COVID-19 has changed the Indian market scenario, as the world, that too all of a sudden. Perhaps forever. The dishwasher category, while still a nascent one, is expected to grow significantly in India, to 3-4 times its current size in the coming years.
The recent years have witnessed an increased investment from the consumers toward appliances that are sophisticated but easy to maintain. As a result, appliances have been undergoing a drastic transformation over the past decade with new innovations.
The COVID-19 pandemic has led dishwashers on the way of becoming one of the most common elements of the smart kitchen with the purpose of the automatic cleaning of the dishware. This changing preference among the consumers is encouraging manufacturers to add new streamlined appliances to their portfolio such as under-the-sink dishwashers to cater to homeowners who have restricted kitchen spaces.
Indian market scenario…
…in the pre-COVID times
Dishwashers have never been an active segment for the Indian consumers. They were sold mainly to customers who returned to India, having lived overseas. The product category is perceived to be a luxury even amongst urban, middle-class consumers of India. This situation has been maintained by dishwashers’ high prices, low levels of consumer awareness of their potential benefits, and limited availability.
Concerns about water and electricity usage, with an often-irregular electricity supply, also have had an adverse effect on demand. In addition, the category’s potential development was further constrained by the availability and affordability of domestic help and the limited space available in Indian homes.
To stimulate interest in dishwashers in India, manufacturers have been working to tailor the product to Indian taste and requirement, for instance, a feature capable of intensive cleaning of the kadhai, the deep Indian cooking pot. Brands are targeting consumers with live demonstrations. Some are also partnering with dishwashing detergent makers for test marketing.
The presence of top appliances brands is limited in dishwashers in the Indian market. Based on the distribution channel, the online stores are estimated to hold the largest share of the market. Since online retailing is able to provide more discounts and wider options to purchase, the platform has become popular. The increasing penetration of the internet in India is also boosting the online market for dishwashers.
The pandemic changes everything
While the dishwasher brands had been involved in creating awareness about the product category, it is COVID-19, followed by nationwide lockdown, that accelerated the penetration of the product in Indian households. The fear of the virus has forced consumers to keep their domestic help at bay, and this has led to dishwasher growth by a whopping, triple-digit growth over 2019.
But a shortage due to a disruption in the global supply chain has played spoilsport. Most major companies have liquidated whatever stock they had in their warehouses, and newer imports are uncertain. Unlike washing machines, dishwashers are not yet manufactured in India.
Consumers are signing up on waitlists to purchase a dishwasher and prospective buyers are numbering into hundreds and thousands. So much so, that brands are now hugely over-booked. Consumers looking for effort minimization, storage, and hygiene is the new normal.
There is clearly a trend of substituting domestic help with gadgets. With spends restricted on outdoor activities like travel, eating out, and shopping, consumers are investing on products which can help them multi-task.
Hence, once a rarity in Indian homes, dishwashers have acquired newfound importance, particularly in Tier-I households as well as in other posh areas in India.
Dishwashers earlier comprised just up to 5 percent brands’ sales. And now, yearly targets for dishwashers are being met in months, if not weeks. To tap into the rising demand, brands are now planning to launch an entirely new product range of dishwashers ahead of the festive season, supported by ad campaigns and dealer incentives.
Global market dynamics
The global smart dishwashers market size was valued at USD 2.4 billion in 2019 and is anticipated to grow at a CAGR of 9.4 percent from 2020 to 2027.
Europe dominated the market by accounting for 42.7 percent market share in 2019. It is projected to witness a CAGR of 8.6 percent. In Europe, Germany is foreseen to remain dominant and expected to witness a notable CAGR.
North America is estimated to be the significant shareholder of the market in 2019. As per the IoT Business News, in 2019, North America had an installed base of 33.8 million smart homes, which represents a penetration of 24 percent.
APAC will offer several growth opportunities to market vendors. The changing lifestyles and time-pressed schedules, the increase in consumer sophistication, and the rising household incomes will significantly drive the market in this region. Thirty-seven percent of the overall market’s growth will originate from APAC. China is the key market for dishwashers in APAC.
Freestanding dishwashers are most popular among consumers who prefer advanced products at lower costs. These types of dishwashers have also gained immense popularity among consumers who rearrange their kitchens from time to time because these dishwashers can easily move from one place to another place. Hence, consumers do not incur additional plumbing and installation charges.
The rising use of stainless-steel dishwasher interiors, one of the key trends, is driving the market. Robustness and low maintenance are the two primary factors influencing purchase decision.
Additionally, stainless-steel dishwashers have a lower wattage heating element for drying and they also save energy. They help in protecting heat-sensitive items placed on the lower rack of the dishwashers.
Consumer’s inclination toward technology advancements combined with changing social dynamics has contributed to the rise of modern kitchens. Hence, increasing spending on home improvement projects and home remodeling is also driving the demand for smart dishwashers. These savvy dishwashers are highly efficient and flexible and address common concerns including food particles redepositing on plates or dishes. The enhanced technology features in smart dishwasher enable users to incorporate their dishwasher into a smart home design.The growing demand for kitchen appliances with features such as the convenience of remote operation as well as the unique experience offered by them will drive demand for the smart category in the coming years.
Digitization of living spaces is one of the most rapidly emerging trends of this decade. As per the IEEE, with the advent of 5G network, over 50 billion devices are expected to be functioning on the Internet of Things by 2025.
Smart and interactive electronic gadgets, devices, and appliances are increasingly becoming an integral part of a convenient and luxurious lifestyle. Technological advancements have turned smartphones into a universal remote, which can be used to regulate any smart appliances.
Many consumers are looking for a smart kitchen appliance that not only complements the interior of a kitchen but also bring smoothness in household chores. These factors are likely to drive the market.
However, despite a positive outlook, the high price of smart dishwashers as compared to standard dishwashers is likely to hinder its adoption amongst the middle-income consumer group. As of 2020, the smart dishwashers available in the US market are retailed from USD 500 to USD 2000, while reasonably standard dishwasher costs just under USD 400.
The high cost of smart dishwashers can be justified by its advanced features. However, lower adoption of the product amongst price-sensitive consumers is foreseen to impede market growth up to some extent in the coming years.
The global market of dishwashers is fragmented. The market players are focusing on developing more holistic distribution channels that cater to various customers. This has given rise to omni-channel retailing, which ensures maximum visibility of products in the market. The impact of leading companies on the market is quite high as a majority of them have a global presence.
To strengthen their position and drive revenue growth, many of the market players are adopting strategies such as R&D, innovative product launches, brand building, acquisition, and other crucial long-term strategies. They are striving to build products, which are new in the household appliance industry, seeking breakthrough opportunities in design, concept, and price.
Built-in dishwashers are projected to witness highest CAGR of 9.5 percent. The growth of this segment is attributed to its advanced features as compared to freestanding models, including multiple specialized wash cycles, spray arms, and targeted sprays for hard-to-clean items like dishes or pans.
This type of dishwasher is available with useful options such as digital timers and load-sensing technology, as well as multiple cycles. The appliance can fit beneath counter top, flush to kitchen cabinets, and can provide arranged and streamlined look, which many consumers desire.
While the dishwasher as a concept may have come to life 160 years ago, those early dishwashers were nowhere near as efficient and effective as the machines used today. In fact, the first dishwasher that even remotely resembles modern models was created by an English inventor in 1924, who implemented the rack system and rotating sprayer common in dishwashers today. Still, while the design was good, a lack of indoor plumbing meant that only super wealthy homeowners owned dishwashers.
There are now a number of innovations that make washing dishes easier, such as pre-soak cycles and rotating sprayers – trays and racks are also removable and can be moved around to allow crockery and appliances of all shapes and size. Manufacturers have been continuing to offer potential solutions for drying, including doors that automatically pop open near the end of the cycle so that moisture can escape. The latest involves embedding the interior walls with crystals that heat up when wet to boost the drying cycle.
Just like other kitchen appliances these days, dishwashers have evolved with better technology, more sustainable materials and a lot of advanced features such as WiFi and programmable tiny water jets. Like a family SUV, large dishwashers now come with an optional third row. On the other end of the size spectrum, small, portable countertop dishwashers are a thing now, and they don’t even require a hookup.
Although the price of electricity changes over time in different countries, the manufacturers’ development of more energy-efficient appliances has continued. There is a great consumer demand for products with good energy ratings, which seems to confirm that the group of green consumers is growing.
All dishwashers on the global market today are rated A+ or better. The technical development of the washing cycle has flattened out. The largest improvements occur when new technology is introduced, such as heat pumps or absorption materials to improve the drying process.
Introducing a complex heat pump system in a dishwasher on the market would result in an improvement of 61 kWh per year. Keeping the annual energy use for the different energy labels in mind, this improvement would lead to a significant improvement in the appliance’s energy rating.
However, the introduction of a heat pump system is likely to result in higher maintenance costs. Introducing a new drying technology in the form of an open absorption system would yield an improvement of 70 kWh per year.
The COVID-19 pandemic is impacting the society and the overall economy across the world. The impact of this pandemic is growing day by day as well as affecting the supply chain. The crisis is creating uncertainty in the stock market, massive slowing of supply chain, falling business confidence, and increasing panic among the customer segments.
The pandemic has adversely affected the production process of several industries, including electronics and semiconductor. Trade barriers are further restraining the demand-supply outlook.
As governments of different regions announced total lockdown and temporarily shutdown industries for several months, the overall production process being affected has hindered the overall dishwasher market globally.
The utility-owned segment is mainly being driven by increasing financial incentives and regulatory supports from the governments, globally. The current utility-owned built-in dishwashers are affected primarily by the COVID-19 pandemic.
Most of the projects in China, the US, Germany, and South Korea are delayed, and the companies are facing short-term operational issues due to supply chain constraints and lack of site access. While the pandemic has compelled the consumers to shift their preferences, it has turned the entire electronics and appliances industry and its sub-sectors upside down within no time.
On the contrary, COVID-19 has changed the Indian dishwashers market scenario for good, that too all of a sudden. Perhaps forever. The dishwasher category, while still a nascent one, is expected to grow significantly in India, to 3-4 times its current size in the coming years.
The domestic market is exhibiting signs of an increase in the consumption of the product category. Even though currently there is a lot of interest, there is a severe lack of information among a large section of consumers.
Going forward, it will be crucial for the market players to educate the masses about the usage and relevance of dishwashers. There will be a more concerted marketing push in India from here on in and continuing into the future.