ASEAN KEY DESTINATIONS
Washing machine record greatest demand surge; Vietnam is fastest growing market
2 September, 2013, SINGAPORE – Consumers in the Southeast Asian region which is made up largely of emerging markets are hungry for large appliances such as air conditioners, refrigerators, washing machines and microwave ovens. GfK retail tracking of the Major Domestic Appliances (MDA) sector reported soaring demand that boosted three out of four key segments by more than 20 percent over the same period last year.
In the first six months of this year, nearly 11.5 million units of large appliances were sold across the eight key markets tracked by GfK in the region— Singapore, Malaysia, Thailand, Indonesia, Philippines, Vietnam, Cambodia and Laos. Demand in volume terms spiked by nearly 20 percent compared to last year, while translating to a 22 percent growth in total dollar value.
“Rising affluence coupled with multiple retailers expanding beyond first tier cities has been effectively stimulating the penetration of big household appliances with more widespread reach, enabling more rural dwellers to buy their first of such appliances,” explained Jasmine Lim, Account Director for Home & Lifestyle at GfK Asia. “This mix of consumer development has incited a strong surge in total sales major domestic appliances in the recent times.”
The most significant growth market during this tracking period was Vietnam, which reported a 31 percent rise in consumer spending on major domestic appliances. Others which also saw high expansion of their MDA market value of around 22 percent were Indonesia, Cambodia and Thailand.
“Though sentiments in Vietnam remained volatile on the back of a cautious and economically uncertain 2012, pent up demand amassed over prior years drove strong performance of the market as home owners lifted their consumption appetite for household items,” said Lim. “The hot climatic conditions in Vietnam and several other countries also enhanced the sales volume of air-conditioners in the region.”
The overall air conditioner segment across Southeast Asia escalated by 23 percent in the first half of the year. Its lesser volume increment of 21 percent during this corresponding period points to a higher average selling price and signifies that consumers are more willing to purchase better models at higher prices. Average local prices of the air conditioners in the respective markets during this period rose as much as 12 percent.
In contrast, consumer preferences towards refrigerators have remained largely unchanged with one-door refrigerators maintaining its position as the most popular choice amongst the region’s consumers at 56 percent share of total market volume. Such refrigerators continue to make up the bulk of the volume sales in Indonesia, Philippines and Thailand. However, two-door top freezer models posted the largest absolute value growth by 25 percent and in the first six months of the year dominated more than half of the product’s overall value. At the same time, value of the more premium models like the two-door-side-by-side jumped more than threefold in sales value in the emerging markets of Indonesia, Philippines and Vietnam.
“Subsistent segments like single-tub washers and one-door refrigerators will continue to grow as penetration increases in the emerging markets and consumers purchase their first washer and refrigerator,” commented Lim. “At the same time, demand for products at the other end of the spectrum by the rising affluent class will continue to fuel strong demand for larger capacities, new features and better technology and together, these will continue to thrust the sector in this high potential region to even greater heights in the years to come,” she concluded.
GfK is one of the world’s largest research companies, around 13,000 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. In 2012, GfK’s sales amounted to €1.51 billion.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below