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Major Domestic Appliances Industry to Achieve Double-Digit Growth in Southeast Asia in 2011

Urbanization and higher purchasing power in developing economies have been boosting consumer demand for more major domestic appliances and contributing to the flourishing trade in Southeast Asia. GfK retail audit of air conditioners, refrigerators, washing machines and microwave ovens across Malaysia, Thailand, Indonesia, Vietnam, Philippines and Singapore reported over 17.5 million units of such appliances being sold in 2011, bringing the total value of Major Domestic Appliances (MDA) sector to USD4.95 billion—12 percent more than 2010.

Although all segments in MDA reported positive growth, it was the surge in sales of washing machines—by 18 percent in value and 16 percent in volume—that was a key driver in the sector’s overall good performance.

“The developing markets in Southeast Asia are rapidly modernizing and embracing modern technology,” observed Ms. Jasmine Lim, Regional Account Director for Home & Lifestyle. “The most lucrative market now appears to be Indonesia, who had emerged the star performer in the region by raking in the highest sales in overall MDA as well as washing machines in 2011.”

The value of the MDA sector in Indonesia reported an upsurge of 24 percent in 2011, with all the tracked segments attaining double digit growth in sales value over the previous year. However, washing machines outpaced the rest with its outstanding 31 percent growth in sales value and volume. Last year, Indonesians bought a total of 2.08 million washing machines –490,000 units more than they did the previous year.

Across the region, Indonesia has the lowest penetration of single tub washing machines with only slightly over one in four (27%) sold last year being a single tub type, one of the key reasons being the lack of adequate water pressure in various areas of the country.

“Some Indonesian households are using water pumps in tandem with their single tub washing machines in order to generate the water pressure required to increase the water pressure in the supply pipes,” noted Ms. Lim. “GfK retail tracking in four major cities in the country showed that more than 161,500 units of water pumps were sold in 2011, and the market is anticipated to grow at 10 to15 percent in 2012, partially driven by the rising washing machine sales.”

Recent findings also revealed some other key trends arising in the region. Elsewhere in the region, it is apparent that there is a rising consumer preference towards the front load washer-dryer type, as seen in markets like Singapore, Thailand, and Vietnam. Southeast Asians are also displaying an affinity for Korean and Japanese brands when it comes to the major domestic appliances. Nearly 70 percent of the region’s market is shared between five major Korean and Japanese manufacturers.

“Even in Singapore, the only mature market in this region, major domestic appliances are expected to still be in demand due to anticipated completion of new homes which will fuel the need for essential home appliances,” commented Ms. Lim.  “Furthermore, with the low household penetration of such appliances in the rest of the developing markets, we can expect to see continued strong growth of this sector in Southeast Asia in 2012 and beyond,” concluded Ms. Lim.