In 2022, the small appliances industry declined as sales normalised from the pandemic peak of 2020 and 2021. Pandemic staples such as kitchen appliances and hygiene-related categories such as vacuum cleaners or air purifiers were the most impacted. Decline in sales can be attributed to the Asia Pacific region, driven by COVID-related lockdowns in China. Inflation and its other drivers, such as rising cost of raw materials or manufacturing and distribution, have affected the unit price of small appliances, but to a lesser degree than in major appliances. Small appliances typically have a higher price elasticity due to being considered discretionary items and so consumers don't mind trading down or postponing purchases when their consumer spending is under pressure.
2023 is likely to see sales rebound, as consumers may want to replace the appliances purchased during the pandemic, driven also by the changed lifestyles, as many continue hybrid working and prioritise spending on at-home categories. However, inflation is likely to hamper a full recovery as consumers in some regions have started to push back on discretionary spending. Small appliances are, however, likely to benefit from their low average price, helping volume growth despite growing concerns of consumers’ cautious spending.
Euromonitor International expects the following five trends to have a significant impact on shaping the industry:
Artificial intelligence and automation
Small appliances lagged behind major appliances in adopting new technology, specifically AI and automation, but this is slowly changing. Products such as vacuum cleaners, air treatment products and electric toothbrushes are at the forefront of technology innovation. Vacuums, in particular, are pioneers in adopting AI-enabled functions such as LIDAR (light detection and ranging) for advanced object avoidance. This is expected to be a key differentiator to drive product performance and premiumisation. For instance, iRobot’s Roomba j7+ prides itself on the ability to avoid pet waste – aptly marketed as P.O.O.P - Pet Owner Official Promise.
Among industry professionals, technologies such as artificial intelligence and robotics/automation are seen as important drivers in the business. Connectivity and, specifically, the Internet of Things are among the top drivers as well.
Space and multifunctionality
Urbanisation and the decreasing size of households and living space, place greater importance on space saving and versatility. This is not entirely new for small appliances but is becoming a must rather than nice to have. The convenience of versatility and shrinking living spaces is manifesting in the growing popularity of products such as 2-in-1 mops and vacuum cleaners, multifunctional air purifiers, multicookers among rice cookers or food processors.
Multifunctional air purifiers have seen impressive growth, their popularity also being supported by the pandemic and growing awareness about air quality. Some companies started offering products beyond multifunctionality and incorporated air purifying into other household items such as furniture. LG, for instance, following a similar product offered by IKEA, introduced LG Puricare Aero Furniture in 2022, which is a table with built-in air purifier, wireless charger and mood lighting, trading on being designed for small spaces.
Wellness and healthy lifestyles
The pandemic has served as a catalyst for consumers to strengthen their focus on health and wellness. In small appliances, the focus on wellness and self-care continues to have an impact on consumers’ choices and is not decreasing in importance. Small appliances that trade on health credentials, germ-killing properties or air cleaning, such as air fryers, air purifiers or vacuum cleaners, benefit from this trend.
For instance, in Asia Pacific, the popularity of rice cookers and concerns about rice-rich diets, including increasing awareness of the carbohydrate content of rice, have been translated into new product development and low sugar claims. Thai brand Smarthome has introduced its Low Sugar Rice Cooker, claiming that the special cooking system ensures that the cooked rice has lower starch or sugar content.
Services and ecosystems
Ecosystems and partnerships that go beyond offering one product to a net of services or products are more advanced in major appliances, but small appliances offer an opportunity. For instance, we see a growing net of partnerships between recipe providers and manufacturers, as many have recognised the mutual benefit for expanding revenue and for working towards smart kitchens.
A prime example is Vorwerk, which offers a subscription service with its recipe platform, Cookidoo, where users have access to recipes to use with their multifunctional small cooking appliance, Thermomix.
Premiumisation of home experiences
Despite the cost-of-living crisis, consumers are willing to spend on premium products, if they view them as bringing them increased personalisation or a premium experience. From the ability to choose unique designs, to having various attachments fulfilling specific needs, for instance in vacuum cleaners for pet owners or hair appliances tailored to specific hair needs, the small appliances industry offers many opportunities for brands to capitalise on this trend.
For further insight, read our report World Market for Small Appliances.