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New Consumer Appliances Market Research: Key Highlights in the 2018 Edition

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Reema Jagtiani Bio

Latest research from Euromonitor International published in November 2017 reveals that the consumer appliances market is expected to grow by 4% in sales volume in 2017; slightly faster than the previous year. While 2017 marks the first year of volume growth recovery for Eastern Europe and Latin America, other regions maintain healthy growth. For product development, connected appliances remain the most important trend, registering 70% volume growth in 2017 globally, largely driven by connected air conditioners.

Recovery in Latin America and Eastern Europe Stimulates Stronger Global Market Growth

In Latin America, consumer appliances registers 2% volume growth in 2017. This is largely the result of economic rebound in Brazil, and growing availability of low price models. For example, in Brazil, semi-automatic washing machines registers 15% volume growth in 2017 driven by brands such as Colormaq and Mueller. However, the economic growth in Brazil will be constrained by high corruption and the unstable
political environment. Therefore, it is expected that the regional volume CAGR of consumer appliances over 2017-2022 will be kept at 2%. In Eastern Europe, consumer appliances registers 1% volume growth in 2017 , driven by a rebound in Russia, strong growth in Ukraine and Hungary, as well as stable performance in Poland and Romania. The Russian economy benefits from higher crude oil prices in 2017, increased investment and the declining unemployment rate. Also, firms such as LG Corp and Haier Group increased local production, easing foreign exchange pressure on appliances price. Amid new US sanctions, the Russian economy has adjusted to rely more on its Asian and European partners, so it is projected that consumer appliances in this region will see a volume CAGR of 2% over the next five years. Asia Pacific was the fastest
growing region in 2017. The regional growth are mainly supported by faster growth in China, as well as strong growth in Vietnam, Indonesia and India. The large increase of middle- to high-income households, the prospering housing market driven by urbanisation, along with the furnished housing policy in China, all stimulate market growth. Stable economic and household income growth, and urbanisation (especially in
China, India and South East Asia) will drive consumer appliances in Asia-Pacific to see a volume CAGR of 4% over the forecast period.

Consumption Upgrade in Major Appliances

Within large cooking appliances, ovens posted the fastest global volume growth (6%) in 2017, led by Asia Pacific. Especially fast volume growth of 25% was seen in China, which was driven by the growing preference for integrated kitchen designs, and  the low penetration and influence of Western cooking. No matter the strong growth in China, overall sales are still dominated by Western Europe. In both regions, steam ovens are gaining traction, because steaming is considered to be healthier than oil frying and grilling. Home laundry appliances posted robust 4% global volume growth over 2016/2017, mainly driven by freestanding appliances in Asia Pacific. Driven by better water and electricity efficiency, consumers, especially in China, are converting from top-loading to more expensive front-loading washing machines. At the same time, there is a change from hand washing to machine washing, especially in Indonesia, benefited by an increase in household disposable income. Refrigeration appliances registered 3% global volume growth in 2017. The main contributors to recovery were Latin America and Eastern Europe, as well as a marginal rebound in China. In China, it was driven by increasing demand for side-by-side and 4-door formats from middle- to high-income households looking to upgrade. It is projected that home laundry appliances will post a slightly faster global volume CAGR than refrigeration appliances over the forecast period, since fridge freezers still have higher penetration rates than automatic washing machines in key markets such as China and US.

Small Appliances Continue to Support Lifestyle Enhancements

Demand for convenience continues to generate growth for small appliances, with products such as robotic vacuum cleaners and air conditioners witnessing a steady rise in popularity. Volume sales of robotic vacuum cleaners are set to grow by 12% in 2017, led by high percentage growth in Asia Pacific and Latin America. Within small appliances overall, air conditioners is set to register the fastest volume growth of 16% in 2017, mainly due to a 25% volume sales increase in China. The sharp increase is driven by a replacement peak of air conditioners installed around 2005-2007, as well as solid new sales demand due to urbanisation and rising temperatures, innovation in air purification and self-cleaning to provide convenience for consumers. Fast growth is not expected to be sustainable after this high replacement peak, stabilising at a global volume CAGR of 4% over 2017-2022. Slow juicers is expected to register a slight volume decline of 2% in 2017 despite the category's status as a forerunner for the trend towards healthy living over 2012-2017 - a trend that remains a relevant growth driver for small appliances. Blenders are cheaper, multi-functional and also offer health-related gains. Vacuum blenders, which help keep air out to prevent nutrients from oxidising, reflect one recent health-driven innovation within the category. Meanwhile, other health-related appliances, such as light fryers and air purifiers, continue to generate high single-digit growth globally.

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