Sales of domestic appliances have been slow over the past 12 months in Southeast Asia, largely attributed to the political situation in Thailand and partly to the slowdown of Indonesia's economy, says market and consumers research company GfK.
According to GfK's survey, over 20.5 billion units of air conditioners, washing machines, refrigerators and microwave ovens were sold across eight countries in Southeast Asia in the last 12 months.
GfK's retail audit tracking of major domestic appliances (MDA) reported that Singapore, Malaysia, Thailand, Vietnam, Indonesia, the Philippines, Cambodia and Laos posted a slight slowdown in consumer demand of around 3% during the August 2013 to July 2014 period, compared with the same period a year ago.
In this region, the strongest performances were seen in Cambodia and Laos — both reporting double-digit surges in value and volume sales of 11% and 17%, and 59% and 21%, respectively, over the previous year.
"Generally, Southeast Asia's domestic appliances sector is still on an upward trend with countries such as Vietnam and the Philippines continuing to reflect strong demand," said Jasmine Lim, account director for home and 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," said Ms Lim.
The political situation in Thailand earlier this year was cited as one of the reasons for the stifled performance.
Meanwhile, Indonesia also turned in a lacklustre performance due to hikes in fuel prices and electricity tariffs and political uncertainty from the recent election.
Over 7.7 million units of refrigerators valued at US$2.12 billion were sold over the past year, making it the biggest contributing segment in the sector in terms of value and volume.
In spite of lower consumer demand, Indonesia continued to reign as the largest market, selling well over 3 million refrigerators worth nearly $606 million.
The second largest refrigerator market in the region, valued at almost $534 million, is Vietnam with a turnover of 1.85 million units.
"With the ongoing modernisation of developing economies in Southeast Asia, demand for two-door freezers has seen a rapid rise such that these models have displaced one-door models to become the preferred choice," said Ms Lim. "Today, they make up more than half of all refrigerator sales and are the most common type consumers choose to buy in almost all the countries."
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.
Vietnam reported strong growth of 25% in both volume and value, generating $480 million in total air-con sales in the past year.
"It is worth highlighting the inclination of households acquiring inverter models due to growing concerns over electricity consumption, especially in Vietnam as costs have gone up notably in recent years," said Ms Lim. "Our findings revealed that demand for inverter air-con units have shot up at a rate double that of non-inverter models."
GfK was a partner at the recent IFA 2014 trade fair held in Berlin and shared interesting global insights into trends of the MDA market, which saw the sector (excluding North America) developing positively in the first half of 2014.
Overall, sales volume in the global market for major domestic appliances (excluding North America) were up 2%. In terms of revenue, the industry even registered growth of 4%.
"The markets of Thailand and Vietnam are expected to pick up in the months to come as local conditions start to stabilise and consumer sentiment is anticipated to improve as a consequence," Ms Lim said.