Growth picks up during review period as economic confidence rises
Consumer appliances saw decline in 2009 over the previous year, as the global economic downturn encouraged consumers to save rather than to spend. However, as Saudi Arabia continued to see a strong economic performance for the remainder of the review period, disposable income levels rose and annual retail volume growth rates increased. 2013 saw the strongest retail volume performance of the review period for overall consumer appliances. Consumers became more willing to spend on high-priced items such as refrigeration appliances and large cooking appliances and also more likely to make impulse purchases of lower-priced items such as kettles or blenders.
Housing situation continues to impact sales
Saudi Arabia continued to face a severe housing shortage of around two million homes at the end of the review period, with many households thus being overcrowded. This results in many homes having little free space, with consumers thus being attracted by compact and multifunctional products and also being reluctant to buy a wider range of consumer appliances. Low levels of home ownership in the country also have an impact on sales, resulting in limited interest in built-in major appliances as consumers are keen to be able to take these products with them if they move home. The government however introduced the country's first mortgage legislation in 2012, while the end of the review period saw a marked rise in residential construction. Home ownership levels may thus rise while the housing shortage is expected to ease in the forecast period.
Local representatives of strong global brands lead sales
The leading players in consumer appliances in Saudi Arabia are local players that understand the country's sales conditions and consumer needs. However, these players typically opt to offer strong global brands, with these being most popular among consumers in the country. Leader United Yousef M Naghi for example offers Philips and LG, while the second-ranked brand Samsung is represented by United Matbouli. With rising disposable income levels, many consumers traded up to the leading brands in 2013, resulting in share consolidation for overall consumer appliances.
Hypermarkets poses strong competition to electronics and appliance specialist retailers
Electronics and appliance specialist retailers continued to be the leading distribution channel in consumer appliances during the review period, thanks to offering the widest product range, expert advice and strong after-sales service. However, the most successful channel in 2013 was hypermarkets. This channel benefited from ongoing outlet volume expansion across the country and from focusing more on non-grocery items. Hypermarkets notably proved successful with attractive limited time price promotions, thus encouraging impulse purchases.
Stronger growth expected for forecast period
Consumer appliances is expected to see a stronger retail volume growth during the forecast period in comparison to that seen during the review period. Stronger growth will be supported by ongoing economic growth, encouraging consumers to spend more freely. A rise in home ownership and strong residential construction, alongside strong population growth, will also support more dynamic sales growth. Growing numbers of religious tourists in Saudi Arabia will also fuel growth, with many pilgrims opting to shop for consumer appliances in the country due to the offer of low prices and wide product ranges.
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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.