The increasing spending power of consumers in Asia has been a boon to many industries thanks to the economic recovery, including the major household appliances sector which has managed to bounce back from its weakened performance of last year.
According to market research company GfK Asia, in nine Asian markets which include Malaysia, Thailand, Hong Kong, Taiwan, South Korea, Philippines, Vietnam, and Indonesia, there’s an exponential increase of 23 and 19 percent respectively in overall sales and volume of household appliances during January-September 2010 compared to the same period last year. Various markets register more than 50 percent growth.
"With Asia leading the growth in home sales globally, it is not surprising to see heightened demands for household appliances in this part of the world as well. Developing economies in the region such as Indonesia and Philippines experienced the greatest growth with consumers here spending over 60 percent more on major home appliances," said Jasmine Lim, regional account director for home appliances at GfK Asia. "Surging demands also spurred price hikes in majority of the markets surveyed where average prices rose by 10 percent or more, with countries like Singapore and Indonesia hitting 19.5 and 14.5 percent growth respectively."
According to GfK findings, a key appliance which contributed to the good performance of the industry was air-conditioners, selling over 25 percent more in units and raking in 24 percent more in dollar value in the past 12 months. Among all the countries surveyed, the top two markets which spent the most on air-conditioners, out of their total household spend on major home appliances were Taiwan (51.3 percent), Hong Kong (44.6 percent), and Singapore (42.8 percent).
"Besides an intense and early onset of summer in some of the markets which has led to increased air-conditioner sales, we also observed more household buying the more expensive inverter type air conditioners – reflecting growing awareness of consumers towards its environmental-friendly and energy conservation benefits," said Lim. "This trend is especially gaining prevalence in Taiwan where nearly three in five (58 percent) of all air-conditioners bought are inverter-types."
Another emerging trend brought about by increasing spending power is consumers’ preference to purchase more sophisticated, higher-end products. The survey found the shifts in buying patterns in washing machines from double tub to single tub, top to front loaders, and also upgrading to higher capacity models, according to Lim.
Another example of consumers’ upgrading to higher-end appliances is reflected in the refrigerator segment. In developing markets, two-door top freezer type are gradually replacing the one-door model, while in more affluent economies, there is a rising interest towards the niche segment of multi door refrigerators.
"Consumers these days are more well-informed and conscious about environmental issues, thanks to global activities such as Earth Hour and other government campaigns to raise awareness of its importance," said Lim. "As such trends persist, we can predict that the future of the home appliance industry will significantly be shaped accordingly and we can expect more environmental friendly appliances occupying a substantial proportion of the market."