Moderate growth registered over the review period
Overall growth in consumer appliances remained moderate over the last five years; mostly affected by a sharp decline in volume sales in 2009, at the height of the recession. The market has since been recovering steadily, albeit gradually, as consumer confidence is slowly returning and incomes are growing. During the recession and the years that followed, many consumers opted to hold onto their appliances and not replace them as often, or simply did not buy new ones at all. Built-in appliances in particular took a major hit, as these are often more expensive, and sales were negatively affected by the low home ownership rate in the period 2009-2011.
Sales witness healthy growth in 2014 as the economy recovers
In 2014 consumer appliances saw healthy current value and volume growth, influenced by the recovering economy, which saw healthy GDP growth translate into higher disposable incomes in the country. This in turn pushed consumer confidence higher, restoring it to its pre-recession level. This prompted many consumers to resume buying consumer appliances; replacing old appliances as well as experimenting with new, more sophisticated appliances. This was especially the case within refrigeration appliances and air treatment products, in which new technologies served to attract consumers who were willing to pay more. The premiumisation trend was witnessed across different categories, including built-in appliances, which was also positively affected by rising home ownership.
Multinational brands continue to dominate the market in 2014
The long-standing presence of multinational brands in the country, coupled with their frequent product launches and innovation, contributed to their success. Most have strong international brand names to leverage, which translated into them being widely trusted and recognised in the country. Leading brands in 2014 included Philips, Samsung, LG, Kenwood and Panasonic, amongst others. These brands invest heavily in television advertising on local and regional channels, and run frequent price promotions; this ensures their dominance.
Electronics and appliance specialist retailers leads distribution in 2014, whilst hypermarkets continues to grow
Although electronics and appliance specialist retailers continued to lead distribution in 2014, due to the long-standing and widespread presence of such outlets in the country, this channel saw its share increase at a very slow pace in 2014. Meanwhile, hypermarkets registered strong growth in 2014, due to the expanding number of chains opening up across the country, in addition to the strong price promotions that these outlets run on appliances, especially around the month of Ramadan. Increasingly hectic lifestyles prompted consumers to opt for the one-stop-shop that hypermarkets offer, rather than visiting different specialist outlets for their needs.
Healthy growth expected over the next five years
Healthy volume growth and value growth at constant 2014 prices is expected over the next five years for consumer appliances. This will be supported by strong economic and GDP growth, pushed by rising oil revenues in the country. Also, religious tourism is set to expand further, in line with the government’s investment in expanding and improving the tourism infrastructure, which started in 2013 and is set to continue. Rising home ownership on the back of new mortgage legislation will also push the growth of built-in appliances and heating appliances, as well as shortening the replacement cycle of products such as vacuum cleaners.
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The Consumer Appliances in Saudi Arabia market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
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- What are the major brands in Saudi Arabia?
- How was category performance been affected by current economic climate?
- How is penetration for consumer appliances going to develop over the medium term?
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This industry report originates from Passport, our Consumer Appliances market research database.