The home appliance market, which saw exceptional growth due to corona in 2020 and 2021, showed negative growth due to the base effect as the corona special disappeared rampantly from 2022. In addition, as the burden of household spending and expectations of economic recession increased due to high prices triggered by the prolonged corona and the Russian-Ukrainian war, the rapid cooling of consumer confidence shrank the home appliance market, which is a durable product that is very sensitive to economy.
In particular, the market, which showed a rather modest drop of -5% in the first half of the year, fell more sharply in the second half of 2022, when the base interest rate rose sharply due to inflation and the he impact of real inflation began to pressure end consumers in all directions and recorded a growth rate of -16% in the second half of the year (compared to the second half of 2021). In addition to inflation, it is analyzed that the magnitude of the decline has increased as the year-end discount events of distribution companies have been significantly reduced due to the atmosphere of commemoration of the incident of ‘Itaewon.
By product group, all product groups (computing, major appliances, white goods and kitchen appliances) saw negative growth compared to 2021, with the exception of cameras/imaging, where the market recovered due to of the endemic. Among them, the largest drop is in major household appliances, which fell 15% compared to 2021.
Among household appliances, it is analyzed that the impact of replacement demand for large household appliances with high unit prices and long replacement cycles in advance due to retaliatory consumption during the corona period has increased the decrease. Additionally, lower home sales and moving due to the deteriorating real estate market also contributed to lower demand for major appliances.
The overall decline in the home appliance market also reduced the growth rate of online channels (open market, social commerce, general shopping mall, home teleshopping), which had been steadily growing. In 2022, the growth rate of the online channel (compared to 2021, based on sales amount) was -3%, and the growth rate of offline sales (specialized household appliance stores, superstores, department stores) recorded -16%, declining together.
However, according to the consumer tendency to move online regularly, the online channel had a relatively lower dropout rate than the offline channel. As a result, the share of online channels in the overall market increased by 3.4 percentage points compared to 2021 to reach 45.9%.
Shin Hye-mi, Researcher from GfK Distribution Service Team, said, “The home appliance market registered a significant decline in 2022 due to lower consumption due to inflation and the economic instability as well as endemic. It maintains a 5% increase in scale, and that is because there are products and brands that maintain the market by seizing new opportunities in the changing needs and consumer lifestyles post-COVID-19, despite the overall decline.
In addition, researcher Shin said, “If high inflation continues at the current level in 2023, it will be difficult to expect a market rebound, but some categories may benefit from high prices, such as kitchen appliances. and high income people. which are less affected by high prices. “I think there are still opportunities for brands to achieve results, for example by targeting consumers.”
Meanwhile, the 27 representative household appliances in Korea are ▲Large household appliances: TV, air conditioner, washing machine, dryer, refrigerator, kimchi refrigerator, washing machine, dishwasher ▲Kitchen appliances: gas stove, electric stove, microwave, espresso machine, deep fryer ▲ Appliances: air purifiers, humidifiers, dehumidifiers, stick vacuums, robot vacuums, hair dryers, hairdressers, electric shavers ▲Camera/imaging: portable digital cameras .
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