Sunday, April 04, 2010

Growing market of home appliances

WHO can live without electrical equipment, especially home appliances? The market this year is expected to grow 10 to 15 percent along with people’s improving purchasing power. “There is a growing demand for home appliances. But I am sure there is also tighter competition to win the market,” said the marketing director of a Korean electrical goods producer.

Data at the Electronics Marketer Club (EMC) show that the turnover of electrical and electronic products on the local market in 2009 reached Rp 20.09 trillion, an 11 percent increase from the Rp 18.1 trillion in 2008. This achievement was beyond the projected growth of only about 7 percent amid the global economic crisis.

Industry players are optimistic that in the coming years the market will grow, thus all of them will certainly be aggressive and the competition will get tighter, especially with the implementation of the ASEAN-China Free Trade Agreement.

There are various kinds of home appliances, from the simple ones to those with sophisticated technology. Today, it seems impossible for families to live without certain items like refrigerators, washing machines and gas stoves.


Many refrigerators with different brands are available. Popular products include Sharp, National and Toshiba, to name just a few Japanese brands. While those from South Korea that are gaining popularity are Samsung and LG. As for Electrolux, it is a legendary European product.

In general, the latest products of each brand have similar specifications like crystal shelves, PCM bodies, anti-rust, non-CFC (chlorofluorocarbons) so as not to damage the ozone layer, plus they save energy. A one-door refrigerator needs between 45-65 watts power, while a two-door refrigerator needs more electricity, more than 200 watts. Refrigerators with the least power is Toshiba (45 watts) followed by Sanyo (50 watts).

European refrigerators used to attract many buyers, but now Japanese and Korean products are leading. Refrigerators from the two countries are also affordable. For an LG one-door refrigerator, Express Cool, one only needs to spend Rp 1.075 million, while a standard two-door refrigerator is Rp 1.8 million. Need a bigger one? Larger two-door refrigerators are available at the higher price of Rp 6.5 million per unit.

In terms of quality, the market acknowledges that there is only a slight difference between the Japanese and South Korean products. However, for certain brands, some of the components, especially the compressors, are imported directly from the producing country. Considering that compressors are an important component of refrigerators, one product could have an advantage over another.

Sanyo is said to use locally made compressors, bodies and interior parts while Sharp, with models like Nice Crystal, according to the sellers, is said to still use compressors made in Japan, but the body and interior parts are made in Indonesia.

Regardless all of the advantages and disadvantages of each brand, it should be acknowledged that there is tight competition in the market of refrigerators. Many brands with various types and reasonable and competitive prices are on offer, making every consumer feel like a king. And now it all depends on the producers’ strategies to attract buyers.

Washing machines

Even though they might not be as alluring as other electrical goods, the washing machine market is becoming more and more promising. The market grew 15 to 20 percent. Many brands like National, Samsung, LG, Electrolux, Sharp, Sanyo, Toshiba, Sanken, Denpoo, Akira, Sanusi, Daichi and Daewoo compete against each other to win customers.

The washing machine market can be divided into three categories: twin tub (semi-automatic), automatic top loader and automatic front loader. The twin tub still dominates the market with a 72 percent market share, followed by the top loader with 21 percent and the front loader with 7 percent.

According to Sharp Electronics Indonesia (SEID) president director Fumihiro Irie, Indonesia has great market potential because only 7 percent of the population uses a washing machine. Taking into account the growing market, Sharp Indonesia will invest US $434 million (about Rp 40 billion) in its new washing machine factory. “Sharp will invest for injection machines and fully automatic machines on the condition that domestic sales increase,” he told MIX magazine.

Unlike Sharp, which focuses on twin tub washing machines, Electrolux focuses on front loaders. This year, Electrolux targets to win 50 percent of the total market for front loaders, which is expected to reach 30,000 units.

PT Electrolux Indonesia product marketing manager for fabric care Jane Ritonga said the front loader market in Indonesia was still small compared to that of the twin tub. But Electrolux, which only sells front loaders, is optimist about the market.

Gas stoves

Gas stoves were in the spotlight when the government carried out the kerosene-gas conversion program over the past three years. According to Hartono Elektronika director of sales and marketing Roy Suprapto, the impacts of the conversion program could be felt in the next few years when low-income people who received gas stoves from the government want to replace them.

In anticipation of consumer demand, Hartono Elektronika is providing various kinds of gas stoves, from one-burner stoves to three burners. Prices range from Rp 150,000 for a one-burner stove to Rp 1.5 million for a three burner. The most popular ones are those with two burners, which cost Rp 300,000 to Rp 400,000 each.

He added that sales of home appliances, especially kitchen items like magic jars, blenders and gas stoves, as well as fans were significant. “As for gas stoves, the contribution to sales is about 11 percent. Among the popular brands are Rinnai, Electrolux and Modena,” he said. (Burhanuddin Abe)

The Jakarta Post, April 04, 2010

1 comment:

  1. There is a growing demand for home appliances. But I am sure there is also tighter competition to win the market and its very nice and heplful products.