E UROMONITOR DIGEST

Volume III Issue No. 3 • March 2017

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The EMB of the Department of Trade and Industry (DTI) is mandated to oversee the development, promotion, and monitoring of Philippine exports. The EMB provides the exporters the enabling environment to make them globally competitive. Euromonitor Digest is a monthly online publication of the EMB, which aims to provide insightful analysis on the reports culled from Euromonitor International’s Business Intelligence Research.

EDITORIAL BOARD Dir. Senen M. Perlada Editor-in-Chief

AD Agnes Perpetua R. Legaspi Managing Editor

Victorino S. Soriano Associate Editor

Louise Kaye G. Mendoza Layout / Design Artist

Passport is an online market research database used by the world’s top investment banks, strategic management consultancies and Fortune 500 companies to understand the global business environment in a time of rapid change and increased globalization.

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Key Highlights from the 2017 Consumer Appliance Research


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uromonitor’s latest research published on November 7, 2016, revealed that the consumer appliances market was expected to grow by 3% in retail volume terms in 2016, slightly higher than growth in 2015. While Eastern Europe and Latin America continued to struggle, other regions are registering stable growth. As consistent with the global trend towards a “smart” era, the consumer appliances industry is on a similar development path, albeit in a niche manner in many countries. Emerging countries in Asia Pacific drive sales of major appliances

scandals. With real GDP growth inching towards positive levels, Brazil’s sales of major appliances are likely to start recovering in 2018. Meanwhile, the Middle East and Africa will remain the top growth region in major appliances, with volume sales expected to have been up by 4% in 2016. Morocco and South Africa, in particular, were leading growth, with sales expected to have risen by 5% in volume terms. Penetration of major appliances in these two emerging countries was currently rather low and there was potential for heightened sales growth, especially in the case of built-in hobs and microwaves.

Asia Pacific will remain the biggest regional majorappliances market, thanks to strong demand from emerging countries, including India, Indonesia, and Vietnam. While accounting for more than 60% of Asia Pacific’s volume sales, China is likely to round up the year with flat growth due to shrinking purchases post the removal of government subsidy programs and huge price promotions that were apparent in 2015. Indonesia will post the highest growth (at a 9% CAGR) over 2016-2021. In 2016, nearly half of its sales of major appliances in Indonesia was generated by sales of fridge freezers and this trend will continue to 2021. Demand is coming from continued urbanization through the development of an electricity supply infrastructure and increasing property ownership, as well as lifestyle changes that require more refrigeration appliances at home.

Available within consumer appliances on Passport for the first time, we are looking at understanding the availability and demand for connected appliances within major appliances. While clearly still a niche concept as of 2016, research shows that automatic washing machines are the most connected appliances in actual volume terms among major appliances, accounting for some 10% of total automatic washing machine volumes. Detergent management with the capability to control detergent dosage is the key convenience factor that entices consumers. Connected automatic washing machines stem mainly from China, the US, Italy, and South Korea. Fridge freezers are next, but their technology is still in the development stages and high unit prices are impeding the rate of penetration compared to that of washing machines.

Volume sales of major appliances were projected to have increased by 2% in 2016, representing a slight improvement over 2014-2015 growth. Geographically, Eastern Europe and Latin America were continuing to see sales decline in 2016, although, notably, the declines were smaller than in the previous year. A negative economic outlook and poor oil prices were dampening Russian growth in 2016, with real GDP growth not set to turn positive until 2017, which will bolster consumer purchasing power. Similarly, Brazil was struggling with poor consumer sentiments, a decline in government expenditure and a political crisis due to national oil companies’ corruption

Volume growth of small appliances looks set to mirror that of the previous year, at 2% in 2016.

It is all about lifestyle with small appliances

Source: © and database rights Euromonitor International PLC 2011 All rights reserved.

Volume III Issue No. 3 • March 2017

Geographically, the Middle East and Africa are expected to post the highest volume growth of 6% in 2016, with South Africa and the United Arab Emirates leading growth. Health continues to be a key buzz word in small appliances, with a rise in popularity of products such as light fryers, air purifiers, and juice extractors. One notable trend is how consumers’ beverage preferences have evolved in recent years. Demand for pod coffee machines, which is seeing its popularity spike (up at a 10% volume CAGR over 2011-2016), is expected to drop to a 2% CAGR increase over the next five years. This slowdown will be the result of pod coffee machines’ maturity and the banning of pods in core consumer countries such as Germany due to environmental reasons. As a reflection of health-driven trends, slow juicers are displaying the highest growth in 2016. The popularity of slow juicers looks set to continue, with global volume sales likely to more than double over 2016-2021. The top five countries (China, South Korea, Japan, the US, and Germany) account for 84% of slow juicers’ global volume sales in 2016. This growth is also affected by the transition of manufacturers’ production more from centrifugal juicers to slow juicers; this is partly due to sales of centrifugal juicers dropping in North America and Asia Pacific as the concept of being able to retain nutrients while juicing appeals to consumers wanting to embrace new technology. Although sales of air conditioners were expected to fall in 2016, connected air conditioner sales stood out, totaling nine million units in 2016. Being able to remotely control air conditioners was seen as

Asia Pacific will remain the biggest regional major-appliances market, thanks to strong demand from emerging countries, including India, Indonesia and Vietnam. a convenient new feature in households in countries with extremely hot summers or cold winters as consumers can switch on the cooling or heating function before reaching home. On this same theme of convenience, robotic vacuum cleaners are expected to post the highest forecast growth among all vacuum cleaners over 2016-2021, with sales up at a 9% volume CAGR, on the back of robust demand from Asia Pacific countries, including Thailand and China. Middle East, Africa are a rising production spots Asia Pacific led production of consumer appliances, accounting for 71% of total production volumes in 2016. Although the majority of production came from China, Thailand and Indonesia were also emerging as key production hubs, with fast double digit growth in 2016. This is aligned with economic development, as well as consumer appliance sales growth in Southeast Asian countries. In terms of production volume growth, the Middle East and Africa were posting the highest growth in 2016 driven by Saudi Arabia and Egypt. ■

Check out our previous issue on our website:

Watches 2016 and Beyond: How will Asia move from here?