Microwaves in Russia

PROSPECTS

Ongoing strong performance driven by more affordable freestanding microwaves

Microwaves continued to record a strong performance in retail volume terms in 2019, driven by the dominant freestanding format and supported by ongoing declining unit prices. Microwaves are very much a “crisis winner”, offering a range of inexpensive models, while addressing rising urbanisation and consumer demand for quick and convenient cooking solutions suitable for hectic lifestyles.

Increasing emergence of economy models supports volume demand

Offering a comparably low average unit price compared to many consumer appliances in Russia, microwaves attract consumers looking for convenience but affordability considering that many consumers perceive them to be non-essential. Therefore, basic models that are offered below RUB3,000 (less than USD50) are attractive options, as they perform the main functions required such as heating or defrosting, saving busy consumers time when preparing meals.

More sophisticated microwaves target affluent Russians

Despite the choice of many consumers of microwaves to opt for affordable basic models, innovations are still present, which tend to target more affluent Russians. Microwaves are becoming increasingly sophisticated in the number of features and solutions they offer including inverter models, which are believed to be a more efficient way of cooking, using substantially less energy.

COMPETITIVE LANDSCAPE

Leading international brands continue to lose ground to economy basic models

In line with demand for affordable basic models of microwaves, international players, second-ranked LG Electronics and third-ranked Samsung Electronics, continued to lose strong retail volume share in addition to suffering ongoing volume sales decline in 2019. Although traditionally, brands such as LG and Samsung are associated with good quality and offer a wide range of products, supported by strong distribution and marketing budgets, their higher prices put them at a disadvantage towards the end of the review period, as many Russians restricted their spending on non-essential consumer appliances.

Midea Group strengthens leadership of microwaves with affordable offer

Midea Group Co Ltd strengthened its leadership of microwaves in 2019, after forcing former leader Samsung Electronics down to third position in 2018. Midea Group continued to gain retail volume share, benefitting from lower purchasing power amongst consumers by offering a wide assortment of low-priced microwaves, while still offering acceptable quality.

Competition continues to intensify with emergence of smaller players

The share of smaller players under “others” continued to grow in 2019, accompanied by double-digit retail volume growth as they saw the potential that this category still offers, particularly for economy models. Therefore, brands such as Galanz and De Luxe are benefitting from demand for microwaves that are priced below RUB5,000.

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