ASIA LARGE APPLIANCES MARKET REPORT – 2020

How the Asia Pacific Large Appliances Market Is Positioned?

Asia Pacific is the most populous region in the world constituting more than 45% of the total population. It is fastest growing region in the world. Most of the countries in the region are politically stable and economically robust. People have become more affluent and there is significant rise in personal disposable income.

A large appliance which was considered a luxury in most of the emerging countries has now become necessity. Market is largely dominated by Korean, Chinese and Japanese brands in the region including Samsung, LG, Haier, Gree, Videocon, Midea, TCL, Hisense and many others. Japanese brands have reputation being good quality and Chinese goods are relatively among the cheapest.

Korean brands are a blend of two providing better quality at reasonable cost. Market for large appliances is very closely related to the consumer confidence of the people in the country.

Availability of higher personal income

Which is another important factor affecting the sales of large appliances have shown

continuous rise in the period of time for most of the developing countries in the region. Market for large appliances was estimated at USD ~ billion in 2015.

In 2012 market was estimated at ~ billion and has registered continuous growth till 2014 when it achieved its peak value of USD ~ billion before declining in 2015.

Rising urbanization, shift towards manufacturing and services based economy, and improving social indicators, rise in wages were the major factors promoting the sales of large appliances in the region. Demand for basic and economical product was high in demand in emerging countries as majority of the people are in middle income group who are very price conscious.

Government policies and growing awareness about environment friendly products played a major role for increased demand for large appliances in the region.

Figure: Asia Pacific Large Appliances Market Size by Revenues in USD Billion, 2012-2015

Market Size for Japan Large Appliances Market

Japan is among the most developed nations in world and people in Japan have very high standards of living. Consumer experience is the very important factor while developing the product for Japanese large appliances market. Total demand for large appliances has declined from ~ million in 2012 to ~ million 2015.

Percentage decline in terms of revenue was less compared to percentage decline in terms of number of appliances sold as demand for high end products has increased. Increased concern for environment and value added features with smart technologies has promoted the sales of appliances with high price tag.

Japan is home to some of the prominent large appliances brand in the world which includes Panasonic, Hitachi, Daikin, Sharp, and others. Demand for high end technology products, loyalty to domestic brand, better after sale service and replacement of old product with latest and upgraded appliances were key growth drivers creating demand for large appliances in Japan.

Figure: Japan Large Appliances Market Size by Revenues in USD Million, 2012-2015

Market segmentation by major products

Market for large appliances is dominated by demand for air conditioners in Japanese large appliances market. In 2015, ~ million units of air conditioners were sold in Japan large appliances market. This was ~% of total number of large appliances sold in Japan Market. Television sales with market share of ~% has was second most sold large appliance totaling ~ million units. Washing machine and refrigerator were sold in nearly equal numbers, with each selling ~ million units in 2015 accounting for ~% market share each.

Trade scenario for Japan

Exports over the period have declined owing to closure of manufacturing bases of large appliances in Japan. Though the large appliances market is dominated by domestic companies many products were imported from manufacturing bases outside Japan due to unavailability of raw material and intermediary product in Japan. Import value is much higher than exports but has also declined with shrinking Japanese market for large appliances. Air Conditioner was most imported item in terms of value.

Major Distribution Channel

Distribution network of large appliances in Japan was majorly dominated by brick and mortar stores across Japan with sales largely dominated by large retail chains such as Yamada Denki, Bic Camera and others. Online shopping in Japan is dominated by market place like Rakuten or by mall sites. Several large retailers such as Yamada Denki and Bic Camera have their own online platform. Product delivery is the major determining factor for choosing the medium of sales. Logistics handling of large appliances in Japan is very fast, most appliances are expected to be delivered by next day. Delay in excess of 2 days is not accepted. For a small country like Japan such expectation are practical and is met by most retailers in both online and offline mode.

Recycling in Japan

Japan enacted “Home Appliances Recycling Law” in 2000. The law requires that responsibility of recycling lies on all stakeholders of the large appliances from consumer to manufacturer and everybody has to share the burden. The consumers must return the large appliances to retailers and pay for the cost of transport and recycling as announced every year. The retailer in turn has to take back the appliances they have sold.

The government has also appointed designated bodies to collect the old appliance. Cost of returning the large appliances is variable and is dependent on company as well as the appliance returned. In 2015 10,879,000 units of old large appliances were returned as per data released by Ministry of Economy Trade and Industry. Cost of returning the large appliances is variable and is dependent on company as well as the appliance returned.

Market Share Of Major Players in Japan Large Appliances Market

Large appliances market in Japan was largely dominated by domestic brands. Panasonic, Hitachi, Sharp, Sony, Toshiba, Mitsubishi are some of the leading brands which are operating in Japan large appliances market. These companies together constitute more than 90.0% of total revenue in Japan large appliances market. International companies such as LG, Electrolux, Haier have limited share with majority of the demand for their products coming for some specialized product.

How The Future for Large Appliances Market is Anticipated

High rate of product innovation, growing demand for innovated & high technology bounded products and consumer’s willingness to pay a premium will drive the large appliances market in Japan in terms of value. Japanese consumers are very loyal to their domestic brands however consumer preferences are changing

Figure: Japan Large Appliances Market Future Projections on the Basis of Revenues in USD Million, 2016-2020

Japanese consumers are very loyal to their domestic brands however consumer preferences are changing. As the product life cycle of large appliances is reducing opportunities will be created for new market entrants to capture the replacement market for large appliances.

Large Appliances Market in China

It was reported that urban households in China own ~ television sets, ~ washing machines, ~ refrigerators and ~ air conditioners per 100 households. Urbanization in China was at ~% in 2015 which translates into ~ million people living in urban locations. It has increased from ~air conditioners in 2010 to 34.2 air conditioners and ~ to 85.5 refrigerators per 100 household in rural areas in 2014. Demand for large appliances has increased from ~ million in 2010 to ~ million in 2015 registering a CAGR of ~%. In terms of revenue market has increased from USD ~ billion in 2010 to USD ~ billion in 2015 registering a CAGR of ~`%.

Programs like Go rural subsidy, subsidized trade in home appliances, launch of energy saving products has helped large appliances companies to make substantial sales increase in 2011. The sales of large appliances during 2013 witnessed launch of many smart consumer appliances which became the major growth driver especially driving the replacement demand. Programs like go rural have helped to develop sales network in rural areas which has benefitted the market in 2013 and years after.

Figure: China Large Appliances Market Size by Revenues in USD Million, 2010-2015

Market Segmentation by major Products

“Majority of the demand for refrigerator in urban areas was witnessed for larger size refrigerators with multiple doors, energy saving rating and other added features. Average size of the television being demanded in China has registered a consistent increase. The demand preference has increased in first quarter of 2012 from 37.8 inches to 45.3 inches in first quarter of 2016.

During 2015, around ~ million washing machines were sold with an aggregate value of USD ~ million. Market demand for new technology based air conditioners was on the rise in 2015. Retail sale of artistic high end intelligent air conditioner accounted for ~% sales volume in 2015 registering year-on-year increase of ~%.

How The competition is Prevalant in China Large Appliances Market?

With the growing market for large appliances in China, the competition has also become healthier. The market for large appliances is centered by those players which have an extensive presence in international markets and developed expertise into the industry. The market for television is dominated by Skyworth, followed with Hisense and TCL.

Haier, Midea and Siemens have also been the leading players in washing machines market in China. Haier, Hisense and Siemens have garnered majority of the share in volume sales for refrigerator market in China.

In recent years, international air conditioner brands gradually lost their market share in China. Gree is the leading player in China air conditioner market.

Trade Scenario for Large Appliances in China

China has been emerged as the leader in the export of large appliances to the global market. During 2014, it has been reported that approximately 40.0% of global production of refrigerators and washing machine was made in China. In air conditioner segment, the share is even higher to ~%. In 2015, exports declined significantly on account of low demand in global market.

US, Japan and South Korea remain the major exporter of large appliances to Chinese market. South Korean brands like Samsung and LG have been the major reason for sudden rise in Chinese import for South Korean goods. Imports from US registered positive growth in television and air conditioner market.

Future projection for Large Appliances Market In China

The market for large appliances in China is expected to grow at a CAGR of ~% during 2016-2020, with revenues expected to register at USD ~ million by 2020. Improvement in performance, quality in terms of energy saving, environment friendly, smart innovation and online platform will further promote the consumption upgrade leading to increased demand for large appliances.

New energy efficiency code is released for refrigerator industry and will be implemented from October 2016 which will further improve energy efficiency and lead to increased demand. The smart trend of large appliance will infuse the boundaries of industries and intensify industry competition; Internet companies will enter into the field of smart home appliance, which will intensify the industry competition and overturn the current profit model of the industry.

By 2020 it is expected that market share of intelligent and smart washing machine will grow from ~% in 2015 to 45.0% in 2020, air conditioner will grow from ~% to 55.0% and refrigerator will grow from ~% to 38.0%

Figure: Future Projections for China Large Appliances Market on the Basis of Revenue in USD Billion, 2016E-2020E

India Large Appliances Market Is Positioning and Size

The sector has been witnessing significant growth in recent years, supported by several drivers such as the emerging retail boom, real estate and housing demand, greater disposable income and an overall increase in the level of affluence of a significant section of the population. The industry is represented by major international and local players such as BPL, Videocon, Voltas, Blue Star, MIRC Electronics, LG, Samsung, Whirlpool and several others.

The market for large appliances was evaluated at USD ~ million during 2015, grown at a CAGR of ~% during 2010-2015. The major challenge for the consumer durables market is limited penetration of home appliances in rural areas. It has been witnessed that about ~% of Indian population that lives in its villages still does not have access to consumer electrical appliances. India encompasses with around 400 million of middle class population. This population group with rising disposable incomes has been instrumental in driving demand of various consumer electronic devices.

Figure: India Large Appliances Market Size by Revenues in USD Million, 2010-2015

Market Segmentation by major product Categories

Television has accounted for the largest revenues in India large appliances market with a share reported at during 2015. Consumers are switching to flat panel televisions, which have led to phasing out of CRT (cathode ray tube) TV sets from the market. The washing machines market in India has increased at a CAGR of ~% during 2010-2015. 70% of the washing machines sales in India belong to semi automatic range.

The revenue share of air conditioner sales was evaluated at ~% during 2015, which has declined from ~% in 2010. Decline in sales for window ACs has led to this decline in share which was partially offset by surge in sales volume for split ACs. Revenues share of refrigerator was marked at ~% during 2015. Refrigerator market in India is led by LG and Samsung followed by Whirlpool with a market share of around ~% during 2015. Leading five major players in India refrigerators market accounts for around ~% market share.

Trade Scenario for Large Appliances in India

During the period FY’2011-FY’2016, export of large appliances in India has augmented at a CAGR of ~% with export value reported at USD ~ million in FY’2016. During FY’2012 and FY’2013, the export value for large appliances has increased at a growth rate of ~% and ~% respectively with value reported at USD ~ million by FY’2013.

India imports televisions, refrigerators, and air conditioners mainly from China and Southeast Asia. India also imports from Japan, Indonesia, Malaysia, and Taiwan. The import value for large appliances in India has reduced at a CAGR of ~% during the period FY’2011-FY’2016.

Competition in India Large Appliances Market

Competition in India large appliances market is highly intense. In additional to traditional competitors such as Videocon, Panasonic, Voltas and Whirlpool, there are other leading companies such as LG, Samsung. The competition among companies involved in the business of large appliances in India is based upon several factors including cost, selling prices, distribution channels, performance, product innovation, product features, quality and other incentives been offered on the product.

Future Projection of large Appliances market in India

Indian large appliances industry has become one of the fastest growing sectors in India, primarily driven by growing Indian economy. With the uninterrupted inflow of disposable incomes and the development of product technology, the demand for the diverse consumer durable goods are growing.

With the GST constitutional amendment bill passed by the Rajya Sabha followed by some state legislatures, the government hopes that it would be able to implement GST from April 2017.

GST will be beneficial to the consumer durable industry as the companies currently pay tax in the range of 20-25% currently which is likely to come down. The GST regime will also reduce the price differential between the organized and unorganized players. Further logistics and inventory handling costs for the companies is also expected to decline. All this would lead to lower prices for the end consumer and thereby result in higher demand for the companies.

In the coming years, the television sales will continue to dominate the market for large appliances with a revenues share of ~% during 2016. The future for television will be LED and OLED TV, which has discerned highest growth in past years.

Figure: Future Projections for India Large Appliances Market on the Basis of Revenue in USD Million, 2016E-2020E

Other Major Countries in Asia Large Appliances market

Indonesia: Market for large appliances in Indonesia was estimated at USD ~ billion in 2015 registering positive growth rate of ~%. Fewer sales were registered due to decline in demand from the people and adverse economic situations. Philippines: The service sector was the main factor fuelling the market supported by growth in private consumption and increased government spending. Market for large appliances in Philippines was estimated at USD ~ billion in 2015. Majority of the demand was from growing demand from the people moving to urban location.

Singapore: Singapore is thriving financial hub with robust economic situations. Market size for large appliances in Singapore was estimated at USD ~ million. Market for Large appliances in Singapore is largely driven by demand for replacement of existing products.

Vietnam: Vietnam was one of the fastest growing economies in Asia in 2014, and manufacturing has been the key driver, much of which can be attributed to the electronics industry. A growing middle class supporting domestic demand has further strengthened Vietnam’s overall attractiveness for global manufacturers. Market size for Vietnam was estimated at USD ~ billion in 2015.

Malaysia: It is an open state-oriented and newly industrialized market economy. Many renowned Japanese and Korean companies have contributed significantly towards the rapid growth of the large appliances sector in Malaysia. Market size for large appliances was estimated at USD ~ billion in 2015.

Future Outlook of Large Appliances in Asia Pacific Region

Market for large appliances in Asia pacific region is expected to register a positive growth in the estimation period. Growth will be registered on account of recovery in sales in Japan and China market leading the revenue to increase from USD 154.2 billion in 2016 to USD 188.6 billion in 2020.

Market share of other emerging countries is expected to increase in future as demand for large appliances register growth in these countries due to improving economic situation and improvement in social infrastructure and rising income level.

Availability and reach of electricity to remote villages and towns will further augment the demand for large appliances in the emerging markets.

Japan and China are expected to recover growth in sales post decline and slow expected growth post 2015. Global events like compliance to environmental norms to cut carbon dioxide emissions, Tokyo Olympics, and many others.

Figure: Future Projections for Asia Pacific Large Appliances Market on the Basis of Revenue in USD Billion, 2016E-2020E

Source: https://www.kenresearch.com/consumer-products-and-retail/consumer-electronics/asia-pacific-large-appliances-market/76485-95.html

 Contact: Ken ResearchAnkur Gupta, Head Marketing & CommunicationsAnkur@kenresearch.com+91-9015378249

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