The pleasing trend for major domestic appliances has continued in the first half of 2011. In Europe, particularly Eastern Europe, markets are once again showing very positive rates of growth. In Africa and the Middle East, demand is steadily increasing and Asian countries still have a large share in global developments. North America, on the other hand, has declining tendencies due to the difficult economic situation, whereas South America has still been able to increase sales revenue. These are GfK Retail and Technology findings prepared for IFA 2011, which is taking place in Berlin.
On the one hand, the positive trend is due to the rising demand in the emerging countries. On the other hand, the trend for high-quality and energy-efficient products also explains part of the growth. Besides consumers in Europe and North America, the growing middle class in emerging countries is showing a clear interest in premium products, which is partially promoted by government incentive schemes.
All the signs point to growth in Europe
In Central and Eastern European countries, all signs point to growth once again. Sales in Russia have reached their highest level since 2006 due to double-digit growth rates. There are also clear indications of recovery in Poland, Romania, Slovakia and the Czech Republic. The Western European markets have continued to develop positively, with the exception of the "PIIGS" countries, Portugal, Italy, Ireland, Greece and Spain.
Despite the persisting trend for higher quality and more energy-efficient appliances, such as more energy efficient no-frost fridges, the average prices for washing machines with load volumes over seven kilograms, heat pump tumble dryers and induction hobs are nevertheless falling in some markets. Besides the PIIGS countries, they are dropping particularly sharply in France, Poland, Russia and the Czech Republic. While in the PIIGS countries the general economic situation is probably the main reason for the decrease, the dramatic increase in sales via the internet in other countries is causing prices to tumble. In the Czech Republic, for example, almost a quarter of white goods are already purchased via the internet. In most other Eastern European countries, as well as Germany and the United Kingdom, average prices are still rising. In Germany, this development is due to the trend towards higher quality appliances, especially in the areas of refrigeration, drying and the built-in segment. In the UK, the low average price based on a European comparison is rising, which is primarily attributable to higher prices in the areas of refrigeration and cooking.
Upward trend in the Middle East and Africa continues
The strong growth in the Middle East and Africa was also maintained in the first half of 2011. With a sales increase of over 30% for refrigerators, wash-ing machines, microwaves and ovens, Saudi Arabia is one of the leaders. Continuously high growth rates are also expected in the near future in Saudi Arabia, which has a comparatively young population. This trend is also supported by rising household figures (according to estimates from different economic experts, approximately 1.5 million new households are to be created by 2015), the introduction of minimum wages and government subsidy schemes. Smaller countries in the Middle East, which were shaken by political unrest at the start of the year, are stabilizing. This is mirrored in the demand for domestic appliances, which has slowly recovered - particularly in the last few months. Further growth is expected here with the start of the festive season of Ramadan.
African markets also grew in the first few months of 2011. Refrigerators are especially popular and account for more than half of total sales. The rising demand for washing machines and solo stoves highlights the trend for more modern kitchens and domestic appliances. Besides South Africa, which gen-erates a large portion of sales, Western and Eastern Africa are also increas-ingly gaining in significance.
Asia remains sectoral growth engine
Asia remains one of the growth engines for the global domestic appliance market. In the first half of 2011, the major markets, China and India, grew somewhat more slowly than in previous years. According to the National Bureau of Statistics of China, the slightly lower growth momentum in China can be explained by the deterioration in consumer sentiment due to higher inflation rates and the government controls on real estate. In India, prices are rising for technical consumer goods, as manufacturers are passing the higher costs for raw materials on to customers. Based on a worldwide comparison, markets are nevertheless growing at an above average rate in both India and China and in most other Asian countries. The trend towards premium products, such as double-door side-by-side fridge freezers, front loader washing machines, and tumble dryers, is being strengthened by the growing middle class. Energy efficiency is also becoming an increasingly important topic in Asia, which is supported by government subsidies in individual countries.
Market for domestic appliances in North America under pressure again
In North America, the domestic appliance market was in decline in the first half of 2011 due to the ongoing economic uncertainty, the difficult housing market and the shortage of government schemes. In contrast, Latin American countries posted sales growth in the first half of 2011, although unit sales of appliances have fallen slightly in Brazil. Tax cuts on certain goods, including domestic appliances, in the period between April 2009 and January 2010, had a positive effect in Brazil, the most important market in the region. For this reason, sales especially increased in the second half of 2009 and the first half of 2010. Unit sales in the first half of 2011 were nevertheless still higher in Brazil than in the first half of 2009.
Outlook: Positive prospects for global development
The market for major domestic appliances is continuing to develop positively worldwide. The trend towards higher quality and energy-efficient products is a growth driver in both highly developed and emerging countries. Environmental protection aspects are becoming an increasingly important sales argument. The growing middle class in the emerging countries will continue to have a positive impact on the development of the domestic appliance market and expand the proportion of consumers that purchases goods via the internet.
The method
Through its retail panel, GfK Retail and Technology regularly collects data on washing machines, tumble dryers, dishwashers, refrigerators, freezers, cookers and ovens, hobs, extractor hoods and microwaves in more than 90 countries around the world. The information for the North American market comes from the market research organization NPD Group.
Further information: Friedemann Stöckle, tel. +49 911 395-2566, friedemann.stoeckle@gfk.com, or visit our office at the IFA trade fair in Berlin from September 2-7, 2011 (VIP Room 2, "Großer Stern").
On the one hand, the positive trend is due to the rising demand in the emerging countries. On the other hand, the trend for high-quality and energy-efficient products also explains part of the growth. Besides consumers in Europe and North America, the growing middle class in emerging countries is showing a clear interest in premium products, which is partially promoted by government incentive schemes.
All the signs point to growth in Europe
In Central and Eastern European countries, all signs point to growth once again. Sales in Russia have reached their highest level since 2006 due to double-digit growth rates. There are also clear indications of recovery in Poland, Romania, Slovakia and the Czech Republic. The Western European markets have continued to develop positively, with the exception of the "PIIGS" countries, Portugal, Italy, Ireland, Greece and Spain.
Despite the persisting trend for higher quality and more energy-efficient appliances, such as more energy efficient no-frost fridges, the average prices for washing machines with load volumes over seven kilograms, heat pump tumble dryers and induction hobs are nevertheless falling in some markets. Besides the PIIGS countries, they are dropping particularly sharply in France, Poland, Russia and the Czech Republic. While in the PIIGS countries the general economic situation is probably the main reason for the decrease, the dramatic increase in sales via the internet in other countries is causing prices to tumble. In the Czech Republic, for example, almost a quarter of white goods are already purchased via the internet. In most other Eastern European countries, as well as Germany and the United Kingdom, average prices are still rising. In Germany, this development is due to the trend towards higher quality appliances, especially in the areas of refrigeration, drying and the built-in segment. In the UK, the low average price based on a European comparison is rising, which is primarily attributable to higher prices in the areas of refrigeration and cooking.
Upward trend in the Middle East and Africa continues
The strong growth in the Middle East and Africa was also maintained in the first half of 2011. With a sales increase of over 30% for refrigerators, wash-ing machines, microwaves and ovens, Saudi Arabia is one of the leaders. Continuously high growth rates are also expected in the near future in Saudi Arabia, which has a comparatively young population. This trend is also supported by rising household figures (according to estimates from different economic experts, approximately 1.5 million new households are to be created by 2015), the introduction of minimum wages and government subsidy schemes. Smaller countries in the Middle East, which were shaken by political unrest at the start of the year, are stabilizing. This is mirrored in the demand for domestic appliances, which has slowly recovered - particularly in the last few months. Further growth is expected here with the start of the festive season of Ramadan.
African markets also grew in the first few months of 2011. Refrigerators are especially popular and account for more than half of total sales. The rising demand for washing machines and solo stoves highlights the trend for more modern kitchens and domestic appliances. Besides South Africa, which gen-erates a large portion of sales, Western and Eastern Africa are also increas-ingly gaining in significance.
Asia remains sectoral growth engine
Asia remains one of the growth engines for the global domestic appliance market. In the first half of 2011, the major markets, China and India, grew somewhat more slowly than in previous years. According to the National Bureau of Statistics of China, the slightly lower growth momentum in China can be explained by the deterioration in consumer sentiment due to higher inflation rates and the government controls on real estate. In India, prices are rising for technical consumer goods, as manufacturers are passing the higher costs for raw materials on to customers. Based on a worldwide comparison, markets are nevertheless growing at an above average rate in both India and China and in most other Asian countries. The trend towards premium products, such as double-door side-by-side fridge freezers, front loader washing machines, and tumble dryers, is being strengthened by the growing middle class. Energy efficiency is also becoming an increasingly important topic in Asia, which is supported by government subsidies in individual countries.
Market for domestic appliances in North America under pressure again
In North America, the domestic appliance market was in decline in the first half of 2011 due to the ongoing economic uncertainty, the difficult housing market and the shortage of government schemes. In contrast, Latin American countries posted sales growth in the first half of 2011, although unit sales of appliances have fallen slightly in Brazil. Tax cuts on certain goods, including domestic appliances, in the period between April 2009 and January 2010, had a positive effect in Brazil, the most important market in the region. For this reason, sales especially increased in the second half of 2009 and the first half of 2010. Unit sales in the first half of 2011 were nevertheless still higher in Brazil than in the first half of 2009.
Outlook: Positive prospects for global development
The market for major domestic appliances is continuing to develop positively worldwide. The trend towards higher quality and energy-efficient products is a growth driver in both highly developed and emerging countries. Environmental protection aspects are becoming an increasingly important sales argument. The growing middle class in the emerging countries will continue to have a positive impact on the development of the domestic appliance market and expand the proportion of consumers that purchases goods via the internet.
The method
Through its retail panel, GfK Retail and Technology regularly collects data on washing machines, tumble dryers, dishwashers, refrigerators, freezers, cookers and ovens, hobs, extractor hoods and microwaves in more than 90 countries around the world. The information for the North American market comes from the market research organization NPD Group.
Further information: Friedemann Stöckle, tel. +49 911 395-2566, friedemann.stoeckle@gfk.com, or visit our office at the IFA trade fair in Berlin from September 2-7, 2011 (VIP Room 2, "Großer Stern").
