Global Major Household Appliances Market: 4 Key Supplier Opportunities Through 2023

Global Major Household Appliances Market: 4 Key Supplier Opportunities Through 2023

The appliance industry has seen challenges recently. From the disruptive impact of tariffs on long-established supply chains, to ripple effects of the coronavirus outbreak causing slowdowns in production, suppliers face a number of obstacles to growing sales, particularly as these pressures have led to some price hikes for products like washing machines and dishwashers.

A new Freedonia Group analysis of the $131 billion global major household appliances market shows not only where these challenges are being felt most strongly, but also where the best opportunities for future growth reside. Below, we highlight four key areas to watch. 

1. US & China to account for 25% of new sales through 2023

China is by far the world’s largest appliance market, followed somewhat distantly by the US. While ownership of all types of appliances is already high in the US, and the market in China is beginning to mature, the two countries together will account for 25% of new sales through 2023:

  • In the US, strong replacement and upgrade rates support higher product sales values. The fastest growing products will be washing machines, clothes dryers, and dishwashers – supported by the gradual abatement of the impact of tariffs on prices – whereas projected stagnation for freezers will cause a decline in shipments.
  • In China, almost all households own essential appliances, and rising incomes will further increase penetration. Sales of clothes dryers and dishwashers will accelerate slightly as affluent households purchase them for the first time. Meanwhile, Chinese exports will remain significant to the global market due to China’s relatively low labor costs and trade barriers with other international markets.

2. Performance enhancements driving replacement sales in high-income countries

Innovations that improve energy efficiency are very important to consumers in high-income countries, where consumers are generally more able and willing to make upgrade and replacement purchases, particularly if incentivized by potential sustainability and energy-saving benefits. Additionally, improvements that solve a particular problem experienced while using appliances are more likely to cause consumers to upgrade. For example:

  • Large cooking appliances with built-in sous vide, induction, or convection cooking functions provide more precise temperature control.
  • Appliances that offer multiple cooking methods (such as dual-fuel ranges with both gas and induction cooktop components) appeal to consumers looking for greater flexibility.

Dishwasher innovations tend to focus on noise reduction, ease of operation, and improved washing performance. For example:

  • Bosch’s 800 Series dishwasher is marketed as being the quietest available.
  • Electrolux’s 900 ComfortLift dishwasher emphasizes ease of operation by highlighting the minimal number of choices users need to make about wash cycle; users simply set a touch slider to the desired cycle time, and the dishwasher optimizes wash cycle based on that one parameter.
  • LG’s SteamClean dishwasher improves washing performance through use of high-temperature steam technology that can clean delicate stemware as well as pots and pans. The pre-steam option removes heavily adhered food residues, which eliminates the need to scrub items beforehand or pre-rinse before placing them in the dishwasher.

Not only can such enhancements bolster upgrade purchases in large markets like the US and Western Europe, equipping products with value-added features can also support higher sales values.

3. Rising incomes leading to increased penetration in industrializing nations

Lower- and middle-income countries in Asia and the Africa/Mideast region will post the fastest advances globally through 2023 (albeit from much smaller bases), as countries such as India, Indonesia, Egypt, and Nigeria see gains from:

  • expansions to the middle class that allow greater portions of the population to better afford appliance ownership
  • rising urbanization and improving urban infrastructure with more reliable access to electricity and running water
  • fast gains in the construction of new housing units

In India – the third largest global market for major household appliances – a number of producers are opening plants or increasing capacity to meet rapidly growing domestic demand:

  • Midea (China) plans to open a new plant making Toshiba products in the country as early as this year.
  • In 2018, Panasonic opened a new plant in the state of Haryana producing refrigerators specifically designed for the Indian market. Because India has very small average home sizes, smaller appliances requiring less upfront investment are popular with consumers with low incomes or unreliable access to electricity.

4. Appliances’ growing role in the smart home ecosystem

Major investment in product development is leading to rapid increases in penetration of smart home devices, particularly in affluent markets like the US and Western Europe. This trend is expected to continue as the performance and interoperability of individual smart devices grows and their prices continue to decline. Increasingly, appliance manufacturers are employing smart technology in their products to carve out a space in the ever-expanding smart home ecosystem:

  • In March 2019, Electrolux announced a range of ovens featuring integrated cameras that allow consumers to keep an eye on their food via smartphone app. These features can give people peace-of-mind when doing other chores or leaving the house to run a quick errand while food is cooking.
  • In January 2019, Samsung released its next-generation Family Hub refrigerator featuring Samsung’s Bixby artificial intelligence assistant, an interactive screen, and integration with other smart home devices. Users can view the inside of the refrigerator remotely, and recipes can be searched and added to a calendar to enable meal planning.
  • Whirlpool first introduced smart appliances in 2017. Via mobile app, users can change settings on cooking appliances, start washing and drying cycles, and automatically order laundry supplies such as detergent and dryer sheets.
  • Hestan’s cooktops communicate with its Bluetooth-equipped pots and pans to maintain exact temperatures (e.g., 325 degrees), instead of approximations such as low, medium, and high, allowing easy sous-vide and induction cooking and preventing burning.

Want to learn more?

Global Major Households Appliances is now available from The Freedonia Group.

About the Author:

Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.

 

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