Regional sales of major appliances drop by 3%

More than 20.5 billion units of air-conditioners, washing machines, refrigerators, and microwave ovens were sold across eight Southeast Asian countries in the period. 

GfK retail audit tracking of the major domestic appliances (MDA) sector found that consumers in Singapore, Malaysia, Thailand, Vietnam, Indonesia, the Philippines, Cambodia and Laos reported a slight slowdown in consumer demand, by around 3 per cent, between August 2013 and July this year, compared with the same period a year ago. 

The strongest performances were seen in developing Cambodia and Laos, both reporting strong double-digit surges in both value and volume. In Cambodia, sales value rose 11 per cent and volume was up 17 per cent, while in Laos the figures were 59 and 21 per cent over the previous year. 

“Generally, Southeast Asia’s MDA sector is still on an upward trend, with countries like Vietnam and [the] Philippines continuing to reflect strong demand,” said Jasmine Lim, home and lifestyle account director at GfK Asia. “The slower overall growth this year was largely attributed to the weaker performances of Thailand and Indonesia due to local factors.”

The political situation in Thailand in the early part of this year was noted as one of the reasons for the stifled performance of the MDA market. Meanwhile, Indonesia also turned in a lacklustre performance due to increases in fuel prices and electricity tariffs and the political uncertainty resulting from the recent election.

More than 7.7 million refrigerators valued at $2.12 billion were sold over the 12-month period, making fridges the biggest contributing segment in the sector in terms of both value and volume. 

In spite of the lower consumer demand in Indonesia, that country continued to reign as the largest market, selling well over 3 million refrigerators worth nearly $606 million. The second-largest refrigerator market in this region, valued at almost $534 million, was Vietnam with a turnover of 1.85 million units. 

“With the ongoing modernisation of the developing economies in Southeast Asia, demand for two-door [refrigerator-freezers] has been on a rapid rise, such that these models have displaced the one-door models to become the preferred choice,” Lim said. “Today, they make up more than half of all refrigerator sales [in terms of volume] and  [are] the most common type consumers choose to buy in almost all the countries.”

More than $2 billion was spent on nearly 5 million air-conditioners across Southeast Asia, accounting for nearly a quarter of all major appliances sold in the region. Vietnam reported strong growth of 25 per cent in both volume and value, generating $480 million in total air-con sales in the period. 

“It is worth highlighting the inclination of households acquiring inverter models due to the growing concern towards electricity consumption, especially in Vietnam, as the cost [of electricity] has gone up notably in recent years,” Lim said. “Our findings revealed that demand for inverter air-cons  [has] shot up at a rate double that of non-inverter models.” 

GfK was a partner at the recent “IFA 2014” trade fair held in Berlin and shared global insights into trends of the MDA market, which saw the sector (excluding North America) developing positively in the first half of the year. Overall, volume sales outside North America were up 2 per cent. In terms of revenue, the industry registered growth of 4 per cent.