Although Vietnam is among the eight Southeast Asian markets that reported a slowdown in consumer demand for major domestic appliances in the 12 months from August last year, the country still had strong demand for products such as refrigerators and air-conditioners during the period, a market research firm said Thursday.
More than 20.5 billion units of air conditioners, washing machines, refrigerators, and microwave ovens were sold across eight countries in Southeast Asia during the August 2013 – July 2014 period, GfK said in a press release, citing findings from its latest report on Southeast Asia’s major domestic appliances sector.
Major domestic appliances, or MDA, are usually defined as large machines which accomplish some routine housekeeping tasks, including purposes such as cooking, washing laundry, or food preservation.
The surveyed countries include Singapore, Malaysia, Thailand, Vietnam, Indonesia, Philippines, Cambodia, and Laos.
The MDA sector thus posted nearly US$5.8 billion in revenue over the 12-month period ending July 2014, according to the Germany-based market research firm.
Consumers in the tracked countries reported a slight slowdown in consumer demand by around three percent during the August 2013 – July 2014 period, compared to the same period a year ago, the GfK report said.
“Generally, Southeast Asia’s MDA sector is still on an upward trend with countries like Vietnam and the Philippines continuing to reflect strong demand,” said Jasmine Lim, Account Director for Home & Lifestyle at GfK Asia. “The slower overall growth this year was largely attributed to the weaker performances of Thailand and Indonesia due to local factors.”
More than 7.7 million units of refrigerators valued at $2.12 billion were sold between August 2013 and July 2014, making the biggest contributing segment in the sector in terms of value and volume.
Vietnam was the second largest refrigerator market in the region, selling over 1.85 million units at nearly $534 million in total, following Indonesia, which sold more than three million units worth nearly $606 million, according to GfK.
“With the ongoing modernization of the developing economies in Southeast Asia, demand for two door freezers has been on the rapid rise such that these models have displaced the one door models to become the preferred choice,” Lim said.
Over $2 billion was spent on nearly five million air-conditioners across Southeast Asia – accounting for nearly a quarter of all major appliances sold in the region, according to GfK.
Vietnam reported strong growth of 25 percent in both volume and value, generating $480 million in total air-con sales from August 2013 to July 2014.
“It is worth highlighting the inclination of households acquiring inverter models due to the growing concern towards electricity consumption, especially in Vietnam as cost has gone up notably in recent years,” Lim said. “Our findings revealed that demand for inverter air cons have shot up at a rate double that of non-inverter models.”
The political situation in Thailand earlier this year was attributed as one of the contributing reasons for the stifled performance of its MDA market, GfK said in its report.
Meanwhile, Indonesia also turned in a lackluster performance due to fuel price and electricity tariff hikes and the political uncertainty which resulted from the recent election.
“The markets of Thailand and Vietnam are expected to pick up in the months to come as local conditions start to stabilize and consumer sentiments are anticipated improving consequently,” Lim commented.
“This will definitely help to better the overall performance of major domestic appliances in Southeast Asia, where better results are expected in the near future,” she concluded.