Sales of consumer appliances are projected to recover in 2021, after consumer sentiment was badly affected by the pandemic. In 2021, sales of both major and small appliances are expected to exceed those in 2019.
Sales of consumer appliances are projected to recover in 2021, after a decline in 2020. The markets for both major and small appliances, in terms of unit shipments, are expected to exceed 2019 levels.
Our model shows an improving macroeconomic environment, lifting our 2021 and future forecasts. Projections are for a 2% increase from Q2 to Q3 baseline numbers. However, this could be affected by a number of factors, including a resurgence of COVID-19, inflation, continued logistics cost increases, and even the Evergrande debt crisis.
Chinese companies are leading the distribution innovation race. E-commerce giants, such as JD and Alibaba’s Tmall, are focusing on appliances as one of their next growth sectors. They are partnering with appliance brands and providing no-hassle returns, easy credit and extended warranties on major appliances bought on their platforms. Additionally, JD has launched an interactive mall to provide consumers with experiential product journeys before they make their purchase.
With copper prices at historic highs and expected to remain elevated, companies are looking at significant redesigns of their air conditioners. In Daikin’s May 2021 conference call with investors, it announced plans to halve its copper usage in products by fiscal year 2024.
Container freight rates are up more than 350% year-on-year. Prices of critical raw materials, such as copper and steel, have plateaued at historic highs, but show no signs of decreasing. These factors pushed consumer appliance prices up at the beginning of the year, and have significantly disrupted supply chains.
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