Even washing machines say something about Asian economy

Washing machines sold in Southeast Asia  posted double digit revenue growth in 1H.

According to a study by GFK Asia, Southeast Asian consumers are not only buying more of, but are also upgrading to bigger, better and more technologically-advanced major domestic appliances (MDA). According to GfK Asia’s first half year retail audit report for 2012, total sales volume of washing machines, air conditioners, refrigerators and microwave ovens registered an increment of 19 percent across the six key Southeast Asian markets tracked.

Within the first six months of the year, consumers in Singapore, Malaysia, Thailand, Indonesia, Philippines and Vietnam spent over USD 3.5 billion on 11.7 million units of these large household appliances. This reflects a double digit revenue growth of over 19 percent compared to the same period last year, contributed by robust performances in five of the six countries which managed to achieve high value growth rates in the range of 19 to 40 percent.

“Southeast Asia’s emerging markets are in the process of rapid modernization and savvy consumers here are obviously eager to make new purchases or upgrade their existing appliances to better or greener technology,” noted Ms. Jasmine Lim, Account Director for Home and Lifestyle at GfK Asia.

One of the notable trends surfacing across three countries is the flourishing washing machine trade, driven by the growth markets of Indonesia, Malaysia and Philippines. GfK findings revealed that value of the segment in these countries grew by as much as 32 percent; as seen in Indonesia—the biggest washing machine market in Southeast Asia.

Another significant development in these markets is the rising popularity of double-tub washing machines. In spite of declining demand in the other countries, the double-digit jump in sales value from these markets alone managed to contribute significantly to propel growth of the segment in the entire region.

“Although single-tub washers are more popular in some of the Southeast Asian countries, we are witnessing heightening demand for double-tub models in Indonesia, Thailand and Philippines,” highlighted Ms. Lim. “In Indonesia, double-tub washers, which averaged at USD 150 are generally the most affordable models as compared to the USD 228 single-tub type. The segment grew by 23 percent, garnering over USD122 million in the first half of the year from sales contributed by a large proportion of first time buyers.”

Yet another emerging trend is the rising adoption level of front load washing machines, as households across the region spent 20 percent more than last year to purchase 25 percent more units of such higher end models. This general uptrend is apparent across five of the six markets tracked; with the strongest two fold growth observed in the Philippines. This upgrading phenomenon is also seen in Indonesia and Malaysia which registered 66 and 34 percent increased unit sales respectively.

“Front load washers have been slowly gaining ground with consumers, thanks to the successful public awareness initiatives by local governments to educate users on saving energy and water when using appliances such as washing machines,” said Ms. Lim. “With prolonged efforts, we can anticipate to see an even wider range of eco-friendly washing machines in the marketplace and expect greater sales contribution by such appliances in the overall performance of the sector,” she concluded.