Driving future growth home appliances

A close look at the home appliances industry reveals a rise in smart home appliances to meet evolving customer needs

The home appliances industry is currently witnessing a renaissance. Consumers are moving away from standard equipment and looking to make smart purchases. The smart home appliances market is expected to witness a significant growth in the coming years, due to technological advancement in electronics and communication sectors and the growing need for energy efficiency. Additionally, increasing purchasing power and improving lifestyles are fostering the demand for smart home appliances around the world, especially in the UAE where the residents are known to embrace lifestyle gadgetry.
The world smart home appliances market is segmented into appliances such as washing machines, refrigerators, dishwashers, air conditioners and other small electrical appliances such as coffee machines, vacuum cleaners, etc. A report by Euromonitor International found that among the types of smart home appliances, smart washing machines generate the highest revenue in the market. These appliances are operated using technologies such as Wi-Fi, Radio Frequency Identification and Bluetooth.
The growth of the home appliances industry has been phenomenal over the years. Companies have launched innovative products to meet the ever-growing need of tech-savvy consumers. They have expanded rapidly into the burgeoning consumer markets.
This year, the market will be faced by concerns of CO2 emissions that will most likely trigger demand for air purifiers in the coming years. Also, more awareness about healthy eating has driven the growth for light fryers.
Further, a lack of water and energy resources will see people opting for more energy-efficient appliances. Split air conditioners are also expected to have the greatest potential due to tangible benefits in energy savings and convenience.
There will be an increasing demand for built-in appliances, and rising disposable incomes in emerging countries will drive up the volume. As per the Euromonitor report, automatic washing machines, fridge freezers, air conditioners and microwaves will remain high growth areas. On the other hand, products such as coffee machines and robotic vacuum cleaners will post high growth in developed markets.
It also found that global Internet retailing of consumer appliances increased by 280 per cent between 2008 and 2013, driven mainly by the expansion of ease of access, the growing use of smartphones, and the increased number of Internet retailers.
Reports also highlighted that of all segments in the industry, the home comfort segment is most likely to grow at the highest pace. New product development, increasing urbanisation and rising working class population are the driving forces of the global household appliances industry.
Some of the popular trends this year include developing 'Green Machines' or rather energy-efficient machines. A number of companies are meeting the set green standards and developing products that use 10 to 15 per cent less energy and water than the standard.
Also, appliances are growing in size. For example, refrigerators on an average used to be of 18 to 20 cubic feet, but last year's average was 22 cubic feet. This move has been driven by busy lifestyles as people expect more storage, according to changing needs.
Spotlight on the UAE
Last year, consumer appliances saw a strong retail volume growth on an annual basis. Strong growth is being driven by a number of trends, including a shift from renting to home ownership and a shift from unfurnished to semi-furnished property. A rise in the population is also fuelling growth, while the consumer base for many areas is also being swelled by an increase in tourist demand, as shopping tourism continues to see strong growth in the UAE.
Last year alone 2.94 million units of consumer appliances were sold in the country. The sales are expected to reach 3.2 million by year-end and four million by 2019, reports Euromonitor International. Of these, health-oriented appliances are showing a positive trend with 14,800 juice extractors sold in 2014 - a number that's expected to grow to 17,600 units. Similarly, electric steamers clocked up sales of 19,800 units, and are expected to reach 25,800 units, and by 2019, it is estimated to be more than 50,000 units. Electric grills and electric steamers showed an average growth of 30 per cent in 2014, a trend that is expected to continue in the coming years.
There is also a growing focus on health and wellness in the country, and this is linked to the concern over high levels of lifestyle diseases. This is supporting sales growth in many areas with food preparation appliances, for example, benefitting from growing interest in purchasing items such as grills. There has also been an increase in demand for air purifiers and steam vacuum cleaners due to certain health concerns.
A report found that consumers in the UAE tend to prefer well-known global brands, while these players also benefit from strong investment in innovation. However, purchasing decisions are shaped by price promotions.
The consumer appliances market is expected to continue to see a strong performance, with almost all areas seeing good retail volume growth. A focus on energy efficiency will also drive sales in the coming years. The health and wellness trend is also expected to continue to have a strong impact, as consumers seek healthier diets via convenient consumer appliances.
supplements@khaleejtimes.com