United State of America market

1. Introduction to United State of America

The U.S. Census Bureau estimated the country's population to be 325,719,178 as of July 1, 2017, and to be adding 1 person (net gain) every 13 seconds, or about 6,646 people per day. Regards the analysis of cooking appliance market in US, the kitchen appliances market recovered from decline to post moderation growth in 2012 and 2013. Moderation decline is projected in 2014 before a return to moderation growth is forecast through to 2018. The US kitchen appliances market had total revenues of $22,963.7m in 2013 (Table 1), representing a compound annual growth rate (CAGR) of 0.6% between 2009 and 2013. In comparison, the European and Asia-Pacific markets grew with CAGRs of 1.1% and 9.6% respectively, over the same period, to reach respective values of $39,035.6m and $70,495.7m in 2013. Table 2 shows the market consumption volume which increased with a CAGR of 1.6% between 2009 and 2013, to reach a total of 55,474.4 thousand units in 2013. The market's volume is expected to rise to 58,215.5 thousand units by the end of 2018, representing a CAGR of 1% for the 2013-2018 periods. The refrigeration appliances segment was the market most lucrative in 2013, with total revenues of $8,143.7m, equivalent to 35.5% of the market's overall value. The washing appliances segment contributed revenues of $6,978.4m in 2013, equating to 30.4% of the market's aggregate value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 2.1% for the five-year period 2013 to 2018, which is expected to drive the market to a value of $25,502.0m by the end of 2018. Comparatively, the European and Asia-Pacific markets will grow with CAGRs of 4.5% and 9.2% respectively, over the same period, to reach respective values of $48,633.7m and $109,216.5m in 2018. From 2014 to 2016, the market capacity of smart home in the United States has been growing continuously in the recent three years from 2014, to 3.204 billion U.S. dollars in 2015 to 9.7125 billion U.S. dollars in 2016, the average annual increase of nearly 3 billion US dollars. There are five main areas for the breakdown of smart home in the United States: home automation, home security, home entertainment, environmental support, and life energy management. Among them, home automation, home security and home entertainment have the largest market capacity.

Table 3 shows the market segmentation analysis, refrigeration appliances are the largest segment of the kitchen appliances market in the United States, accounting for 35.5% of the market's total value. The washing appliances segment accounts for a further 30.4% of the market. By 2014, for example, home automation amounted to $ 769.9 million, home security was $ 838.8 million, home entertainment was $ 1.3321 billion, and environmental assistance was $ 0.829 billion, and life energy management was $ 382.6 million. The growth in the five segments in 2015 was as follows: Home Automation was 147.3%; Home Security System was 61.2%; Home Entertainment was 50.9%; Environment Aid was 92.2%; Living Energy Management was 56%. 6%. The number of smart home users in the United States was 2.8 million in 2014, up from 4.64 million in 2015, an increase of 1.84 million. This figure is expected to reach 7.37 million in 2016. In 2014, each family invested $ 1,213.7 in a smart home (not including smart home control devices such as smartphones, tablets, etc.), smart home connected devices such as smart TVs, refrigerators or ovens, Not included) to 2016 this figure is 1317.46 US dollars, three years change is not great. However, it is estimated that by 2020 this figure will be reduced to 853 U.S. dollars. People's specific expenses on smart families will not increase gradually. From the series of data given above, we can see that the United States is now at a stage of rapid development of a smart home. Among them, smart home device manufacturing is the main stage, and the smart home market in the United States is struggling

2. WDIRC selling

The forecast of WDIRC selling can be shown in Table 4 during the first ten years since product launched. Here the assumptions of households, occupancy ratio, initial sale, selling price, and manufacture cost are 133,957,180, 0.0060%, 8,037, 350 and 200, respectively. The first year is set as the baseline for comparison with the following years, the sale volume, year penetration, revenue, cost and profit are 8,037 (sets), 60 (ppm), 2,813,101(USD), 1,607,486 (USD) and 1,205,615 (USD), respectively. As we think, the growth rate with years will be 1, 3.55, 5.50, 7.06, 8.04, 8.18, 8.71, 9.73, 11.64 and 12 times over the first year. The year penetration of WDIRC will be from 60 ppm to 720 ppm at the end of tenth year, the totally ownership (penetration) is close to 0.452%, it still is a low penetration ratio in United State even WDIRC listed in market for ten years. However the revenue, manufacture cost and profit these three also present an ascending trend, the profit earned from United State is about $ 14.467 million at the tenth year in an exclusive market, it owns a huge market and profit in this market. Totally according to our prediction and assumption, the selling in United State will be up to 606,098 sets, even this; the penetration ratio is still lower than other consumption electric products such as TV, Refrigerator, Air conditioner, and Wash machine.

How about the annual growth rate for selling WDIRC in USA market; Fig. 3 shows the result. Here the calculation of revenue can use this equation as “WDIRC’s Revenue = Annual growth rate * Year + Baseline”, the formula can be written in a mathematic equation in Figure. According to this regression by data simulation, the annual growth rate it take about 3M per year (r² =0.9402), in other words, by averaged the annual revenue is $3M in USA market for selling WDIRC product.

3. Rice selling

A ten-years forecast to WFR sale, after WDIRC launched in United State market, is presented in Table 5. The first year since the marketing of WDIRC, online/offline deals for WFR sale are 6,952 kg, here the assumptions of population, rice consumption, sharing of WFR, online buying rate and market sharing are 324,118,787, 14.30, 0.01%, 5.00%, and 30%, respectively. How to calculate the WFR volume by online/offline sale, Eq. 1 is the equation for calculating the WFR sale volume.

Eq. 1 SaleVolume=Population x RiceConsumption x WFRratio x On/OffBuyingRatio x MSharingRatio

(eg. 6,952= 324,118,787 x 14.3 x 0.0001 x 0.05 x 0.3)

The use rate of WFR is set as 0.00002 kg/person-year. Based on this, we can get the annual revenue is $ 6,952 (WFR priced as $1), and the profitability is set to 10%, so the profit that will earn $ 695. Changing with the time, the ratio of WDIRC in kitchens will increase and cause the use of WFR increasing. We assumed the series of growth rate (G.R.) by years is 1, 6.30, 12.72, 19.43, 22.33, 24.37, 29.75, 35.40, 37.22 and 40.17. G.R. it is based on the prediction of WDIRC’s growth. By this series of G.R., both revenue and profit, they will also be presented like this serial when the dealing cost of WFR through online/offline transaction is keeping constant. Whatever the cost of online/offline transactions depends on the volume of WFR’s selling, so if the volume with time is scaling up, the dealing cost will be significantly lowered, in other words, the profitability with time will increase more than our prediction. If all hypotheses are true, the profit in tenth year will approach to $ 27,929. Eq. 2 calculates the penetration of WFR which to be used in this country by people. From this indicator (URate of WFR), we can see the level of penetration of WFR, even at the tenth year, the level of WFR use rate in USA is still underestimation, that’s meaningful for us to optimistically think, the use rate of WFR can be easy completed and it will be grew up more than our prediction.

Eq. 2 URate of WFR = SaleVolume of WFR / Population

(eg. 0.00002 = 6,952 / 324,118,787)

Regarding the revenue of WFR selling in USA, Fig. 4 shows the result. This is a prediction by data simulation according to our assumption, the regression could be calculated as “WFR’s revenue = Annual growth rate * Year + Baseline”. The result shows the annual growth rate is 30.142k per year (r²=0.9816), in other words, the increasing of revenue of WFR selling in USA is $30.142k dollar per year. This growth can help the company to maintain its team in the local market for servicing customers.

4. To summarize the revenue and profit

Here according to the estimations above, we summarize the incomes from sales of WDIRC and WFR in United State. Both revenues and profits are presented in Table 6. In the first year, the products of WDIRC and WFR are unfamiliar with American people; namely the recognition and acceptance aren’t well to local consumers, so on the beginning (1^st year) sales would be not good and the totally revenues and profits will be $ 2,820,053 and $ 1,206,310, respectively. Both of them will increase with years when selling with good experiences and promotions. Through our forecast, at the end of tenth year, the profits of WDIRC and WFR will be up to $ 14,467,350 and $ 27,929, and the totally profit will be $ 14,495,279, this is a huge profit which be created in Japan market by our novel products and services.

Totally the revenue of WDIRC and WFR (2W) selling in USA market can be shown in Figure 5. The 2W revenue in first year is 2.82 M dollars, after that the growth rate of revenue is 3M per year, this is a simple regression by mathematic model to predict the revenue on product selling. In practice, there are other factors that need to be considered much more, it could be higher than this or lower. Whatever by this calculation let us to trust that the market it always be there.