Enjoy a 15% discount when you use the code EQLYJUNE24 at checkout from the 17th to the 30th of June 2024

Appliances and Electronics Our insights capture shifts in consumer lifestyles and themes impacting the global consumer appliances, electronics, and toys and games markets. Themes include new business models, sustainability, innovation and the future home.

Growth Opportunities for Consumer Appliances in Asia Pacific

2/16/2024
Jason Tjiptadi Profile Picture
Jason Tjiptadi Bio
Haikal Sufiyan Profile Picture
Haikal Sufiyan Bio
Share:

The consumer appliances market in Asia Pacific faces uncertainties in 2024 amid low consumer confidence. Volume growth is projected at 1.4%, falling short of 2021 levels and down 5% from pre-pandemic levels due to persistent high federal interest rates and economic uncertainties, leading to cautious spending. China, contributing to 60% of Asia’s appliances sales, grapples with a real estate slump and weak consumer demand, impacting short-term prospects. Despite short-term challenges, the industry anticipates rapid growth over the next five years.

Developing countries like Indonesia, India and the Philippines expect over 25% absolute volume growth for major appliances, while more mature markets like China and South Korea still foresee double-digit growth

Source: Euromonitor International

The potential of appliances rental and subscription services

Appliances rental and subscription is a relatively untapped market in Asia Pacific, with manufacturers showing increased interest in recent years.

18% of Asia Pacific respondents are open to renting items for a set time period instead of buying them

Source: According to Euromonitor’s Voice of the Consumer: Lifestyles Survey 2023

The business model has found success in South Korea, where LG generated approximately USD650 million from its rental business in 2022, equating to about 4% of South Korea’s appliances market. The success of the model is attributed to its appeal among young consumers accustomed to the sharing economy and renters finding it inconvenient to move their appliances and fit them with a new rental unit interior. Low rental fees and no upfront cost also make it appealing to middle-income millennials and Gen Z consumers. With other Asia Pacific countries seeing rising numbers of housing rentals and young population, trying a similar model will likely result in a similar outcome.

Chart showing shopping preferences in AP

Manufacturers in Asia Pacific have started introducing the concept to yield similar success. Haier in Thailand provides an hourly air conditioning service at home where consumers can get a free air conditioner with free installation but pay USD0.12 per hour of usage. Meanwhile, Panasonic Japan released an appliance-food subscription, called “foodable”, offering a subscription service that combines kitchen appliances with curated food items. Looking forward, easier access to renting as well as partnership with various industries to offer subscription bundles will help drive interest and keep consumers engaged.

Evolution of smart home technologies

The smart home industry has evolved significantly, with distinct trends in East Asia and Southeast Asia shaping consumer preferences. East Asia's focus on kitchen appliances reflects a cultural shift towards efficiency and time saving, driven by post-pandemic lifestyle changes.

South Korea leads in the smart appliances ratio with a 49% share, largely due to the contributions of industry heavyweights, LG and Samsung, starkly contrasting with Southeast Asia's average share of just 7%

Source: Euromonitor International

The broader trend towards smart home adoption encompasses smart living, affordability and the integration of Matter for improved device interoperability. Manufacturers are aligning with consumer demand for affordable smart technologies, indicating a shift towards more accessible, advanced appliances. Hence, the growing affordability factor drives the adaptation of smart appliances. The growing smart appliance adoption among seniors, driven by the need for health monitoring and ease of use, highlights the industry's adaptability to demographic shifts.

Sustainability: A continued focus

Sustainability has emerged as a pivotal focus, driven by global environmental challenges and the quest for energy efficiency. According to Euromonitor’s Voice of the Industry: Sustainability Survey conducted in 2023, 73% of sustainability initiatives are led by CEOs, highlighting the significant importance of sustainability in corporate leadership. This reflects the urgent nature of sustainability issues for company leaders. In the Asia Pacific region, government initiatives such as Singapore's incentives for energy-efficient appliances and Indonesia's e-waste management efforts play a vital role in guiding the market towards sustainable practices.

The trend towards net-zero homes underscores a growing consumer awareness of the environmental impact of their choices, with energy-efficient appliances playing a crucial role in minimising household carbon footprints. Manufacturers are acknowledging their role in this shift, incorporating sustainability into their business models without sacrificing profitability. For example, Arçelik's commitment to achieving net-zero emissions across its value chain by 2050 is expected to result in cost savings. The industry's dedication to sustainable practices not only addresses environmental concerns but also aligns with the changing expectations of consumers, leading the way to a more sustainable, efficient future in the consumer appliances industry.

In conclusion, while the consumer appliances market in Asia Pacific might slow down in the next year or two, it has the potential to see rapid growth in the next decade, driven by the fast-growing economy and middle-income households. With consumers having more purchasing power, manufacturers are expected to continue innovating their products and business models to cater to the evolving needs.

Read our article, Five Appliances Trends to Watch in 2024, for more analysis on consumer appliances trends. Or download our reports, World Market for Major Appliances and Technology or Sustainability Leadership in Appliances: A Strategic Discussion, for in-depth trend descriptions, case studies and strategic recommendations.

Interested in more insights? Subscribe to our content

Explore More

Shop Our Reports

Retail Reinvention: A Framework for Future Growth

New business models, channels and shopper expectations continue to change retail, redefining industry rules and relationships and disrupting the path to…

View Report

World Market for Toys and Games

Sales of toys and games are forecast to rebound from a sharp decline in 2022, with a return to growth over the forecast period, despite ongoing inflationary…

View Report

Vacuum Cleaners in China: Consumer Trends, Brand Strategies, and Innovation

The Chinese vacuum cleaner market is the most competitive and innovative. Brands are known to launch two new models a year, trying to out-innovate each other.…

View Report
Related Content Technology or Sustainability Leadership in Appliances: A Strategic Discussion Learn More
;