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Five Major Appliances Trends to Watch in 2022

2/18/2022
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How did the market perform in 2021?

The global major appliances market grew by 3% in 2021, recovering from tepid growth of 0.3% in 2020.

  • Major drivers continued to be stimulus packages, low interest rates, continued hybrid working arrangements and a booming housing market.
  • Demand spill-over from 2020 resulted in 2021’s growth being front loaded to the first half of the year. Growth gradually declined as supply chain issues, long delivery times and inflation restricted sales.
  • As the world continues its recovery from the disruptions of 2020 and a ramping up of production, companies are discovering that they are competing for the same limited commodities.
  • Euromonitor International expects growth to taper down in 2022 as a higher interest rate environment and much of the major appliance demand having been fulfilled in 2021 reduces consumer demand.

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Source: Euromonitor International

What are the trends shaping the industry?

Consumers had an interesting two years with on-and-off lockdowns to consider the appliances they wanted to have at home. In the early part of 2020, the focus was on food storage and hygiene- related appliances. Starting from mid-year, as consumers experimented with cooking at home, the focus shifted towards cooking appliances, small and major.

In 2021, consumers continued their cooking at home experience, with many exploring new recipes from their social media feed. High growth sectors shifted from major appliances to small appliances, predominantly in the food preparation and hygiene areas.

In the longer term, Euromonitor International expects the following trends to have a major impact on the industry.

A renewed focus on sustainability

With the focus on hygiene gradually fading after two years of the pandemic, companies are refocusing on long-term environmental sustainability in their products and operations. The near-term goal includes being carbon neutral in their own operations, while the longer-term goal is to reduce their products’ impact on the environment. For consumers, ESG has become a key buying criterion.

As part of its sustainability efforts, Samsung’s SmartThings Energy was launched in 2021, with a service that allows consumers to monitor and analyse the energy used by devices and appliances connected to the SmartThings platform.

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Source: Euromonitor International

Interoperability

The last two years saw announcements from the Connectivity Standards Alliance (Matter) and Home Connectivity Alliance (HCA) on initiatives to make the smart home a seamless experience for consumers. Both alliances are working towards common standards for device-to-device and cloud-to-cloud interoperability, promising a more seamless experience by integrating products from different brands and unlocking specific features.

Moving forward, consumers can be expected to have a more seamless experience when creating their smart homes. Hopefully this means that consumers will not face the pitfalls of incompatibility between devices from different brands.

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Cross-industry collaborations

Appliance companies have been forming partnerships and pursuing M&A deals to increase the value of their products. Partnerships are varied and include ones with meal kit companies which enable a consumer to cook a greater variety of healthy recipes with precision, whilst reducing food waste.

For example, Tovala, a smart oven and meal kit service start-up, is a company that wants to help consumers cook a greater variety of healthy meals. Consumers who purchase its ovens and sign up for a meal plan can choose from a range of meals every week and simply scan to cook.

LG announced that its 2019 models and newer ovens will be able to recognise meal kits from Tovala, and cook food based on the downloaded recipes.

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Source: lg.com, tovala.com

Migration from gas to electric and induction cooking

There is growing disagreement in the US over the use of natural gas in new homes and commercial buildings. Regulators cannot agree on whether natural gas can be considered a green energy source. This has led to states enacting laws for and against natural gas piping to homes and commercial buildings. Ultimately, in the long term, consumers are trending towards induction and vitroceramic built-in hobs.

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Source: Euromonitor International

Omnichannel and D2C sales trending for major appliances

Chinese e-commerce platforms see major appliances as one of their next big growth drivers. In 2020, online sales of appliances exceeded those made by physical retail stores for the first time. E-commerce platforms are working closely with appliance companies to make the online purchase of small and major appliances frictionless. They are currently focusing on sales of major appliances through free delivery, no-questions-asked returns and flexible consumer credit.

Companies such as Alibaba, JD and Pinduoduo are also partnering with retail chains to expand their offering. Pinduoduo has purchased 5.6% of Gome’s shares, giving it access to a wider brand range, while being able to offer products at the same price or cheaper than Gome’s stores. Appliance companies are also embracing new forms of marketing, such as the use of livestreaming, to sell their products.

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As we approach the endemic phase of COVID-19, both consumers and companies are pivoting back to pre-pandemic trends. In the long term, companies will look to make sustainability a profitable initiative that will help their ESG profile with consumers and investors.

For further insight, read our report World Market for Major Appliances.

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