Southeast Asia is a particularly important growth region for Electrolux. The innovative products the Group has developed to meet the region’s particular needs have resulted in substantial growth, high profitability and expanded market shares.
The market
In 2010, the market for household appliances in the Asia/Pacific region was worth approximately SEK 375 billion, of which the Chinese market is the largest at about SEK 180 billion. The Australian household-appliances market accounted for SEK 19 billion, which was slightly lower from the preceding year.
Demand for household appliances increased substantially in Southeast Asia and China during the year. Growth derived primarily from the low-price segment, largely due to improved living standards. The region’s rapidly growing middle-class segment has led to increased demand for such products as air-conditioning equipment and washing machines. In 2010, the market for household appliances grew by more than 10% in China, Vietnam, Thailand, Singapore, Indonesia and the Philippines. Built-in kitchen products represent a rapidly-growing segment in Southeast Asia. The entire region is undergoing rapid urbanization.
The region has no clear market leader for household appliances. Electrolux is the market leader in Australia. Haier and Midea are the largest producers in China accounting for approximately 22% and 13% of the market, respectively, followed by a raft of local and international producers with relatively small market shares. Southeast Asian consumers find European brands appealing, but their market shares are still small.
Retailers
There is no region-wide retail chain. However, the trend is for increased consolidation of retailers. In Australia, five large retail chains account for approximately 90% of the market.
Most household appliances in Southeast Asia are sold in small, local stores. However, in urban areas, a large proportion of appliances is sold through department stores, superstores and retail chains. The Chinese market is dominated by two large domestic chains, Gome and Suning, which specialize in electronics, and only a few international chains have as yet established operations in China.
The Group’s position
Approximately 70% of Electrolux sales of household appliances in the Asia/Pacific region is in Australia, where the Group is the market leader. The Electrolux brand is positioned in the premium-price segment and focuses on innovation and design as well as energy- and water-efficiency. The Group’s Westinghouse and Simpson brands have strong positions in the mass-market segment.
Electrolux is a very strong brand in Southeast Asia, which is an important growth area for the Group. The innovative products developed by the Group to meet the specific needs of the region in terms of temperature, humidity and food culture, have generated strong growth, high profitability and increasing market shares. Among other initiatives, Electrolux has launched, with great success, built-in products for kitchens that are specifically adapted to suit the needs of Asian consumers. Electrolux increased its sales of vacuum cleaners significantly in 2010. Sales of vacuum cleaners are conducted via household-appliances retailers and other channels.
In China, Electrolux implemented structural measures and repositioned the product offering – actions that have begun to yield results.