Demand Volatility in the Consumer Appliances Market in 2020

April 2021

2020 was a volatile year for the consumer appliances industry. In March 2020, most companies were focused on cost cutting, not knowing that demand would increase exponentially in Q3 and Q4. Demand in 2021 is expected to remain robust, boosted by continued government stimulus. However, looming supply chain challenges could curtail growth. The semiconductor shortage is especially serious with no solutions in the near term.

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Key Findings

2020 sales backloaded

While sales were impacted in H1 2020 due to the various lockdowns, most of consumer appliance sales occurred in H2 2020, with stimulus cheques, home sales and upgrading driving the market.

Beating early 2020 guidance by large margins

Appliance companies provided grim or no guidance for 2020 when the pandemic hit, however most, if not all, companies exceeded this guidance by the end of the year.

Robust housing market

Historic low interest rates and stamp duty holidays (eg in the UK) contributed to robust housing markets in major countries, which has continued into Q1 2021.

Accessible consumer credit

Loose monetary policy has kept interest rates at record lows. This has not only helped with low mortgage rates, but also enabled consumers to purchase major appliances at competitive interest rates.

Consumers’ willingness to spend

Stimulus cheques plus consumers’ inability to spend on indulgences such as holidays and outdoor activities have led to more spending on appliances.

Shipping and logistics issues

Logistics of shipping goods is reaching a breaking point with ports being overwhelmed, freight costs rising and accidents. For example, the Ever Given container ship temporarily running aground in the Suez Canal in late March 2021.

Supply chain challenges

Increasing raw material prices as well as a semiconductor shortage could significantly curtail supply in the next few quarters.

EU Ecodesign Directive

The EU’s latest regulations impacting appliances include stipulations for repairability and recyclability intended to improve the life span, maintenance, reuse, upgrade, recyclability and waste handling of appliances.

 

Introduction

Scope
Key findings

Key Events in 2020

2020 in the making: global consumer appliances market
Fluctuating year for companies

Demand Drivers

Some of the factors that drove demand in 2020
Housing market and interest rates (1)
Housing market and interest rates (2)
Consumers’ homebound behaviour
Consumers’ increased willingness to spend
Consumers' focus on hygiene related appliances
Buying appliances online pick up

Supply Chain Constraints

Supply chains are unable to keep up with demand
Shipping and logistics issues
Increasing raw material prices
Global semiconductor shortage

Eu Ecodesign Directive

Doing away with throwaway culture (1)
Doing away with throwaway culture (2)

Our Outlook for 2021

Will supply chain challenges constrain growth in 2021?
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