Annual Report 2013

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Market overview

The rapid emergence of an affluent middle class in densely populated growth markets has led to a gradual transformation of the global market for household appliances. By 2017, Electrolux aims to increase the growth markets’ share of sales to at least 50%, while strengthening its position in core markets.

The global market for household appliances can easily be split into two parts. In the core markets (Western Europe, North America, Japan and Australia/New Zealand), population growth is low and sales are dominated by replacement products. The growth markets (Africa, Middle East, Eastern Europe, Latin America, Southeast Asia and China) are instead characterized by rapidly rising living standards and a large number of new households being able to invest in appliances and other household products.

Between 2008 and 2013, global demand for appliances increased significantly, particularly due to strong growth in Asia. In parallel, demand in the Group’s mature core markets declined. In 2013, the demand in growth markets represented 70% of the total market volume for appliances compared with 60% in 2008. In 2013, demand for appliances grew strongly in North America and in the emerging markets, while it declined in several European markets.

Drivers

In addition to the underlying economic growth, the market is driven by a number of factors that influence volumes and the types of products that are in demand. Households tend to be smaller, in terms of both living space and the number of individuals, and many consumers have decreasing time for household chores, while access to information about products and services is simultaneously increasing, not least over the Internet. Climate-change concerns and limited natural resources mean that increasing numbers of consumers are demanding ­energy-­efficient and resource-saving products.

Intense competition

Manufacturers and retailers of household appliances are becoming fewer, larger and more international. The five largest manufacturers of major appliances in the world - Whirlpool, Electrolux, Haier Group, Bosch-Siemens and LG Electronics - accounted for almost half of global sales. In recent years, manufacturers from Asia have increased their market shares. To maintain competitiveness, Electrolux must continue to leverage its global economies of scale. Focus is being directed to developing innovative products based on consumer insight and under strong brands. Despite the increasingly intense competition, Electrolux captured market shares in Latin America, Asia and in several key product segments in North America and Europe in 2013.

With more than 300 million ­middle-class consumers, the Chinese market is already as important as Europe or North America and is growing fast. As a key part of the Group’s growth strategy, Electrolux made its biggest product launch in 2013 in China, with more than 60 new products for kitchen and ­laundry.
Electrolux net sales in growth markets
Electrolux net sales in mature markets
Electrolux core and growth markets
Increasing global demand for major appliances, million units
Between 2008 and 2013, the global market demand for core appliances increased significantly, mainly due to strong growth in emerging markets particularly in Asia. Electrolux strategy is to capitalize on this increased demand in growth markets. Source: Electrolux estimates
Electrolux aims to increase its share of sales in growth markets over the next five years
World population
13% 87%
Core markets Growth markets
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