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HOUSEHOLD EQUIPMENT

Recovery on the cards for 2021

M

MEDIUM RISK for entreprises

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

Updated in July 2021.
  • Structural growth drivers (population growth, urbanization)
  • Capacity to innovate and create profitable niche markets
  • Strong sensitivity to swings in consumer sentiment and real estate / construction activity
  • Concentrated customer base (specialty retailers)
  • Consumer electronics: saturated products markets (computers, mobile phones, TV sets, audio equipment, etc.)
  • Furniture: fragmented industry, domination of small and medium-sized enterprises
Updated in July 2021.

What to watch ? 

  • Easing of the sanitary situation allowing greater continuity in retail activity.
  • Consumer confidence and consumer spending in large markets.
  • Resilience of the real estate market.
  • Increase in commodity prices (copper, plastic, steel).
useful description of image if informative and not decoration only.
2020 proved far less dramatic than anticipated for the household equipment industry. A spectacular recovery in sales in the world's largest markets during the second quarter helped the majority of dominant players mitigate a tough start into 2020, which saw a prolonged freeze in manufacturing, trade and retail activity. Global sales across the consumer electronics, household appliance and furniture industries are estimated to have contracted by only -5% to -10%, with significant dispersion between regions (Asia-Pacific fared better than North America, which fared better than Europe) and segments (appliances have been more resilient overall).

Trends at play in H2 2020 continued in H1 2021 despite a new wave of retail restrictions hurting some large European markets. A resilient real estate market, combined with still strong consumer interest in home improvement goods during the pandemic, sent retail sales of household equipment above their pre-crisis levels. The return to a sense of normal with the easing of sanitary restrictions should lead to a normalization of sales levels, meaning they should begin to recede in H2 2021 vs H1 2021. Softer sales may, in turn, weigh on manufacturers' capacities to pass rising manufacturing costs to prices in times when the costs of key commodities (wood, plastic, copper, steel) are standing at high levels.
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useful description of image if informative and not decoration only.

Household Equipment comprises different industries involved in the design and manufacturing of domestic equipment for households. While companies exhibit very different profiles between segments, they have in common a strong sensitivity to consumer spending and a reliance on Asia Pacific, mostly China, for their manufacturing activities. Mature economies still make up for the vast majority of demand.

- Consumer electronics: audio and video equipment, computers, mobile phones etc. with an estimated USD2,450bn in turnover. Product markets are now largely mature and driven by replacement sales. A handful of companies generally dominates their markets and focus on design, R&D, marketing etc. while outsourcing manufacturing to contract manufacturers. Asia Pacific concentrates more than 85% of global turnover. Mexico is the only significant manufacturer outside of the region.
- Domestic appliances: small appliances (home care, personal care, cooking aids…) and large appliances (refrigerators, ovens, dishwashers, washing machines…) with an estimated USD530bn in turnover. Much like consumer electronics, product markets are largely mature and dominated by a few large global players and smaller niche, regional competitors. Asia Pacific’s share of global turnover stands at about 80%. Other manufacturing countries include Germany, Italy, Turkey and the U.S.
- Furniture and furnishings (USD520bn in turnover) is, on the contrary, a highly fragmented industry dominated by small- and medium-sized companies working closely with designers and retailers. A few mature economies, including Germany, Italy and the U.S., still have a significant presence in the industry.

Key players

Country Role Sector risk
China

#1 manufacturing country
B

Medium risk

United States

#2 manufacturing country
B

Medium risk
India

#3 manufacturing country
B

Medium risk
Germany

#4 manufacturing country
B

Medium risk
Italy

#5 manufacturing country
C

Sensitive risk

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