In 2020, Hisense Europe group generated just under two billion euros in sales revenue, of which more than 97 percent was in the core business of household appliances. We generated one billion of the mentioned sales revenues in the markets of Western Europe, more than 800 million euros in Eastern Europe and the remaining part in the rest of the world.Production company Gorenje, d. o. o., generated EUR 1.19 billion in sales revenue last year, which is a 42.3 percent increase compared to 2019.
2020 was the first year of operation within the newly established Hisense Europe Group, which includes all our production, service, sales companies and subsidiaries in Europe and geographically covers Europe and the CIS region (Central and South-Eastern Europe, the Baltic States and the countries of the former Soviet Union). The corporate structure has been simplified, which enables more efficient business management, and business results have significantly improved since the second half of 2020.
In 2020, Hisense Europe group generated just under two billion euros in sales revenue, of which more than 97 percent was in the core business of household appliances. We generated one billion of the mentioned sales revenues in the markets of Western Europe, more than 800 million euros in Eastern Europe and the remaining part in the rest of the world.
Production company Gorenje, d. o. o., generated EUR 1.19 billion in sales revenue last year, which is a 42.3 percent increase compared to 2019. Gorenje's business performance in 2020 was strongly influenced by the completion of the integration process of the Hisense Group's operations in Europe (former Gorenje Group and Hisense companies based in Europe) into the new Hisense Europe group, the outbreak of the coronavirus pandemic, the optimization of various areas of operation and strong competition in the industry.
Last year was extremely demanding for production. From March to May, when the coronavirus epidemic swept across Europe, orders fell sharply (by as much as 65%), while three to four weeks of production shutdowns at all production sites led to extremely low levels of production and capacity utilization. With timely measures in response to the outbreak of the pandemic and the adjustment of sales strategies, we managed to create new opportunities and quickly increase sales and business volume. We were in close contact with our customers at all times and kept them informed on a daily basis about the state of supply chains in Europe and China.
We focused on online sales and took advantage of well-developed online business in several countries to expand our business. Thus, in a short period of time, we have significantly improved our online business, especially in Eastern Europe, and thus also increased our online sales across Europe by 53 percent (compared to 2019).
Significantly better second half of the year, increased market shares in all groups of household appliances
In the second half of 2020, the utilization of production capacity gradually increased and was more than 20 percentage points higher than in the same period in 2019. We succeeded in timely employment and training of more than a thousand new workers, in removal of technological bottlenecks and strong pressure on supply chain, where the advantages of the large corporation of which we are a part have become evident. In the face of supply and transportation problems from foreign suppliers in Europe, we worked with Hisense in China to accelerate the switch to Chinese suppliers, share resources, complement each other with scarce materials, and quickly establish a China-oriented support supply chain.
We also reduced production costs per standard unit by almost 10 percent, increased productivity by almost 20 percent, significantly improved the quality of appliances, and reduced working capital tied up in raw materials.In product management and R&D, we focused on improving product competitiveness through the launch of new products, on reducing product costs and reducing the complexity of models and platforms.
In 2020, we also significantly improved sales revenue per employee and transformed from a brand-focused organization into a functional organization with simplified management layers and an improved work structure that provides flexibility and rapid response in the current volatile and unpredictable global business environment, thus supporting the sustainable growth and development of the Hisense Europe group.
Nevertheless, we did not manage to completely compensate for the huge loss of sales from the first half of the year, so the Hisense Europe group ended 2020 with a loss of 12.8 million euros. Of this, Gorenje's loss amounted to EUR 11.5 million, a result which is EUR 48 million better than in 2019. Significantly better business results have been continuing since June 2020, as Hisense Europe group has continuously been making profit ever since. In 2020, we also increased our market share in Europe to 3.7 percent, both in the household appliances segment and in all our product groups, most noticeably in the cooling segment. By July 2021, we increased our market share even further.
Slovenia becomes Hisense's global R&D center for kitchen appliances
Last year, Hisense Europe group invested EUR 42 million in research and development activities, of which almost EUR 12 million in new product development. By investing in R&D, we are improving the competitiveness of our products to support growth and structural improvement in sales. We increased the number of R&D employees to close to 400. In June 2020, we established Hisense's global R&D center for the development of kitchen appliances in Velenje, which we are still staffing and employing engineers, graduate engineers and masters in mechanical engineering, electrical engineering, mechatronics and computer science.