Published on: November 22, 2019
The global household appliance market is categorized into two segments, namely major household appliances and small household appliances. Major household appliances include refrigeration and cooling appliances such as fridges, freezers, and beverage coolers; large cooking appliances such as microwave ovens, convection ovens, steam ovens, cooktops, and hoods; and washing appliances such as washing machines, clothes dryers and steamers, laundry drying cabinets, and washer-dryers. Small household appliances include small cooking appliances such as coffee makers, blenders, sandwich makers, food processors, electric pressure cookers, toaster, juicers, and vacuum cleaners.
Our report encompasses a holistic analysis, market size and forecast, trends, growth drivers, challenges, as well as vendor analysis. The household appliance market is estimated to grow at a CAGR of 6.3% to reach USD 563.3 billion by 2023. Based on product, the major household appliance segment had the dominant market share of around 84% in the global household appliance market due to huge demand for refrigerators, air conditioners, and washing appliances in APAC owing to the growing disposable income and changing lifestyle of the population coupled with rising urbanization.
Based on geography, the APAC region had the dominant market share of around 43% in the global household appliance market driven by the growing middle-class population and their rising income that fueled their spending power on household amenities.
The global household appliance market can be segmented into the following:
Many factors are expected to drive growth in the household appliance market during the forecast period. Our analysis identifies the following factors to be driving the growth in the household appliance market:
The competition in the global household appliance market is getting more intense over the years. In addition, the growing innovation and advances in technology have changed the demand and preferences of the customers; hence, propelled the demand for innovative products. This has compelled the vendors operating in the global household appliance market to continually engage in R&D and innovation to sustain in the competitive market environment. The major product innovations introduced in the global household appliance market are in terms of technology, performance, features, and design. In addition, customers also seek for the appliances that can perform multiple tasks with minimal resources. To meet such evolving customer needs, vendors are continuously widening their product portfolio as per the growing and varying consumer demand. Furthermore, vendors are also offering products that are innovative, smart, and eco-friendly. These products are priced higher than traditional household appliances. Owing to the shortage of time for household activities, people prefer household appliances that are smart, highly efficient, and user-friendly, which leads to product premiumization. This growth in product premiumization and product line extension, coupled with the growing customer expenditure on household appliances, will drive the value sales in the global household appliance market.
The significant increase in demand for household appliances, especially in the major household appliances segment has led to the increased growth of this segment. A major reason for the increased adoption of smart and advanced appliances is the growing adoption of smart homes and smart home technologies. Uninterrupted and easy connectivity to the smart appliances is an essential feature that helps consumers handle and perform tasks remotely. The IoT technology bridges the gap between users and appliances, especially when the user is away from home, and connects them through the internet. IoT will be a trend that will influence vendors during the forecast period. The growth and advances coupled with the increased adoption of smartphones, smart hubs, and IoT devices drive the global household appliance market.
The increase in disposable income raises the annual household expenditure of consumers that constitutes expenses on basic livelihood and purchase of household durables including household appliances. The income growth drive the purchasing power of consumers for high-end appliances, and consecutively drive the value of sales of the global household appliance market.
Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
The market price of appliances depends on various factors such as manufacturing costs, labor costs, prices of raw materials, transportation, and marketing costs. Fluctuations in prices of raw materials directly impact the price of products or profit margins of manufacturers. The manufacturing o household appliances includes procurement and use of several raw materials such as steel, iron, plastic, glass, electronic equipment, petroleum products, and paints. The price of these materials is subject to change and fluctuates with international prices. Fluctuations in prices of petroleum affects transportation costs of raw materials and that of the final products. Moreover, an increase in transportation costs and prices of raw materials increases the cost of end-products. The market also has counterfeit products. Such factors restrict vendors from increasing the prices of end-products as it has an associated risk of decline in the consumer base. Hence, vendors usually reduce their profit margins, thereby affecting operational costs and R&D. Therefore, fluctuating prices of raw materials pose a challenge to manufacturers operating in the global household appliance market to produce efficient and innovative household appliances at affordable prices.
Household appliances such as refrigerators, air conditioners, and washing machines are branded and have reliable quality. These appliances are made of stainless steel or hard and durable metals and are characterized by longer replacement cycles than that of old household appliances that were made of less durable materials. Vendors engage in in-depth R&D and develop innovative and durable materials to extend the operational life of appliances. The long lifespan of such appliances reduces the frequency of product replacements, thereby adversely affecting the year-over-year growth of the market. Manufacturers of major household appliances offer product warranties and guarantees, which further increases product life spans. Such factors decrease repeat purchases of household appliances. Also, low maintenance costs of household appliances further contribute to infrequent product purchases. Therefore, the factors mentioned above drive and raise the product lifespan of household appliances, thereby restricting frequent sales of household appliances.
The growing population and increasing environmental pollution drive governments of various nations to set guidelines for manufacturers to decrease pollution. Also, vendors are mandated to adhere to various federal, state, and other government rules and regulations. These regulations are related to energy, product descriptions, packing or labeling, and hazards or safety issues for users, and about product lifecycle. Most regulations are imposed by different governments to ensure the safety of end-users, the conservation of the environment, and natural resources. Furthermore, governments also aim to educate and spread awareness regarding the safety standards and regulations among consumers. The implementation of the regulations makes it difficult for manufacturers to penetrate potential markets, which may limit the growth of the market during the forecast period.
Some of the trends that are expected to influence the market during the forecast period are listed below:
The growing demand for innovative and advanced products and increased demand for products with multiple features or multi-functional products encourage vendors to offer multi-functional household appliances. The multi-functional household appliances are priced higher than other household appliances, but consumers are increasingly seeking multi-functional household appliances, as they give a high return on investment over conventional household appliances. Multi-functional products are perceived to save time and resources of customers. They also save space, money, and effort on operations and provide convenience and improved results. To address the growing demand for multi-functional household appliances, vendors are continuously innovating to remain competitive, high customer attention, expand the customer base, and generate demand for products. An increase in the number of such multi-functional offerings in the global household appliance market drives the adoption of such products.
The increasing demand for advanced featured, and innovative products raise opportunities for vendors to introduce smart household appliances. These smart household appliances offered in the market are user-friendly and are equipped with various features and are aesthetically improved. These improved features and advances in technology provide users with efficient household appliances. The introduction of smart household appliances is increasing due to their user-friendly interface, advanced features, and aesthetic design. These advantages over the functions of conventional appliances will fuel the growth of the global household appliance market during the forecast period.
One of the trends in the market is M&A and strategic alliances between competitors and vendors of related industries to increase market shares and improve the features of products. Vendors adopt this trend to augment their operations and expand their business in other locations across the globe. This strategy allows them to gain strong competence over other vendors operating in the market. In addition, vendors operating in the market are also engaged in strategic alliances and collaborate with the related industry vendors to remain competitive. Such increased M&A and strategic alliances in the global household appliance market have increased investments, which contributed to innovations and advances in this sector, thereby fueling the growth of the market during the forecast period.
Our report on the global household appliance market covers several large and small vendors active in the market including Electrolux, Haier Group, LG Electronics, Robert Bosch, Samsung Electronics, and Whirlpool Corp.
The following are some of the key developments mentioned in our global household appliance market report:
Backed with competitive intelligence and benchmarking, our household appliance market research report is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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