Supply chain challenges in the HA sector combined with a restrained consumer market, and installation and service delays will lead to a downward trajectory.
Over the past few years, the home appliances market has experienced steady growth, and the trend was earlier expected to continue over the next decade, however the forecast has now been revised downward showing a deep impact of the COVID-19 global outbreak on the market. The transformation from traditional appliances to smart home appliances is considered a revolutionary trend for the industry; and that is why most home appliances companies are rushing to develop and capture market share.
Increasing adoption of innovative and technologically advanced products, coupled with growing awareness regarding eco-friendly and energy-efficient appliances among buyers, are some of the major factors expected to drive growth of the market. Changing lifestyle patterns, increasing investment in R&D activities to innovate energy-efficient products, and product innovations in terms of technology, performance, features, and design, is also expected to bolster growth of the market. The rising number of working women, inclination toward luxury, and tech-savvy appliances, coupled with increasing disposable income, are some of the other factors expected to fuel growth of the market.
The home appliances segment is one of the fastest-growing industries in the Indian market. Home appliances in India have been increasing at a steady pace, driven by both large appliances and small appliances.
However, as COVID-19 continues to spread around the world, there have been significant impacts to consumer behavior, product demand, and retail store, factory, and logistics services availability. Home appliances retailers are being hit the hardest as consumers forego discretionary purchases in favor of stocking up on food and supplies.
The global home appliances market reached a value of nearly USD 307.6 billion in 2019, having grown at a CAGR of 6.9 percent since 2015, and is expected to grow at a CAGR of 8.9 percent to nearly USD 433.4 billion by 2023. The industry growth is expected to accelerate over the next 5 years, driven by product innovation and advancement, leading to portfolio extension and product premiumization.
The competition among home appliances manufacturers is intense as the market is fueled by advances in technology and evolving customer preferences. Some of the product innovations, introduced by leading home appliances companies like improved features, design, and performance will augment growth of the global home appliances market over the next few years.
To address the growing demand for multi-functional household appliances, vendors are innovating to remain competitive and to attract customer attention, expand customer base, and generate demand for their products. Increase in the number of such multifunctional offerings in the global household appliances market will drive the adoption of such products.
The APAC region led the market, followed by EMEA and the Americas, respectively. The region is expected to maintain its dominance and register the highest growth on the back of several factors like rising urbanization, higher spending power, and evolving lifestyles.
The market in North America is expected to dominate the global market in terms of revenue. Factors like technological advancements in appliances, changing consumer preferences, improved living standards, coupled with government initiatives for energy-efficient appliances in countries of the region, are also expected to propel growth of the market. The market in Europe accounted for the second-highest revenue share, followed by markets in APAC, Latin America, and Middle-East and Africa.
By distribution channel, the global market is segmented into supermarket and hypermarket, specialty stores, and e-commerce. Specialty stores segment accounts for major market share revenue, and is expected to maintain its dominance. However, the e-commerce segment is expected to grow at a higher rate on the back of worldwide lockdown caused by the COVID-19 pandemic.
Growth in urbanization has led to more consumers moving into smaller spaces, which means less, and less counter space is becoming available for the latest and kitchen appliances. Therefore, manufacturers continue to combine multi-functionality into singular appliances, helping consumers not only save space, but the cost as well. Why buy a microwave, an oven, and an air fryer, when Amazon offers a 4-in-1 deal? Consumers will continue to view these options as a no-brainer, especially those that live in cities and urban areas.
The latest trend shows that emergence of smart homes is supporting the demand for smart appliances that can be connected to the smartphone, and monitored remotely. Increasing usage of mode of connectivity as a differentiating feature like Wi-Fi and Bluetooth that can be used in and accessed by smartphones and tablets, giving a new way for growth of the market. Manufacturers are also focusing on developing energy-efficient technologies, which include Energy Star specifications and efficiency levels.
The rise of the Internet of Things (IoT) technology also supports the development of smart appliances. Currently, various product categories, like washing machines, refrigerators, and microwave ovens, are available with smart and connected features. Owing to the growth in the demand for smart home appliances, traditional appliances makers have acquired significant capabilities and experience in the smart appliances segment. Technology companies, which are not known for producing appliances, are also entering this segment. The global market for smart home appliances is growing rapidly, supporting the overall market.
Home appliances manufacturers are increasingly offering premium appliances to cater to the growing demand for these product categories and increase revenues. Premium appliances mainly focus on the aesthetics and color of the products, use premium quality materials like metals and glass, and offer an enhanced consumer experience at a premium price.
Examples of premium appliances include side-by-side four-door refrigerators, twin washing machines, and steam ovens. High net-worth individuals (HNIs) as well as young upper-middle-class populations with high disposable incomes are the major consumers of premium household appliances. Global manufacturers are launching a range of premium appliances to capture significant market share.
Smart HA, domestic face of IoT
The smart home appliances market size has the potential to grow by USD 31.66 billion during 2020–2024, and the market’s growth momentum will decelerate during the period. Remotely controlling and managing appliances via a smartphone app is the main benefit offered by connected appliances.
However, this added functionality is not always viewed as a benefit by appliances owners, especially when it comes to smart refrigerators, washing machines, clothes dryers, and dishwashers. The mobile apps for these devices have so far offered only limited features, like appliance-status updates and the ability to cycle power on and off remotely. Despite this shortcoming, appliances makers are moving fast to implement features that will inspire and promote brand loyalty.
An important sales motivator for the smart ranges is peace of mind–using the device’s remote management features, consumers can immediately see the status of their ranges and respond accordingly from afar.
Smart home appliances are still very much considered a luxury item, and given their cost–on average, they cost about 30 to 50 percent more than their conventional counterparts–it is the early tech adopters and more tech-savvy consumers who are most willing to purchase them. Families, or those in lower income households, still do not see the need for smart appliances.
IoT is just getting started. In the coming years, new smart home devices will skyrocket in numbers and variety, all connected to the internet and controlled with smart home apps and smartphones. Washing machines that one can start with a phone from the office before they get home and refrigerators that respond to voice commands to place grocery orders are in the development pipeline.
In their smart home predictions, experts expect a trend from user-driven smart home devices to user-responsive smart home technology. Instead of a human initiating through commands, machines built with artificial intelligence (AI) will use machine learning (ML) to identify patterns and preferences to anticipate our desires, from how often a user wants to vacuum to how bright they want the living rooms.
Smart homes harness computing power and data to optimize energy use in a comprehensive way. From closing blinds when the sun hits certain windows to zoned cooling and heating, smart systems can minimize energy use while increasing comfort. They save money without sacrifice. Adopting new smart home technology will always be a choice. As people adjust to more technology, they will experiment with how much is the right amount.
The future of smart homes and connected technology is already here–and the pace of innovation is fast. As with anything new, exciting possibilities come with concerns and sometimes frustrations. Still, the value in terms of comfort, convenience, health, efficiency, security, and even fun outweigh the cons. In a few short years, it will be hard to remember a time before homes were smart and lives were connected.
Household refrigerators have been an integral part of the majority of households for several decades. The refrigerator is not a new category in India but still, its market is growing with high growth rates owing to the low penetration and huge consumer base. The major players are reducing their prices and launching new models with advanced features and new designs. With the increasing per-capita income levels, declining prices, and consumer finance the refrigerators market is expected to grow in future years. Available features, warranty, quality, space, price, cleaning ease functionality, energy star rating, and styling are currently major influential factors while purchasing a refrigerator.
Globally, the rising demand for higher-capacity and frost-free products is a trend that market players have noted, besides focusing on higher-end spectrum or premium products that ultimately offer higher profit. The online sales channel is expected to gain a higher market share by 2026 owing to the high sales of electronic appliances through e-commerce websites and company online portals. The manufacturers and e-commerce companies are partnering to provide advanced offerings, faster delivery, and convenience.
Manufacturers are implementing IoT and embedded sensors in their products to improve overall functionality. They are introducing advanced human-machine interface designs in refrigerators, and also manufacturing models that can automatically recognize the type and weight of the food stored in the refrigerator, and adjust and monitor the temperature as per requirement. They are partnering with various technology, software, and component providers to support technical developments in intelligent refrigerators. A compressor-less refrigerator is one of the notable technological innovations, which will become a significant growth factor in the market.
The advent of AI technology has brought a new wave of innovation to create a smart refrigerator. In addition, the integration of IoT to produce the smart refrigerator is an inevitable result of the IoT technology and a direct reflection of consumers’ pursuit of higher quality, and a more convenient life. Product launches with technical advancements and regional expansion by established refrigerator manufacturers have created opportunities for market development.
The residential application is witnessing a high market share. Consumers in North America and Europe are shifting toward intelligent refrigerators. The market statistics of the APAC region are growing rapidly. However, Indian consumers do not seem to be warming up to this technology yet.
The growing pace of globalization is playing a crucial role in driving the washing machines market. The global washing machines market is prognosticated to rake in ample amount of demand from the residential sector as consumers find a heated inclination toward smart and connected products.
In case of the Indian washing machines market, improvement in rural electrification is one of the driving factors. Moreover, the rising affordability of washing machines and growing urbanization is further boosting the demand across the country. India’s washing machines market is expected to witness high growth.
Various technological improvements have been carried out in washing machines during the last decade, leading to their higher efficiency, in terms of saving electricity and water, and incorporating smart features.
Moreover, government initiatives to support controlled energy consumption, digitization, and a large demand in developing economies are expected to add to the growth of the market.
Washing machines with higher capacity load have been witnessing higher demand in the last few years. In addition to this, consumers are increasingly transitioning from semi-automatic to fully automatic washing machines. Technological advancements will continue to drive the growth of this market.
Increasing replacements made from conventional washing machines to advanced and latest machines will ensure growth of the market in developed nations. The increasing population and improvement in economy will drive the growth of this market in the developing nations.
Increased adoption of the automatic washing process as an essential part of everyday housekeeping activity among consumers has created lucrative growth prospects. Moreover, growing scarcity of water across the globe is compelling manufactures to devise products with technology that minimizes the use of water. Thus, these smart washing machines with Energy Star ratings can save a lot of water as compared to conventional washing machines.
Conventional washing machines wash approximately 300 loads of clothes and consume about 12,000 gallons of water in a year. Therefore, consumers, in order to address the growing issue of water scarcity, are opting for such efficient and technology-integrated washing equipment.
Consumers are increasingly shifting toward the adoption of front-load washing machines on account of their large loading capacity as well as water- and energy-efficiency features. Thus, manufacturers are entering this segment with new product launches in order to attain a greater share in the smart washing machines market.
Convenience, coupled with lower prices, is a key factor driving the demand for top-load washing machines, particularly in developing economies, owing to a large middle-class customer base.
Growing hot water needs from residential and commercial establishments, coupled with increasing investments toward R&D activities, leading to product innovation and advancements including communication and control features, are driving the water heaters market globally.
Water heating is considered as the top energy expense in the home. However, homeowners are looking for better water heaters to reduce their monthly bill. This is leading the manufacturers to develop innovative products that consume less energy.
With consumers moving toward adopting tankless and high-efficiency water heater technology, the manufacturers are focusing on redesigning their products to maintain their position in the market.
Meanwhile, governments in different countries are also encouraging the use of natural sources of energy, thereby driving the demand for solar water heaters. Energy-efficient hybrid water heaters are also being developed on a large scale by manufacturers.
Smart water heaters are gaining traction in the global market. A consumer can schedule hot water usage time, and turn the water heater on and off with an application. Some of these water heaters can also display energy used along with some other data.
In order to offer better technology and innovative products, companies are also focusing on mergers and acquisitions. Manufacturers are increasingly investing in R&D of energy-efficient and cost-effective water heater technology.
The sudden outbreak of COVID-19 has majorly impacted the global economy, thereby limiting the business growth. However, development of new strategies to respond to the crisis, including healthcare infrastructure development, among others, will drive the market landscape.
Inorganic growth ventures including mergers and acquisitions, and strategic partnerships by the leading companies will strengthen the market growth. Expansion of the distribution channels in the emerging economies, primarily in the Tier-II and Tier-III cities is anticipated to influence the market growth. The industry key players involve in joint ventures to innovate their existing product line to enhance their overall customer base.
Water purifiers are no longer considered to be consumer durables limited to affluent households. Increasing awareness, coupled with lower prices, has increased the penetration of water purifiers across lower-income groups and rural households all over the world.
Water purification has evolved, from using clay to filter out the sediments, to advanced water purification technologies that use electricity and the internet.
The growing knowledge about the standards of drinking water quality in the emerging nations is consequently fostering the growth of the market. The advancement in water purification systems will enable speedy expansion of the market.
Similarly, the implementation of point-of-entry and point-of-use filter systems to eliminate pathogens has led to the proliferation of the market.
The perpetual innovation in technological processes, involving ultra-violet, reverse osmosis, and gravity-based purifiers, is a vital factor augmenting the growth of the market.
The emergence of smart water purifiers with trailblazing technologies will incite the adoption of purifiers in residential and commercial sectors.
The Indian water purifiers market is expected to grow with a significant growth rate in the coming years. The Indian market is dominated by reverse osmosis (RO) water purifiers owing to the high total dissolved solid (TDS) level of water across the majority of the states, coupled with strong purification capability of RO technology for high TDS water purification.
Manufacturers are producing affordable water-purifying units in order to penetrate the market. The price of water purifiers ranges from `500 to `20,000. Low-cost purifiers are easy to maintain and the refilling/refurbishing cost is also not very high.
Water purifiers are considered to be a push product requiring considerable concept selling in rural markets, and penetration of water purifiers in rural India is also lower due to economic factors, poor sales, and lack of distribution networks.
Earlier, the demand for air purifiers was primarily driven by consumers suffering from respiratory disorders. In the current scenario, the market is driven by the rising prevalence of airborne diseases along with rising pollution levels in urban areas. Rising health consciousness among consumers is positively influencing the demand. Increasing product demand from hotels in order to meet consumer needs for comfort, especially in cities with high levels of air pollution, is anticipated to fuel the market growth in the near future.
Government efforts to regulate air pollution by introducing stringent regulations and indoor air quality standards are projected to drive the market growth. Additionally, numerous air pollution control campaigns undertaken across the globe by the governments and the NGOs are further anticipated to boost the demand for air-purifier products.
HEPA filters are extremely efficient in trapping airborne particles like dust, pollen, smoke, and bio-contaminants. Activated carbon filters have exceptional trapping capacity on account of the larger surface area of carbon granules that makes them very effective in trapping gases, fumes, and odors.
Though HEPA filters are highly effective in trapping airborne particles, they are ineffective against gases, odors, and chemicals. Hence, activated carbon filters are generally used in conjunction with HEPA filters to improve the efficiency of air purifiers.
In case of ionic filters technology, air ionizers generate negative ions that attack harmful airborne particles and help to lock them in. This factor is fueling the application of the technology. The other technology segment includes UV light technology, electrostatic precipitators, and ozone generators.
In the Indian scenario, the market is developing at a high pace. Deteriorating air quality, rising respiratory diseases, coupled with growing consumer awareness, are driving the demand for air purifiers in the country. Despite various technological developments, air purifiers have been perceived as a luxury item because of the high installation and maintenance cost.
However, competition in the Indian air purifiers market is rising, which is bringing down the prices, and with growing disposable income, air purifiers are gradually being perceived as a utility product, specifically in the residential sector.
Manufacturers are focusing on developing low-cost air purifiers to increase the canopy to cater and penetrate deeper into the middle-class segment to further drive the sales of air purifiers in India. Increased spending by manufacturers on marketing and advertisement of their brands is also creating awareness on the benefits of using air purifiers as also boosting the demand for air purifiers in India.
Online distribution channel is expected to grow at the fastest rate owing to the offering of a diversified range of products, which gives buyers multiple options along with lower product price compared to retail stores. The rapid urbanization, and a cheaper and more convenient way to shop, will drive the sales of air purifiers through this channel.
The COVID-19 effects on home appliances will be deeper than the one following the global financial crisis in 2008-09 impacting the outlook for the sector for the remainder of 2020, with unit shipment forecasts revised downward −3.1 percent in 2020 compared to 2019.
By the start of 2021, manufacturing and consumption will begin to return to their pre-pandemic levels, but growth in 2021 is still projected to be softer than original forecasts, as in 2022 and 2023.
The global smart homes market is expected to fall nearly USD 20 billion short of revenue expectations in 2020, according to Omdia, which will further impact the growth of smart appliances.
Due to the vast number of products available, the smart homes market tends to be more resilient in the face of economic challenges.
As the Asia region begins to recover from the coronavirus pandemic, production should ramp back up. However, depleted inventories could put added strain on potentially lower demand to start the second quarter of 2020. Nevertheless, the smart homes market is expected to undergo a correction during 2020, where growth will slow down for most countries.
Overall, supply chain challenges, combined with a restrained consumer market, and and installation and service delays, could further lead to lower growth prospects of home appliances, and slow the adoption of intelligent technology in the sector in 2020.-TVJ Bureau