September. This year, however, factors such as the Russia-Ukraine conflict and the energy crisis have constrained natural gas use in many European countries, driving sustained growth in demand for various types of heaters. Many importers have placed additional orders at short notice, triggering a new wave of order top-ups.
In Guanhaiwei Town, Cixi City, Ningbo, Zhejiang Province, a company is working overtime to produce a batch of portable household heaters. The company’s representative said the customer was based in Germany. The original US$1 million order, signed at the beginning of the year, had already been shipped in full, but in August the customer requested an additional order worth US$330,000.
The company exported a total of 1.5 million heaters last year, worth approximately US$17.8 million. In the first eight months of this year, it had already exported 2 million heaters, worth approximately US$22.8 million—an increase of nearly 30%.
A similar trend can also be seen among other heater exporters. One company in Xinpu Town, Cixi, exported heaters worth about RMB 160 million last year and expects exports to exceed RMB 200 million this year, with customers having placed more than RMB 20 million in additional orders.
Xu Songlie, general manager of an electrical appliance company in Cixi, Zhejiang, said, “Europe and the United States are our main markets. Europe accounts for a relatively large share, around 70%–80%. Heaters of this type currently rank first in terms of export volume across the market.”
Cixi is currently home to more than 100 heater manufacturers, whose exports account for 30% of the national total. Customs statistics show that heater exports rose sharply in the first eight months of this year, with exports to the EU increasing by more than 50%.
