China home appliance makers poised for strong growth

Wuxi Little Swan and Gree Electric also posted first-quarter profit growth of more than 50 percent. Little Swan's 2014 profit is expected to grow by 36.7 percent, the strongest since 2010, while Gree's is forecast to rise 22.4 percent, according to analysts.

Sizzling sales for China's Gree

Home appliance market sluggish as subsidy expired

While the outlook for home appliance makers is positive, the outlook for retailers is overshadowed by the fiercely competitive online market.

GOME Electrical Appliances, which is backed by private equity fund Bain Capital, is expanding its business to online retailing from traditional stores. It said this week first-quarter profit surged 252.6 percent to 268 million yuan.

Analysts expect GOME's e-commerce net loss to narrow this year compared to an e-commerce net loss of 540 million yuan in 2013.

Its larger rival, Suning Commerce Group, China's top home appliance retailer by market value, reported a 433.5 million yuan loss for the first quarter, against a 492.8 million yuan profit a year earlier. Its e-commerce sales fell 26.7 percent to 3.3 billion yuan.

The benefits for companies who get their online strategy right are clear.

E-commerce transactions in China are projected to hit $540 billion by 2015, or approximately 10 percent of total retail transactions, according to KPMG's global China practice.

"I've bought almost all the things you can think of online. I just bought a toaster from Taobao last month," said Cherie Zhang, an administrative assistant for an education institute in Shanghai, referring to the Alibaba-owned online shopping site similar to eBay.