The increasing pace of change in the global market for household appliances stems from a number of trends such as increased consumer power, digitalization, sustainability, consolidation and a growing middle class. These changes are placing demands on investments and economies of scale, but also open up major opportunities.
For simplification purposes, the global market for household appliances can be split into two parts. In the mature markets (Western Europe, North America, Japan and Australia/New Zealand), population growth is low and sales are dominated by replacement products. However, growth markets (Africa, the Middle East, Eastern Europe, Latin America, Southeast Asia and China) are characterized by rapidly rising living standards and a large number of new households being able to invest in appliances and other household products.
For more information about the development in key markets, see the latest Annual Review.
The increasing pace of change in the global market stems from a number of trends that influence volumes and the types of products that are in demand.
- Consumer power is growing as increasingly well-informed customers easily can access information about prices, offers and product characteristics. This means that Electrolux, as well as other brands, need to offer transparent information about how the products and offers are differentiated to meet customer needs.
- Digitalization plays an important role in increasing consumer power. Mobile solutions and access to the Internet place demands on Electrolux and increase opportunities to interact with consumers in new ways. Digitalization also provides substantial opportunities to develop increasingly advanced products, such as connected products, as well as making the Group’s operations more efficient.
- Sustainability is becoming more important for customers and consumers as well as authorities, who demand that manufacturers develop and offer sustainable products. This trend has been apparent for a number of years but development is now accelerating at varying paces in the different regions.
- A global middle class is expanding as a result of strong economic growth in emerging economies. This trend has been visible for many years and will continue.
- Consolidation in the sector is, to a large extent, driven by the above trends as they result in challenges that require major investments and economies of scale. Manufacturers and retailers of household appliances are becoming fewer, larger and more international.